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Obama cancels again

The Indonesian government embraces Obama’s latest delay. The Chinese premiere visits in April, and the U.S. will be watching warily. A newly-elected leader of Islam vows to reduce Muslim engagement in politics. The bourse and rupiah soar. Nestle halts (and Cargill reviews) palm oil purchases due to deforestation. And a tycoon plans a Disneyland on Java.


Top News: Both the parties and the protests were ready to go when Barack Obama canceled his March 23 trip to Indonesia for the second time. The cancelation was no surprise, however. He had already delayed it several times before and the whole world knew about America’s health care debate.

The Indonesian government quickly spun the cancelation as a good thing, saying it would give them more time to iron out the details of the comprehensive partnership agreement the two countries intended to sign. It would also give President Obama a chance to spend more time in the country where he once lived and perhaps even bring his family.

He’s now supposed to come in June, but no one is holding their breath.

Several large parties, thrown by his former Jakarta classmates, distant family and Democrats living abroad went ahead as planned but were made sluggish by the din of disappointment.           

The president’s cancelation means that China’s premiere, Wen Jiabao, will be the first of the two rivals to visit Indonesia when he arrives in April. The Americans are increasingly wary of China’s growing influence in Southeast Asia and especially in Indonesia, whose economy is growing feverishly and is often now included among such powerhouses like India and Brazil.

The Nahdlatul Ulama, Indonesia’s largest and oldest Muslim organization with an estimated 40 million members, held its annual conference in March, where hundreds of ulamas (bodies of Mullahs) gathered to elect a new leader. The NU, as it is known, has been under fire in recent years for its increasingly frequent forays into politics, angering some members and threatening the country’s secular democracy.

The political arm of the NU has contested the last two national elections and numerous NU ulamas hold local government posts. But the group’s new leader, Said Aqil Siradj, has vowed to end the practice, a move that could further bolster the country’s secular credentials.

Siradj beat out a former national lawmaker from the Golkar party, Suharto’s former political vehicle. Still, some remain skeptical that the new chairman will be able to enforce such a declaration.

Indonesia’s minister for justice and human rights announced March 15 that the government would no longer allow remissions or pardons for terror offenders. The announcement came shortly after police wrapped up a nearly month-long sweep of suspected Islamic militants that led to the death of Dulmatin, one of the region’s most-wanted terrorist leaders.

The police made dozens of arrests during the raids. Several of those arrested had been released from prison early by government remissions. The one time spiritual leader of Jemaah Islamiyah, the Southeast Asian terror network, was released from prison under such a remission after serving only 30 months for conspiracy charges related to the 2002 Bali bombings.

Money: Indonesia’s stocks continue to bound and soar. Jakarta’s main stock index reached a two-year high on March 17 after the U.S. Federal Reserve said they would keep interest rates low, encouraging foreign investors seeking risky assets. The Rupiah too reached an impressive benchmark on March 17. The country’s currency leapt to an almost 20-month high, trading at just over 9,000 per dollar. The Rupiah’s rise is spooking exporters who fear their products will become too expensive for their overseas buyers.

Finance Minister Sri Mulyani, however, played down such fears, saying the current value of the Rupiah remains within safe limits. Economists say the country’s exports will be safe as long as the Rupiah stays between 9,000 and 9,500 to the dollar.

One of Indonesia’s largest palm oil suppliers is under attack by environmental groups – leading several major international corporations to cancel their contracts with the company. Palm oil is used in cooking and cosmetics and, lately, as an increasingly popular biodiesel.

Environmentalists criticize Indonesia, one of the world’s largest producers of palm oil, for cutting down massive swaths of forest and jungle to make way for palm plantations. In a report last December, Greenpeace accused Sinar Mas of cutting down protected forests. Now Cargill, the world’s largest trader of agricultural commodities, has said it would reconsider its relationship with Sinar Mas.

Greenpeace also targeted Nestle for buying from Sinar Mas, leading that company to switch suppliers. Unliever, the world’s largest buyer of palm oil, scrapped a $33 million contract with Sinar Mas shortly after the report was issued.

Elsewhere: Disney may come to Java. Bakrieland — Indonesia’s first and largest super-block developer — said it planned to build a Disneyland theme park in Sukabumi, a rural haven for outdoor enthusiasts that is several hours outside the capital Jakarta.

Officials at Bakrieland, which is controlled by Aburizal Bakrie, chairman of the Golkar Party and former minister for people’s welfare, did not elaborate on the plans, but did say that the park would be situated along the 54-kilometer toll road the company is building in the area.

Bakrie is one of the country’s richest men and is currently being investigated for tax evasion.