QUESTIONING FOREIGN INVESTMENT AND CAPITALISM
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We do not have capital to develop our country and therefore, we use foreign capital for our interest. We are against capitalism but not against capital. We are not reluctant to hire foreign manpower either, because we lack of experts.

That is a piece of statement of Proclaimer, Mohammad Hatta, in Sono Suko Hall, Solo, in 1951, as quoted in the opening statement of the Government which was read by Minister of Trade of the Republic of Indonesia, Marie Elka Pangestu, in the Constitutional Court Hearing for case Number 21-22/PUU-V/2007 concerning the judicial review of Law Number 25 Year 2007 concerning Capital Investment against the 1945 Constitution, Tuesday (11/6).

The Government, on whose side the Minister of Law and Human Rights Affairs, Andi Mattalata, was also present, continued with the statement that capital investment would encourage economic growth because in turn, it could provide job opportunities for the unemployed in Indonesia which has now reached the number of around 10 million people. “This effort is to implement Article 27 Paragraph (2) of the 1945 Constitution,” Marie said.

In harmony with the Government, the People’s Legislative Assembly which was represented by its Attorney-In-Fact, Mahfud MD, stated that the Petitioners had not clearly argued and set out the constitutional rights of the Petitioners claimed to have been impaired with the coming into effect of the Capital Investment Law. “The Petitioners only argued about their excessive concern regarding this Law,” said this politician of the National Awakening Party.

Mahfud continued that the state also had shortcomings in managing the economy. Therefore, state, through its authorities, gives opportunities for both domestic and foreign investors to make investment. “However, the state is still responsible for regulation matters. The responsibility of State as mandated in Article 33 of the 1945 Constitution must not vanish,” Mahfud added.

Previously, the Petitioners in their reason of petition, stated that the Capital Investment Law had provided various luxuries for the sake of inviting investment started from various types of tax facilities, licenses of Right of Cultivation for 95 years at once, a freedom to transfer the capital any time and anywhere, up to the freedom from nationalization problems. Meanwhile, so far, the external costs of capital investment such as, among others, thousands of land conflicts, Human Rights violations, environment destruction, and impoverishment have been occurring, while none of them have been made as reference for the formulation of the Capital Investment law by the Government and the People’s Legislative

Assembly of the Republic of Indonesia.

The Capital Investment Law, the Petitioners continued, contained a lot of weaknesses because, on the one hand, it ignored the just income distribution principle so that it widened the gap between the poor and the rich. On the other hand, the great majority of Indonesian people are still poor and unable to have access to natural resources, health, education, and other public services. “It is these matters that, from the Petitioners’ point of view, have violated the Constitution and betrayed the goals of the national economic development based on democratic values and the Pancasila-based economy,” The Petitioners’ Attorney said.

Accordingly, in their statement of claims (petitum), the Petitioners of case Number 21/PUU-V/2007 requested the Panel of Constitutional Court Justices to declare that the substance of Article 3 Paragraph (1) Sub-Paragraph d, Article 4 Paragraph (2) sub-paragraph a, Article 8 Paragraph (1), Article 12 Paragraph (4), and Article 22 Paragraph (1) sub-paragraphs a, b, and c is contradictory to the 1945 Constitution. In the mean time, the Petitioners of case Number 22/PUU-V/2007 requested the Panel of Constitutional Court Justices to state that Article 1 Paragraph (1), Article 4 Paragraph (2) sub-paragraph a, Article 8 Paragraph (1) and (3), Article 12 Paragraphs (1) and (3), Article 21, Article 22 Paragraphs (1) and (2) of the Capital Investment Law are contradictory to the 1945 Constitution.

Meanwhile, in his statement, the expert of Petitioners, Ahmad Sodiki, gave an example that whenever there were conflicts on land, commonly, investors would win because they had all capabilities to afford defenses. Sodiki went on to state that if land conflicts arose, these would confuse the apparatus up to lower level such as the National Land Agency which had to deal with the people. In the historical records of the new order, Sodiki stated that, every land acquisition undoubtedly would bring about conflicts. “Moreover, the Law which gives facilities to the investors to obtain rights on land for 95 years will lead to imbalance. Thus, basically, According to John Rawls, in this context, state policies have to side with those who are less advantaged,” he stated.

In line with Sodiki’s statement, the expert of the Petitioners, Revrisond Baswir, stated that this nation had been born from the colonial background. Colonialism has marked the economic structure with a colonial characteristic. Quoting the Proclaimer, Bung Karno, Revrisond tried to give solutions by saying that if there was no economic democracy beside political democracy, Indonesia would not be free.

Meanwhile, the expert of the Petitioners in the sector of investment, Salamudin Daeng, stated that the Indonesia economy preferred having external orientation to putting some efforts to fix internal problems. In fact, Daeng assumed that countries that colonized Indonesia had treated the nation as a source of living. Therefore, Daeng asked the Government to learn from the past at that moment. The expert also presented evidence in the sector of manpower that actually the biggest contributor for services income or labor wages so far had been from agricultural sector namely 47.8%. While the mining sector only contributed 5.6%, gas and electricity sector contributed 21.67%, and finance and services contributed 7.15%. “Based on the data, it is evident that foreign capital investors do not guarantee the improvement of people’s welfare, “Daeng said.

The expert of the Petitioners in the sector of economic policies, Ichsanuddin Noorsy, also added that he was questioning why the Government’s way of thinking in the economic sector referred to its weakness, namely the issue of lack of investment, instead of its strengths such as natural resources, human resources, and geo-economic position or location.

Therefore, Noorsy continued, the Government should have thought more about the protection for the people and national’s assets. “If a country positions itself as a night guard, it means that the country will be no more than a messenger of investors,” Noorsy stated.

Responding to the experts’ statements, Assistant to the Minister of Law and Legislation, Erman Rajagukguk, reiterated and reaffirmed Bung Hatta’s saying as previously quoted that Article 33 of 1945 Constitution did not close the opportunity for private parties, both national and international, to participate and develop the national economy.

Debating the statement above, Revrisond stated that it was understandable if Bung Hatta said so because at that time Indonesia still lacked Human Resources, knowledge, and capital to make people prosperous. “Nevertheless, now Indonesia is supposed to have been able to catch up with all of such shortcomings so that it is no longer necessary to depend on foreign investors,” he said. (Wiwik Budi Wasito)


Tuesday, November 06, 2007 | 19:56 WIB 164