Posted Tuesday, September 28, 1999

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On September 23, 1999 The Wisdom Fund published this revealing analysis of reasons why the United States has taken an interest in an island of the Indonesian Republic, and insisted it become "independent".

World's Largest Single Gold Deposit Near East Timor

Greed at Core of Indonesia's Timor Problem

by Enver Masud

WASHINGTON, D.C. -- At its core the problem of East Timor, and indeed much of Indonesia, has a lot to do with greed rather than the Muslim-Christian divide portrayed in the media.

From ancient times until the 7th century AD Indonesia was ruled by various Hindu kingdoms among which the Majapahit Empire became the most powerful. Sumatra was then known as the "island of gold", and Java as the "rice island."

Muslim traders began arriving in the 13th century, and Islam spread peacefully through the islands. The descendants of the Hindu kingdoms retreated to the islands of Bali and Lombok where they flourish to this day.

With the fall of Muslim Spain in 1492 (as in the Americas, Africa, and South Asia), came 350 years of brutal colonial rule and exploitation. First to arrive were the Portuguese in 1511 AD. The Portuguese were followed by the Dutch (1602 to 1799 AD), the British (1811 to 1815 AD), and again the Dutch (1816 to 1908 AD).

The colonial masters took slaves, forced the natives to grow crops for export which resulted in famines, and destroyed the thriving inter-island trade.

By 1908 nationalist movements began seeking self-government, and Indonesia declared independence on August 17, 1947. Sukarno, a leader of the independence movement, became president. He was overthrown in 1965 by Suharto in a U.S. backed military coup in which it is reported that one million people, mainly Chinese, were killed.

When the Dutch and Portuguese formally partitioned East Timor between them in the 19th century, East Timor remained a part of the Portuguese colony. The governor of Portuguese Timor, in 1974, granted permission for political parties, and five emerged.

Said to be lacking popular support Fretilin, the party seeking independence, resorted to terror, civil war broke out, and on August 27, 1975 the governor and Portuguese officials abandoned the capital Dili. The U.S. armed, trained Indonesian military entered East Timor to stop a civil war.

Fretilin, supplied with arms from the Portuguese army arsenal, declared East Timor independent. The four other parties in East Timor declared their independence and integration with Indonesia. East Timor became the 27th province of Indonesia, but this claim was not recognized by the UN.

Rich in natural resources, Indonesia's primary problem is the equitable sharing of these resources. Foreign interests, and internal corruption, add to the inherent difficulty that while Java is Indonesia's most heavily populated island, many of the resources are located in less populated islands.

According to former U.S. Ambassador to Indonesia, Edward Masters, Indonesia did more in 35 years to develop barren, infertile East Timor than Portugal did in four centuries.

Indonesia allocated development funds to East Timor at a rate six times the national average. In 1975, less than 10% of Timorese were literate, there were only 50 schools, and no colleges. By 1994 East Timor had 600 elementary schools, 90 middle schools and three colleges. Under the Portuguese East Timor had only two hospitals and 14 health clinics. By 1994 there were 10 hospitals and nearly 200 village health centers. In 1975 it had 20 km hard surfaced roads, by 1994 there were 500 km. The number of Catholic Churches in predominantly Catholic East Timor quadrupled under Indonesian rule

But Fretilin continued to resist Indonesian rule, and offshore oil discoveries made matters worse.

A treaty was signed in 1989 by Australia and Indonesia. This Timor Gap Treaty came into force in 1991 and is due for review in 2031. Australia desperately needs this oil, and massive revenues are said to flow to both governments. Independence for East Timor would likely give it a larger share of these revenues.

The division of natural resources is also at the core of secessionist movements in Aceh, Irian Jaya, and in the neighboring Philippines.

On Aceh in 1971 Mobil Oil discovered one of the world's richest onshore reserves of natural gas, estimated at 40 billion cubic metres. Aceh provides an estimated 11% of Indonesia's total exports, but less than 10% of this wealth is reinvested in the province. Mobil Oil, is reported to have caused massive environmental damage, and is said to be linked to the Indonesian military's land seizures, bombings, and massacres.

On Irian Jaya military repression, and massive environmental damage has been linked to Freeport McMoRan, a Louisiana corporation.

In April 1967 Freeport McMoRan became the first foreign company granted an operating permit following the 1965-66 U.S.-backed coup that installed General Suharto. Former U.S. Secretary of State Henry Kissinger is credited with having introduced company officials to President Suharto. It is reported that Mr. Kissinger sits on Freeport's board, earning $500,000 a year, and Freeport also retains his law firm, Kissinger and Associates, for a reputed $200,000 a year.

In 1999 Freeport McMoRan received approval to almost double production, which will increase land seizures and environmental damage.

With reserves valued at $40 billion, the Freeport project is the largest single gold deposit in the world and the third largest open-cut copper mine.

In the neighboring Philippines, National Steel Company, writes Fred Hill, author of Teasing the Tiger: A Third World Study of Muslim Mindanao, the Philippines' largest steel mill, is destroying Lake Lanao, the river's source. Located in the Muslim countryside, it is the major employer in the area. But except for 5 or 10 Muslims its 4000 employees are Christian Visayans, many of whom were brought there in the 1970s. The media publish reports about "Muslim" violence in Mindanao, but not the reasons for their frustration.

And similarly in East Timor the violence has little if anything to do with Muslim-Christian enmity. Christians live in peace with Muslims in West Timor, and elsewhere in Indonesia. Greed, the greed of corporations, government officials, individuals is at at the core of problems. The religion card is used to divide, rule, and expolit the people and the land -- just like colonial rulers did in earlier times.

[Enver Masud visited Indonesia in the early 1950's when his father was the UNESCO Mission Chief, and several times in the mid-1990's as an engineering management consultant for The World Bank. He is founder of The Wisdom Fund.]
Copyright 1999 The Wisdom Fund
The Wisdom Fund, P. O. Box 2723, Arlington, VA 22202 Website: Press Contact: Enver Masud From: 99/0922-Greed.html

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