Abstract

Over the past two decades, Indonesia's coal industry has transformed itself from being an unknown, minor player in Asia's coal markets to the world's largest exporter of steam coal. In what is likely the most detailed analysis of the Indonesian coal industry ever released, Dr. Bart Lucarelli tells the story of how Indonesia created this world-scale industry over two decades despite challenges created by widespread government corruption, a weak legal system, the Asian Financial Crisis of 1997, and the fall of the Soeharto government in 1998.

The paper argues that key physical and technical factors, along with regulatory and political factors, have acted as the primary drivers of the industry's phenomenal growth over the past two decades and will be the most important factors for consideration over the next two decades.  It also discusses current estimates of Indonesia's coal resources and reserves, the role played by location and geological factors in the development of its coal resources, the future impacts of the passage of Indonesia's Mining Law of 2009 and its related implementing regulations, and how these issues might affect the coal industry's structure and performance before 2020.

The Southeast Asia Forum experienced an embarrassment of riches in 2009-2010.  In no previous academic year had the Forum enjoyed the intellectual company of so many first-rate scholars working on Southeast Asia at Stanford.  They were six in all—Marshall Clark (Australia), James Hoesterey (US), Juliet Pietsch (Australia), Thitinan Pongsudhirak (Thailand), Sudarno Sumarto (Indonesia), and Christian von Luebke (Germany)—three for the full academic year and three for two months apiece.  All six visitors shared their findings and thoughts on Southeast Asia in talks hosted by SEAF.  Not least among the pleasures of having them at Stanford was a Spring 2010 seminar in which they read each other’s work in progress and shared ideas as to how it might be improved.  These conversations gave specific, heuristic, and collegial meaning to the abstract notion of “a community of scholars.”

Here are brief updates on all six as of the end of June 2010:  

Marshall Clark

A lecturer in Indonesian studies at Deakin University in Australia, Dr. Clark came to Stanford on sabbatical to spend two months at Stanford in Spring 2010 writing up and sharing his research findings with US-based colleagues.  Publications associated with his stay at APARC include two books, Maskulinitas:  Culture, Gender and Politics in Indonesia (Monash University Press, 2010) and Indonesia-Malaysia Relations:  Media Politics and Regionalism (co-authored with Juliet Pietsch and forthcoming in 2011), and two articles, “The Ramayana in Southeast Asia: Fostering Regionalism or the State?” in Ramayana in Focus, and (with Dr. Pietsch) “Generational Change:  Regional Security and Australian Engagement with Asia,” The Pacific Review  During his time with SEAF he presented papers at venues including the Association for Asian Studies convention in Philadelphia in March 2010.  In April at the University of California-Berkeley at the Islam Today Film Festival he moderated a discussion of the ins and outs of making movies in Indonesia and Malaysia. (2010).

He returns to his position on the faculty of Deakin University.

James Hoesterey

Dr. Hoesterey was awarded the Walter H. Shorenstein Fellowship to spend the academic year at APARC working on several projects, including revising his University of Wisconsin-Madison doctoral dissertation into a book.  Based on anthropological research in Indonesia on media-savvy Muslim preachers, Sufi Gurus and Celebrity Scandal:  Islamic Piety on the Public Stage should be under review in 2010 for possible publication in 2011.  Also in the pipeline are an essay, “Shaming the State: Pop Preachers and the Politics of Pornography in Indonesia,” to appear in a volume he is co-editing with political scientist Michael Buehler, and chapters in Muslim Cosmopolitanisms and Digital Subjectivities:  Anthropology in the Age of Mass Media.  During his fellowship he spoke to audiences at several US universities.  In March 2010 he was elected incoming chair of the Indonesian and East-Timor Studies Committee of the Association for Asian Studies.

In Fall 2010 the BBC-Discovery Channel series “Human Planet” will feature Dr. Hoesterey’s work as a cultural consultant with documentary-film makers in West Papua.  He will spend AY 2010-11 in Illinois as the Andrew W. Mellon Postdoctoral Fellow in Islamic Studies at Lake Forest College.  

Juliet Pietsch

Dr. Pietsch is a senior lecturer in the School of Politics and International Relations at the Australian National University.  During her two-month sabbatical at Stanford in Spring 2010 she worked on two books:  Indonesia-Malaysia Relations: Media, Politics and Regionalism (with Dr. Clark) and (with two other co-authors) Dimensions of Australian Society (3rd ed., Palgrave Macmillan, 2010).  In April, jointly with Dr. Clark, she spoke at the Berkeley APEC Study Center on “Indonesia-Malaysia Relations and Southeast Asian Regional Identity.”

Dr. Pietsch returns to her faculty position at the Australian National University.

Thitinan Pongsudhirak

Dr. Pongsudhirak is an associate professor in the Department of International Relations in the Faculty of Political Science at Chulalongkorn University, whose Institute of Security and International Studies he also heads.  He was selected to spend a month at Stanford in Spring 2010 as an FSI-Humanities Center international scholar, and was supported for a second month by FSI’s Center on Democracy, Development, and the Rule of Law.  During his time on campus he focused on the turbulent politics of Thailand—in an article drafted for the Journal of Democracy, in a number of shorter pieces, in lectures at various venues, and in interviews with media around the world.  (For a filmed interview on 4 June 2010, see http://absolutelybangkok.com/thitinan-on-continuity-change/.)

Dr. Pongsudhirak will briefly rejoin some of his Stanford colleagues at a conference on Asian regionalism to be hosted by APARC in Kyoto in September 2010.  Meanwhile he continues his scholarship and teaching at Chulalongkorn.

Sudarno Sumarto

An Indonesian economist specializing on poverty reduction, Dr. Sumarto spent AY 2009-2010 at APARC as an Asia Foundation fellow writing up research, lecturing on and off campus, and advising Indonesian officials on anti-poverty policy.  Notable among the publications resulting from his residence at Stanford is a book, Poverty and Social Protection in Indonesia (Singapore / Jakarta:  ISEAS / Smeru Institute, May 2010), which he co-edited and most of whose chapters he co-wrote.  Noteworthy, too, is a co-authored essay, “Targeting Social Protection Programs:  The Experience of Indonesia,” in Deficits and Trajectories: Rethinking Social Protection as Development Policy in the Asia Region (forthcoming, 2010).  Indonesia-related subjects of writing in progress include lessons from the cash transfer program, how such transfers have affected political participation, and the impacts of violent conflict on economic growth.  During his stay at Stanford, Dr. Sumarto was chosen to co-convene the September 2010 Indonesia Update conference in Canberra on “Employment, Living Standards, and Poverty in Contemporary Indonesia” and to co-edit the resulting book. 

Dr. Sumarto returns to Jakarta to become a senior research fellow at the Smeru Institute, which he co-founded and directed, and to continue his work on poverty alleviation in Indonesia.

Christian von Luebke

Former Shorenstein fellow Dr. von Luebke completed the first year of a two-year German Research Foundation fellowship at Stanford writing a book on democracy and governance in Southeast Asia.  Before the end of 2010, Gauging Governance:  The Mesopolitics of Democratic Change in Indonesia should be in the pipeline toward publication.  Other relevant work includes “Politics of Reform:  Political Scandals, Elite Resistance, and Presidential Leadership in Indonesia,” Journal of Current Southeast Asian Affairs (2010), and a co-authored piece on current economics and politics in the Bulletin of Indonesian Economic Studies (2010).  Pending revision and resubmission is an article on the political economy of investment climates in Indonesia.  In the course of the year he spoke on his research before audiences in North America, Europe, and Southeast Asia, and co-organized a panel on Southeast Asian politics to be held at the annual conference of Oxford Analytica in the UK in September 2010.

Dr. von Luebke’s plans for AY 2010-11 at Stanford include research and writing on Indonesia and the Philippines and teaching a course on Southeast Asian politics

The Center for Strategic and International Studies (CSIS) hosted a live debate May 25 between Scott Sagan and Keith Payne, CEO and president of the National Institute for Public Policy. CSIS is a bipartisan, nonprofit organization in Washington, D.C.

Scott Sagan's Introductory Statement

I have been asked to address the question: "What should be U.S. declaratory strategic deterrence policy?"

I continue to believe, as I wrote in my 2009 Survival article, that,

"The United States should, after appropriate consultation with allies, move toward a No-First Use declaratory policy by stating that the role of U.S. nuclear weapons is to deter nuclear weapons use by other nuclear weapons states against the United States, our allies, and our armed forces and to be able to respond, with an appropriate range of nuclear retaliation options if necessary in the event that deterrence fails."

I believe that slow but steady movement toward a No-First Use (NFU) doctrine is in the U.S. interest because I think U.S. declaratory policy should have three characteristics.

U.S. declaratory policy should:

a) address the full range of nuclear threats to U.S. national security objectives (not just basic deterrence);

b) be accurate and consistent, reflecting actual military doctrine rather than being mere rhetoric; and

c) U.S. declaratory policy should reflect what U.S. leaders really might want do in the event of a deterrence failure.

In my brief opening remarks, I will explain these three points and outline the logic and evidence that leads me to the conclusion that the benefits of an NFU declaratory policy outweigh its costs.

Point #1: Deterrence is one, but only one critical U.S. national security objective and prudent decisions about declaratory policy regarding the use of nuclear weapons should take into account its likely effects on deterrence of adversaries, bit also the reassurance of allies, the further proliferation of nuclear weapons to additional states, the risks of nuclear terrorism, the impact of our declaratory policy on nuclear doctrines of other states; and the prospects for long-term nuclear disarmament. In this sense, the CSIS question (like previous Nuclear Posture Reviews (NPR) before this latest one) is too narrow in scope and could therefore lead to an excessively narrow, indeed a wrong-headed, answer. Historically, many actions and statements made in the name of deterrence - think of Richard Nixon's Madman Nuclear Alert over Vietnam or George W. Bush's suggestion that "All Options are on the Table" included nuclear preventive strikes on Iran -- might add just a smidgen of deterrence, but can be highly counterproductive with respect to other U.S. nuclear security goals. This is true of the NPR in general: just as war is too important to be left to the generals, nuclear declaratory policy is too important to be left solely to the Pentagon.

Opponents of this broader conception of nuclear posture claim that there is no evidence that U.S. nuclear posture influences others or perceptions that we are honoring our NPT Article VI commitments help with non-proliferation goals. That view is wrong. Let me give just two examples:

1. Evidence to support the point about U.S. disarmament steps helping encourage others to act is seen with Indonesia's decision to ratify CTBT earlier this month:

When Indonesia announced its decision it said it had taken note of the "serious effort" on the part of the current United States Administration in promote disarmament. "We do feel that at this time, what is needed is positive encouragement rather than pressure of a different type that we've been trying to impart in the past," he said, voicing hope that the U.S. will follow suit from his country's actions. "We are also cognizant of some positive aspects of the United States' Nuclear Posture Review."

2. For evidence on the doctrinal influence or mimicry point let me cite India. In January 2003, the BJP government in New Delhi, influenced by the U.S. NPR, adopted a revised, more offensive nuclear doctrine including the explicit threat of Indian nuclear first-use in response to biological or chemical weapons use. "India must consider withdrawing from this [NFU] commitment as the other nuclear weapons-states have not accepted this policy." Although it is too early to know the final result, the Indian government today appears to be reversing course: A group of very senior former officials has stated that, "It is time to review the objectionable parts" of India's nuclear posture and the Foreign Minister has called for universal declarations of NFU.

Point #2: U.S. Strategic Nuclear Declaratory Policy should be consistent with actual U.S. Nuclear Doctrine. That is, U.S. government officials should not misrepresent what its "real" nuclear policy is when it makes public statements about intent and plans. This may seem like an obvious point to some... but history suggests that this principle is not always followed--from Robert McNamara's mid-1960s declaratory statements about Assured Destruction (which often downplayed the heavy Counter-Force emphasis of U.S. doctrine at the time) to the Bush Administration's February 2002 statement in which in the same speech it "reaffirmed" the 1995 Negative Security Assurances not to use nuclear weapons against NNWS parties to the NPT unless they attack the U.S. or our allies with a NWS and, in the same speech, also stated that, "If a weapon of mass destruction is used against the United States or its allies, we will not rule out any specific type of military response. This followed the leaking of the classified portion of the 2001 NPR which reportedly placed Iran, Libya, and Syria on target lists, creating a flurry of negative international press reports.

In an era in which leaks should be considered highly likely, if not inevitable and, at a time in which we want more transparency around the world, the U.S. Government should err on the side of transparency. With multiple audiences present, calculated ambiguity may sometimes be necessary and even helpful; clear contradictions and calculated hypocrisy are not.

Here, I must give the current Administration some credit, for it judged that there was a small set of specific threats that could not currently be met by U.S. and allied conventional forces. It said so clearly in the Nuclear Posture Review and also clearly committed itself to deal with the challenge:

"The United States will continue to strengthen conventional capabilities and reduce the role of nuclear weapons in deterring non-nuclear attacks, with the objective of making deterrence of nuclear attack on the United States or our allies and partners the sole purpose of U.S. nuclear weapons." (p. ix)

Critics say that this will weaken extended deterrence as key allies will feel abandoned. Evidence so far is to the contrary:

  Japan: Foreign Minister Okada said, in October 2009, "We cannot deny the fact that we are moving in the direction of No-First Use of nuclear weapons. We would like to discuss the issue with Washington." The Japanese 2010 Rev Con statement said, "Japan appreciates and welcomes the Nuclear Posture Review by the United States." "We call on all states possessing nuclear weapons to reduce the role of nuclear weapons in their national security strategies. In this connection, we call on the Nuclear Weapon States to take, as soon as possible, such measures as providing stronger negative security assurances that they will not use nuclear weapons against Non-Nuclear-Weapon States that comply with the NPT." Japanese 2010 NPT Review Conference statement

  This is also the case in NATO: The German, Dutch, Belgian and Norwegian governments have all called for removal of the tactical nuclear weapons on their soil. NATO meetings will address this soon. We should not just assume that the credibility of extended deterrence and reassurance to allies is threatened by NFU declarations or removal of tactical weapons. Instead, we should listen to what our allies are saying and work with them.

Point #3: U.S. declaratory policy should reflect what the U.S. might really want to do if deterrence fails. Doctrine and declaratory policy should be made with an acute awareness that deterrence might fail and not succumb to the common wishful thinking biases that assumes perfect prospects of success. This leads me to appreciate the wise advice that Brent Scowcroft gave to President George H.W. Bush during the first Gulf War to avoid "spoken or unspoken threats to use them (Nuclear Weapons) on the grounds that it is bad practice to threaten something that you have no intention of carrying out."

When an official threatens actions that we have no intention of carrying out it can add a thin sliver of deterrence strength but at the grave cost, if the action occurs anyway, of either cheapening the currency of deterrence or risking the creation of a commitment trap that leads the state to execute an option that it otherwise would deem ill-advised. Here, I think of General Chilton's recent remarks about using nuclear threats to deter cyber attacks, as an example.

Here, I should note that in order to enhance non-proliferation and move slowly in the direction of a nuclear-free world the current NPR adds new NSAs and threatens conventional attacks only against NNWS in compliance with the NPT: "The United States will not use or threaten to use nuclear weapons against non-nuclear weapons states that are party to the NPT and in compliance with their nuclear non-proliferation obligations" (p.viii) and promises that its conventional responses would be "devastating" and that, "any individuals responsible for the attack, whether national leaders or military commanders , would be held fully accountable."

Dr. Payne, in his 2009 article, was critical of the whole goal of nuclear disarmament, despite the U.S. Article VI commitment to work in good faith toward that objective. He has written that, "The continuing threat posed by chemical and biological weapons is a fatal flaw in the logic of the nuclear-disarmament narrative, one that is all but ignored by its proponents.

"In fact, even if all enemies and potential enemies of the United States miraculously gave up their nuclear weapons, the United States would still need to maintain a nuclear deterrent arsenal. Why? Because some enemies reportedly retain other types of weapons of mass destruction (WMD), such as chemical and biological weapons, that could inflict enormous civilian casualties...If we also take nuclear deterrence off the table, we may, as Gen. Paul Fouilland, commander of the French Strategic Air Forces, has observed, 'Give a green light' to chemical and biological threats," Dr. Payne states.

I fail to see how a promise of "devastating" conventional responses and a promise that, "Any individuals responsible for the attack, would be held fully accountable" is giving any kind of green light to an adversary contemplating a chem/bio attack.

Furthermore, the only historical evidence that Dr. Payne cites to demonstrate his belief that, "Nuclear weapons threats have unique deterrent qualities" is the alleged success in deterring Iraqi use of Chem/Bio during the 1991 Gulf War:

The preponderance of evidence suggests that this is not right: Saddam did not use his WMD in 1991 because we threatened to march on Baghdad and overthrow his regime if he did that and "promised" to do that if he refrained from using his WMD.

First, look at the Bush, 25 January, 1991, letter to Saddam:

"Should war come it will be a far greater tragedy for you and your country. Let me state too that the United States will not tolerate the use of chemical or biological weapons or the destruction of Kuwait's oil fields and installations. Further, you will be held directly responsible for terrorist actions against any member of the coalition. The American people would demand the strongest possible response. You and your country will pay a terrible price if you order unconscionable acts of this sort." Two of the three things that Bush warned about happened...hardly good evidence that vague threats or calculated ambiguity worked as a deterrent.

Second, look at James Baker's memoirs in which he claimed that he "purposely left the impression that the use of chemical or biological agents by Iraq could invite tactical nuclear retaliation," but also warned Aziz that if Iraq used weapons of mass destruction, "Our objective won't just be the liberation of Kuwait, but the elimination of the current Iraqi regime." Advocates of maintaining calculated ambiguity too often cite the first statement but fail to cite the second Baker statement.

Third, look at what Saddam said under interrogation: "How would Iraq have been described if it had used nuclear weapons? A: "We would have been called stupid." In the May 2004 interrogation: "The WMD was for the defense of Iraq's sovereignty. Iraq demonstrated this with the use of WMD during the Iraq and Iran War, as Iran had threatened the sovereignty of Iraq. Yet, Iraq did not use WMD during the 1991 Gulf War as its sovereignty was not threatened."

In conclusion: I think you will discover today that reasonable people can certainly disagree about how to value and prioritize these different nuclear-related objectives and reasonable people can (and do) disagree about how best to pursue them. But reasonable people should not ignore the full range of U.S. objectives and narrowly conflate deterrence with security, should continue to search for evidence that supports or weakens their assumptions, and should engage in rigorous dialogues like this to help propel the debate forward.

The Obama administration's decision to preview its National Security Strategy at West Point highlighted its coverage of security crises from Afghanistan to North Korea. But back-to-back events at Brookings with Hillary Clinton and Samantha Power today showed that the core of the strategy is a deeper argument about the central challenge confronting America -- the increased impact on our economy and security of a new global reality.

For two decades, the United States could take economic and security supremacy for granted. Three things have changed.

First, the global economic boom. Yes, boom -- remember? Before the crash, there were two decades of uninterrupted growth in the global economy, global trade, and global financial activity. The U.S. profited, but so too did China, India and Brazil, which grew into major economic players; so did several others, like Mexico, Indonesia and Turkey, which have emerged as the new middle powers.

Second, the Iraq war. Love or loath U.S. policy in Iraq, it launched us into sustained expenditure of financial and military resources alongside another draining war in Afghanistan. In the minds of the Vulcans, decisive U.S. victory in Iraq was to assert global order by force of -- well, force. The strategy backfired, and rising states from Ankara to Brasilia found few, if any, costs to opposing U.S. strategy in the Middle East -- and domestic political points to be won. The Obama administration is feeling the consequences in its Iran policy.

Third, the global financial crisis. The bust, when it came, reaffirmed the centrality of the U.S. in the short term. But it also showcased the growing weight of the emerging economies, which now lead the global recovery. Before Lehman Brothers collapsed, other big players may have disliked our Middle East policy, but they banked -- figuratively and literally -- on our stewardship of the global financial system. Since then, doubts have crept in, and a new assertiveness to match.

The net result is rising global influence and solidifying regional power for China, India, and Brazil -- and less room for maneuver for the US.

The administration will be criticized in predictable terms from predictable quarters for acknowledging any of this, even in tacit terms: for 'giving ground' to the emerging powers, for 'ceding' American supremacy, for forgetting to carry a big stick while talking softly. But that dog won't hunt. The Bush administration had begun to adapt to these changed realities towards the end of its tenure, and the Obama administration deserves credit for putting the new global realities front and center in its assessment of U.S. national strategy. The core concepts of revitalizing international order, pressing others to take up their responsibilities and working within, not against, multilateral arrangements are the right ones.

The tougher question is, will it work? Skeptics will point to Chinese heel-dragging and Brazilian gallivanting on Iran to say no. Optimists will point to Chinese cooperation on the financial crisis, and everybody's cooperation on Somali piracy and counter-terrorism, to say yes.

The reality is, we don't know. There's a struggle in Beijing between betting on cooperation with the US, and those who seek sharper competition. A pro-U.S. strategy in India has the high ground for now, but divisions remain. The better angels in Brazil's foreign ministry can't quite hold back Lula's dalliance with global populism -- an October election there may tilt the balance.

But we know this much: if the U.S. doesn't try, no one will succeed. None of the emerging powers can underwrite stability, and none that are serious want the job. The emerging powers may not play ball, and if so, we'll be in a lose-lose global game. But only U.S. strategy can pull us into win-win, and the Administration is right to try. Making this point to the American people won't be popular; but reality is reality, and denial does not a strategy make.