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The Republic of Indonesia (pronounced /ˌɪndoʊˈniːziə/, /ˌɪndəˈniːʒə/) (Indonesian: Republik Indonesia), is a country in Southeast Asia. Comprising 17,508 islands, it is the world’s largestarchipelagic state. With a population of 222 million people in 2006, it is the world’s fourthmost populous country and the most populous Muslim-majority nation; however, no reference is made to Islam in the Indonesian constitution. Indonesia is a republic, with an elected legislature and president. The nation’s capital city is Jakarta. The country shares land borders with Papua New Guinea, East Timor and Malaysia. Other neighboring countries includeSingapore, the Philippines, Australia, and the Indian territory of the Andaman and Nicobar Islands.

The Indonesian archipelago has been an important trade region since at least the seventh century, when the Srivijaya Kingdom traded with China and India. Local rulers gradually adopted Indian cultural, religious and political models from the early centuries CE, and Hinduand Buddhist kingdoms flourished. Indonesian history has been influenced by foreign powers drawn to its natural resources. Muslim traders brought Islam, and European powers fought one another to monopolize trade in the Spice Islands of Maluku during the Age of Discovery. Following three and a half centuries of Dutch colonialism, Indonesia secured its independenceafter World War II. Indonesia’s history has since been turbulent, with challenges posed by natural disasters, corruption, separatism, a democratization process, and periods of rapid economic change.

Across its many islands, Indonesia consists of distinct ethnic, linguistic, and religious groups. The Javanese are the largest and most politically dominant ethnic group. As a unitary state and a nation, Indonesia has developed a shared identity defined by a national language, ethnic diversity, religious pluralism within a majority Muslim population, and a history of colonialism and rebellion against it. Indonesia’s national motto, “Bhinneka tunggal ika“ (“Unity in Diversity” literally, ”many, yet one”), articulates the diversity that shapes the country. However, sectarian tensions and separatism have led to violent confrontations that have undermined political and economic stability. Despite its large population and densely populated regions, Indonesia has vast areas of wilderness that support the world’s second highest level of biodiversity. The country is richly endowed with natural resources, yet poverty is a defining feature of contemporary Indonesia.

Zou HanruChina Daily  Updated: 2005-09-23 06:12

Statistics, they say, conceal more than they reveal. Not always, though.

On September 8, the International Literacy Day, China announced it still has 85 million illiterate people. Most of them are clustered in the country’s less developed rural areas of the landlocked western regions.

Earlier, Liu Xiaoyun, a scholar with China Agricultural University, disclosed that there are the same number of people in China still in the grip of poverty. Again, they are rural residents or migrant “floating” groups from rural areas.

The announcements may have been mutually exclusive but the figure of 85 million is more than a coincidence.

Official explanations are difficult to find but it is common knowledge that the illiterate are more likely to remain poor, and the poor are more likely to be illiterate (or uneducated and unskilled). It is a vicious cycle. The poor cannot afford education, and the illiterate cannot hope to earn enough to overcome poverty.

Those caught in the cycle tend to remain poor throughout their life and, in many cases, down the generations. And almost always, the children are the worst sufferers in this transgenerational poverty.

So how does one get out of the rut?

China enforced a nine-year compulsory education system in 1986; and the Ministry of Education reported a 90-per-cent attendance rate for compulsory education last year.

It is a reasonable postulation that the 10 per cent who didn’t attend schools were children of the disadvantaged groups.

For the poorest group of children, poverty is both a cause and a result of inaccessibility to education. Poor children are less likely to be enrolled in schools or to complete the basic level of education. For, even if schooling is free (a goal of the Chinese Government), uniforms, stationery and transport are not. And these may still be well beyond the means of a poor family.

So what does a family with more than one school-going kid do? It may decide to pull out one or more of its children from school. Unfortunately, in most of the cases it is the girl child that falls victim to the hand of fate.

Xiao Mei, a senior secondary school student, is the daughter of one such poor family in Yuzhong County of Gansu Province. Since the rural household depends on income from agriculture, her father said he could no longer afford education for both children, Xiao and her brother.

But he did not want to be unfair to either of them. So on August 24, he decided to choose the “school-goer” by drawing lots. The boy won.

Unable to bear the pain of having to stay away from school, Xiao Mei tried to commit suicide. Fortunately, she did not succeed. That is how difficult and painful education for a poor family can be.

There is another reason why poor parents are forced to keep their wards out of school: family income. If the child is old enough to work and drops out of school, he/she can contribute, however little, to the family instead of making it pay for his/her education.

In 2003, China spent 3.28 per cent of its gross domestic product (GDP) on education - well below the world’s average of 4.1 per cent for developing countries and merely half that of the developed ones.

Governments at the lowest levels - in townships and counties - shouldered the bulk of the financial burden to provide education for children, most of them in the rural areas.

Unlike central and provincial governments that have a diverse source of revenue, the grass-roots authorities’ income is heavily reliant on agricultural taxes and fees, thus putting them in a real Catch-22 situation as far as rural education is concerned.

The rural poor have to pay more so that grass-roots authorities will be better off financially to provide for their children’s education. But the more they pay, the more impoverished their condition becomes. And the less they pay, the more difficult it is for the authorities to raise education funds.

But worse than that is the choice a poor family has to make: falling deeper into poverty to educate a child, or maintaining the status quo without any real future for the children.

We know the cycle of poverty can be broken through education. So let the central and provincial governments shoulder a bigger share of the financial burden needed to make education truly free, starting with the poorest 10 per cent of school-age kids.

Such a move will help bridge the “education gap,” or inequities in education - giving equal access to all children and relieving the poor of the pinch of education cost.

We all know that if our children’s future remains unpromising, so would be that of the nation.

(China Daily 09/23/2005

By: Andrew Clark in New York and Larry Elliott

The crisis gripping America’s property market was bared yesterday in figures showing a slump in home sales and a collapse in confidence among builders.

Defaults on US home loans have caused a credit crunch which is reverberateing around the world as billions of dollars in liabilities flow through the global financial system. Stock markets on both sides of the Atlantic swung wildly from hour to hour.

In London, after dropping by 100 points at one stage, the FTSE 100 index closed down 34 at 6,109. In New York, a late plunge sent the Dow Jones Industrial Average down 167 points to 12,861, below 13,000 for the first time since April.

Poorer households in America are struggling to keep up repayments on risky, so-called sub-prime mortgages. The National Association of Home Builders said sentiment in the construction industry was at its lowest for 16 years. Its index of confidence, with a midpoint of 50 for a neutral outlook, fell 2 points to 24 during July. Estate agents painted a similar picture. Quarterly sales of existing homes dropped by 10.8% according to the National Association of Realtors, with falls in 41 of America’s 50 states.

The US Federal Reserve injected $7bn of short-term financial liquidity into the banking system. But rumours about problems at America’s biggest homeloans firm, Countrywide Financial, triggered a fifth successive bloody day. On foreign exchanges, sterling was under pressure as investors lost their appetite for the so-called yen carry trade, which involves the purchase of high-yielding assets by borrowing in Japan, where interest rates are low. The pound has been supported by carry-trade dealings, but yesterday fell below $1.99 before rallying to close at $1.9845, a drop of 0.1% on the day. The unwinding of carry trades pushed the yen higher against all other currencies.

Michael Woolfolk, a currency strategist at The Bank of New York Mellon, said: “High-yielding currencies are having a really hard time against the yen. We are in the middle of a credit market crisis in the US, and the truth is that European banks have a lot of exposure to this very same market. The euro and also sterling will keep getting pounded.”

Casualties continued. KKR Financial, an affiliate of private equity firm Kohlberg Kravis Roberts, admitted yesterday it was likely to lose $200m to $250m on disastrous $5bn forays into mortgages. It complained of “disruptions” and “volatility” in obtaining credit. The biggest to see red was Countrywide Financial. Hit by a “sell” recommendation from Merrill Lynch, its shares dropped 12%. Countrywide has admitted more than 5% of its mortgages are “delinquent”, and Merrill said it could face bankruptcy if liquidity worsened.

Yesterday put the Standard & Poor’s 500 index in negative territory for the year. A broader Wall Street indicator than the Dow Jones, the S&P dropped 1.4% to 1,406. In a further sign of a slowing economy, US consumer prices rose by 0.1% last month - below forecasts of a 0.2% increase.

Hedge funds faced a mid-month deadline requiring clients to give notice yesterday to withdraw cash by the end of the quarter. Analysts were watching for signs of a meltdown following problems at Bear Stearns, Goldman Sachs, and other funds using computer-driven trading models.

In Australia, a $1bn hedge fund revealed it had lost an estimated 80% of its value. Basis Capital of Sydney, top in the AsiaHedge awards in 2005, appointed private equity firm Blackstone to advise on options.

Casualties

August 15 
Kohlberg Kravis Roberts affiliate KKR Financial Holdings loses $40m (£20m) from mortgages. Warns of extra $200m hit. Dutch investment bank NIBC, which has €137m (£93m) in sub-prime losses, sells to Icelandic bank Kaupthing for €3bn.

August 14 
UBS, Swiss investment bank, warns profits will be hit by sub-prime losses. Sentinel, US money manager fund, says it will halt redemptions.

August 13 
Goldman Sachs rescues its hedge fund, Global Equity Opportunities, after it loses $1.8bn. Canada’s fifth largest bank, CIBC, writes off C$290m (£137m) in mortgage-backed securities hit by slide in US property.