S112 dominates PM debate
Pita defends party’s policies ahead of parliamentary vote on his nomination
Parliamentarians challenged sole prime ministerial candidate Pita Limjaroenrat over his party’s plan to amend the law that protects the royal institution and questioned his past shareholding in iTV, before a vote on his nomination on Thursday.
House representatives and senators spent six hours expressing their opinions on whether they should choose the leader of the Move Forward Party as the country’s 30th prime minister.
Parliament President Wan Muhamad Noor Matha closed the debate and proceeded with the vote starting at 3.52pm, with 676 parliamentarians in attendance. However, Mr Pita still needs 375 votes — a simple majority of 749 combined House and Senate seats — to win the office.
Outside the parliament complex, crowds were beginning to gather, with orange-clad supporters of Move Forward nervously monitoring the vote to gauge whether Mr Pita could achieve a majority.
Police have declared an area within a 50-metre radius from the parliament a no-protest zone. Shipping containers draped with canvas banners portraying pleasant touristic scenes were lined up along Thahan Road. Two anti-riot armoured vehicles were seen nearby.
Inside the chamber, most speakers opposed to Mr Pita’s nomination trained their attention on Move Forward’s plan to amend Section 112 of the Criminal Code, the lese-majeste law.
Chada Thaiset, an opposition Bhumjaithai MP for Uthai Thani, said that any change to Section 112 would cause unrest.
“If you let people insult the monarchy without any laws to keep them in check, our country will burn,” he said. “How about I propose a law allowing people to shoot those insulting the monarchy?”
The law protects the royal institution from offences, insults and threats. But Move Forward contends that has been used mostly by those in power to silence their critics.
Mr Chada said that apart from Move Forward, the seven other coalition allies did not support any change to Section 112. However, Mr Pita has always insisted that his party would propose to amend the section by itself. The proposal is not in the MoU that the eight-party coalition signed.
United Thai Nation MP Wittaya Kaewparadai said Move Forward had brought abnormality to Thai politics because no political party had ever proposed any change to the lese-majeste law.
“At present, 10 political parties in the House, seven other parties that are the coalition allies of MFP and most senators do not support any change to Section 112. This is political abnormality. Only one political party proposes what no other parties ever think about,” Mr Wittaya said.
Satra Sripan, a United Thai Nation MP for Songkhla, said amending Section 112 would cause division and create hatred in society.
Senator Khamnoon Sitthisamarn said a previous MFP proposal to amend the lese-majeste law would either reduce jail terms or even lift punishment for offences against the royal institution.
Senator Praphan Khumee told the joint sitting of the House and the Senate that Mr Pita was unqualified to serve because of his past holding of 42,000 shares in the defunct broadcaster iTV Plc.
The constitution prohibits a shareholder in a media organisation from running in a general election.
Mr Praphan warned parliamentarians that if they voted for an unqualified person, they could be considered as performing duties or exercising their authority in an unconstitutional manner.
Mr Pita told parliamentarians that he was qualified for the premiership, adding that he had never been informed officially about any questions related to his MP qualifications.
He was referred to the move by the Election Commission, which has asked the Constitutional Court to rule on his eligibility in light of the iTV shareholding.
Earlier, Mr Pita complained that the EC never informed him of its doubts or invited him to defend himself.
The EC on Thursday stated that the constitution allowed it to find relevant facts and seek a ruling from the Constitutional Court without having to press an accusation against Mr Pita and call for his defence. It would be up to the court to decide whether it wants to hear from the candidate.
Explanations from an accused person are sought when the EC is dealing with alleged violations of electoral and political party laws, the EC said. In cases where MP qualifications are in doubt, the EC says it is empowered to gather facts without calling an MP to lay a charge.
The EC also denied complaints by Mr Pita and his party that its fact-finding process in the case was unusually quick.
Supporters of Move Forward Party prime ministerial candidate Pita Limjaroenrat sell merchandise outside the Parliament complex in Bangkok before the vote to decide on the country’s next prime minister. (Photo: AFP)
Shipping containers draped with banners showing touristic scenes are placed in front of the Parliament complex to provide security on Thursday. (Photo: AFP)
More supply chain management jobs, skills development initiatives available as Singapore looks to grow sector
The company said it has seen its processes transformed and enhanced by digitalisation and automation over the years.
“Our factory in Tuas is highly automated. The skillset has changed from people doing very manual, very mundane jobs to be able to utilise digital tools and use data to make decisions. This is also the upskilling that we need to continue to do,” said the firm’s chief supply chain officer Michelle Shi-Verdaasdonk.
“Ten years ago, people might not want to have a job as a warehouse or logistics executive, because they think of the environment as dirty, or of the work being heavy duty,” she added.
“But with all the automation that have come into modern warehouses, and also the technologies that are applied literally at your fingertips, it’s (different and) a lot safer today.”
TALENT AND UPSKILLING
Government agencies such as SkillsFuture will work with institutes for higher learning to translate these increasingly sought-after skillsets into training programmes, said WSG’s manufacturing division director Anderson Ee.
They will cater to both employers looking to upskill their existing workforce, as well s individuals seeking to equip themselves with relevant knowledge to join the sector or to progress in their current roles.
“There are ongoing efforts to enhance public awareness of SCM, such as collaboration with industry stakeholders,” Mr Ee said.
“(Our partners have also) launched masterclasses equipping individuals with digital and sustainability skillsets to manage the flow of goods and services in the new world. There is a lot more to be done, and we are working on developing and attracting talents in this particular sector.”
SCM professionals command a median salary of approximately S$5,900, higher than the national median salary of S$4,680, the EDB said.
The EDB and SSG has developed a reference guide on trends reshaping SCM jobs, in-demand skills, and information on training. It will be available on the EDB website on Jul 31.
“These insights will guide our training providers in curriculum development and help enterprises enhance their in-house SCM training programmes,” said Minister of State for Trade and Industry Low Yen Ling.
“They will also help workers get equipped with the necessary skills to upskill and reskill for a rewarding career.”
ASEAN, China agree on guidelines to accelerate South China Sea code of conduct negotiations
JAKARTA: The Association of Southeast Asian Nations (ASEAN) and China on Thursday (Jul 13) agreed on guidelines to accelerate the negotiation of the code of conduct for the South China Sea.
The guidelines were adopted in a meeting between China’s top diplomat Wang Yi and ASEAN’s foreign ministers in Jakarta, where the group has held its annual foreign ministers and related meetings.
Indonesia is the current rotating chair of ASEAN.
“This achievement must continue to build positive momentum to strengthen partnerships that advance a paradigm of inclusivity and openness, respecting the international law including UNCLOS 1982, and encourage the habits to hold dialogues and collaboration,” said Indonesia’s Minister of Foreign Affairs Retno Marsudi, referring to the United Nations Convention on the Law of the Sea which China has ratified.
Mdm Marsudi said she hoped that China would be ASEAN’s trusted partner to foster an “open and inclusive regional architecture”.
“Only then can we achieve win-win cooperation for the sake of creation, of peace, stability and shared prosperity in the Indo-Pacific,” she added.
Details of the guidelines were, however, not revealed.
About one-third of the world’s maritime shipping passes through the South China Sea every year, carrying over US$3 trillion in trade.
It is a hotly contested region with overlapping claims. China claims much of the South China Sea, but ASEAN members Brunei, Malaysia, the Philippines and Vietnam are also claimant states.
Current ASEAN chair Indonesia is not a claimant state in the South China Sea, but it has clashed with China over fishing rights around its Natuna Islands near the disputed waters in the past few years.
Gig workers âmost financially stretchedâ with spending exceeding income: DBS study
RISING MORTGAGES LOOK “MANAGEABLE” FOR NOW
Turning to household debt, DBS said mortgage repayments have increased over the past year amid rising interest rates but remain “manageable” for now due to income growth.
The bank’s median customer is now borrowing around 3 per cent more for a home purchase. Median mortgage payments have also increased by about 12 per cent.
So far, the income growth across all customer groups has been “more than sufficient to offset the rises to mortgage rates and with some to spare”, said DBS Group Research’s analyst Fang Boon Foo.
Nevertheless, higher monthly mortgage payments could still impact those earning below S$5,000.
Firstly, these home owners are allocating a bigger portion – more than 50 per cent – of their income growth to service the increase in monthly mortgage repayments, according to the report.
This is higher than the 45 per cent for those earning between S$5,000 to below S$7,500, 40 per cent for those with income of S$7,500 to below S$10,000, and 43 per cent for income earners of S$10,000 and more.
Secondly, more than half of those earning below S$5,000 have mortgage loans under floating rates, meaning that additional stresses could arise when mortgages are refinanced on higher interest rates, the bank said.
Mr Seah sees more upside to come in the Singapore Overnight Rate Average (SORA), which is the benchmark interest rate used for various financial products, including floating home loans.
Amid the successive interest rate hikes by the US Federal Reserve, SORA has risen more than 10-fold from 0.3 in May last year to about 3.6 currently, he said.
“Our expectation is that the bias is still marginally on the upside. We do expect the SORA to end the year at about 3.7, with one more Fed hike coming up,” the economist added at the media briefing.
Meanwhile, DBS customers have increased their usage of credit cards, with spending up 12.8 per cent as of May 2023 from a year ago.
Reasons for the rise in usage include the ability to tap on card promotions and rewards, as well as qualify for higher interest rates under DBS’ Multiplier savings account.
Despite the increase, credit card debt looks “manageable” as customers are paying their credit card bills on time to avoid the high interest charges, the bank said.
Looking ahead, DBS expects inflation and interest rates to remain elevated. There could also be an additional challenge of slowing growth momentum, which would in turn weigh down on income growth.
“I think the underlying message to everyone is that we need to live within our means. We need to essentially practice prudent budgeting and also to be more watchful in terms of our spending,” said Mr Seah.
Police seize speedboat of Pattaya murder suspect
Investigators say owner might have planned to use it to dump German businessman’s body at sea
PATTAYA: Police have seized a speedboat belonging to a prime suspect in the murder of a German property broker, as they believe he might have intended to use it to dump the victim’s dismembered body at sea.
Investigators from the Nong Prue police station took the 18-foot speedboat from a house on Phra Tamnak Soi 5 in Pattaya on Wednesday night.
The boat was owned by Olaf Thorsten Brinkmann, 52, one of four suspects arrested for alleged involvement in the murder of Hans Peter Mack, 62. The boat was kept at the house of a German friend who alerted police after learning about the arrest of his compatriot, said a police source.
His friend told investigators that Mr Brinkmann had sought help on July 8 to tow his speedboat from Nong Krabok Soi 4 to the Chokchai Garden Home housing estate in Nong Prue.
On July 9, the friend told Mr Brinkmann that he would tow the boat to the Ocean Marina pier in Pattaya. But because it had no registration documents, the boat could not be moored there. He then brought the boat to Phra Tamnak Soi 5.
Surveillance video at a fishing supplies shop showed Mr Brinkmann and another suspect, Shahrukh Karim Uddin, buying some gear at the shop. Mr Uddin, 27, a Pakistani with Thai nationality, was arrested in Kanchanaburi on Wednesday afternoon after trying to flee across the border to Myanmar.
Police believe the two men were planning to go to sea and dump Mack’s body overboard to destroy evidence. However, the dismembered body of the victim was found hidden in a freezer at a rented house in tambon Nong Prue on Monday night — six days after the German man went missing.
Olaf Thorsten Brinkmann, 52, one of three German nationals held in the murder of a 62-year-old compatriot, is arrested at a pub in Bangkok on Tuesday night. (Photo supplied/Chaiyot Pupattanapong)
Officers who searched the house found the freezer containing the body, along with an electric saw, ropes, food seals and bottles of drinking water, soda and beer. The victim’s body had been dismembered, with the head, torso and limbs separated and put into bags inside the 1.50-metre-long freezer.
Mr Brinkmann and Mr Udin were among the four suspects arrested for the murder. Also in custody are two other German women: Petra Christl Grundgreif, 54, and Nicole Frevel, 52. Ms Frevel, who is disabled, rented the house where the body of the German businessman was found.
Mr Uddin was taken to Nong Prue police station on Wednesday night after his arrest in Kanchanaburi, and placed in a cell next to Mr Brinkmann.
His parents and his elder brother arrived at the police station to see Mr Uddin. The tearful parents were seen hugging their son.
Mr Uddin’s parents, who run a frozen seafood business in Phuket, told reporters that they knew Ms Grundgreif, a land broker, as she had approached them two years ago about jointly investing in the seafood business.
The German woman wanted the couple to supply products to her in Pattaya. However, they were reluctant to comply with her request that they send products to her first before receiving any payment.
They said they had had no contact with the woman since the negotiations failed. However, they later learned that their son had contacted the woman about investing in a property business.
The parents said they tried to persuade him not to do business with the woman, but to no avail. Mr Uddin later told them that he had received money from a land sale in Phuket from the woman. After that, the parents said they had not paid further attention to their son’s business.
They said they were shocked after learning that their son had been arrested.
Shahrukh Karim Uddin, 27, a Pakistani with Thai nationality, is taken to Nong Prue police station in Chon Buri on Wednesday night after he was arrested in Kanchanaburi. (Photo supplied/Chaiyot Pupattanapong)
Childcare centres not required to operate on Saturdays from 2025
Speaking at the Professional Development Programme appointment ceremony organised by the Early Childhood Development Agency (ECDA), Minister for Social and Family Development Masagos Zulkifli said a survey found that 98 per cent of families using preschool services do not need them on Saturdays.
There was general consensus among more than 8,000 parents surveyed that closing childcare centres on Saturdays would enable educators to have better work-life balance and improve their well-being, he added.
“The expectation to work on Saturdays weighs down on educators, who want to spend more time with their families on weekends and recharge,” he said.
MINORITY REQUIRE SATURDAY SERVICES
There were a small number of families who require care arrangements on Saturdays as both parents may be working, Mr Masagos noted.
With the changes taking place in phases, preschools, parents, and employers have sufficient time to work out the arrangements, he said.
“This timeline allows the small number of families affected by this change to work out arrangements with their employers or to make alternative caregiving arrangements,” he said.
He urged employers to support affected employees and suggested that families can consider tapping on paid or community-based options, such as engaging informal babysitting services.
“We will continue to explore ways to improve the caregiving options available to families who really need it,” he said.
TRANSFORMING THE SECTOR
The proposed change is part of the government’s plan to transform the sector through digitalisation, to better address evolving preschool needs, and make early childhood education a more attractive career choice.
Shanghai legislation chief Dong Yunhu purged in China corruption investigation
BEIJING: Shanghai’s top legislator is under investigation for corruption, making him the most senior official to be disgraced since the Communist Party wrapped up a major reshuffle last October. The Central Commission for Discipline Inspection said on Wednesday (Jul 12) that Dong Yunhu, head of the city’s lawmaking body, isContinue Reading
The danger of US-China hedging in SE Asia
The study of hedging emerged because the traditional security concepts of balancing and bandwagoning are insufficient for understanding how smaller states are responding to US-China rivalry.
While there is no scholarly consensus on a definition, hedging offers an alternative approach to categorizing the foreign and security policy choices exhibited by Southeast Asian countries.
In this context, hedging means sending signals that generate ambiguity over the extent of a state’s shared security interests with rival major powers, representing its interest in maintaining positive relations with both.
While security interests are normally reflected in policy choices like purchasing weapons, joint training exercises and security treaties, Washington and Beijing increasingly see economic policies as signals of friendship or animosity.
Australia learned this lesson in 2018 when it excluded Chinese company Huawei from its 5G network. Canberra claimed that this decision only concerned internal network security, but Beijing understood it not only as a signal of lack of trust but of hostility. Conversely, it was praised by then-US president Donald Trump.
Those governments that have followed Australia typically share fewer security interests with China compared with those utilizing Huawei’s 5G technology. Economic policy can now be a meaningful indicator of security alignment.
Economic and technological connectivity is increasingly being “weaponized” and is becoming a source of geopolitical power and vulnerability. The United States can affect Beijing’s battlefield capabilities by restricting semiconductor technology, while China has disrupted multiple bilateral trading relationships, including with key US allies, in pursuit of strategic aims.
Weaponized interdependence means governments are wary of the national security and geopolitical implications of existing and potential economic relationships. How governments manage these economic relationships offers insight into their underlying security interests.
Washington and Beijing are expanding the scope of what policy domains and behaviors affect national security. The Trump administration claimed that “economic security is national security,” while US President Joe Biden’s National Security Advisor explained that maintaining “as large a lead as possible” in certain technologies was a national security imperative.
The Chinese Communist Party is even more expansive in its “securitization of everything.” China’s interests as a rising power are naturally expanding, but its political system means that the Party does not separate its interests from the nation’s.
Hence any behavior — including economic policy — at home or abroad that potentially affects the Party’s political legitimacy is considered a threat to China’s national security.
Southeast Asian states want a stable geopolitical environment to focus on their economic development. They do not want to be forced to “take sides” in any hegemonic rivalry whereby Washington or Beijing could conclude that the smaller state’s security interests oppose theirs.
But if weaponized interdependence means more economic and technological policies are perceived as zero-sum by great powers, the policy space for hedging shrinks regardless of the smaller state’s motivation.
A government might choose Chinese telecommunications providers purely based on cost, speed of rollout and quality, and be relatively unconcerned about national security risks.
Yet Washington might assess this as compromising defense or economic cooperation and step back. Alternatively, Beijing may judge as hostile decisions to exclude Chinese providers based on network security risks.
Over the short-to-medium term, Washington and Beijing will continue their partial decoupling and vigorous competition across a range of emerging and critical technologies. These may include digital technologies, advanced manufacturing and materials, energy and biotechnology.
Given the perceived vulnerability of technological interdependence by both sides — a technology security dilemma — partial decoupling between the superpowers is probably needed for longer-term strategic equilibrium.
Maintaining a hedging strategy will require Southeast Asian states to locate themselves economically within a partially decoupled system in a way that avoids taking sides. This will be challenging, especially as the great powers build walls to separate themselves economically and technologically.
Southeast Asian governments will have to make choices regarding who provides technology products and the standards embedded within them. These choices may have a strong zero-sum element.
Australia’s Foreign Minister Penny Wong argues that regional states should be confident in exercising their agency to shape their external environment. Hedging, especially to avoid taking sides, risks sidelining Southeast Asian states at arguably the most consequential geopolitical moment since their independence.
Even if hedging is preferred, policymakers must be creative to shape the regional order actively and positively.
One area where economic hedging may have a real impact is critical technology standards. Standards are historically developed and propagated by the most powerful countries. Their experts dominate international standards-making bodies and their companies embed these standards in their products, which purchasers then adopt by default.
Fundamental to technological standards is interoperability — meaning that systems are compatible with one another. Technology standards must support interoperability by enabling the development of new products and technologies that can connect with existing systems.
But in an age of technological decoupling, interoperability may be yielding to closed and fragmented systems.
Individually or working collectively through ASEAN, hedging by Southeast Asian states may require the promulgation of technology standards that do not force countries to choose one technology ecosystem over another.
Darren J Lim is Senior Lecturer at the School of Politics and International Relations, The Australian National University.
This article was originally published by East Asia Forum and is republished under a Creative Commons license.
GST: New tax threatens India’s booming online gaming industry
Getty ImagesThe Indian government’s decision to impose a 28% tax on online gaming poses an “existential threat” to the booming industry and could spell its death knell, say experts.
Shares of Indian online gaming platforms and casinos have crashed following the GST (Goods and Services Tax) Council’s decision.
The country’s 900+ gaming start-ups had been paying a small tax on the fee they charged for offering games. But the imposition of a 28% GST on the full face value of a gaming transaction will mean the entire amount collected from players will now come under the ambit of taxation.
According to industry estimates, total tax collection on player winnings will go beyond 50%, including GST, platform commissions and income taxeswhen the new law is implemented.
In effect, for every $100 (£76.8) spent by a player, there will be a “sunk cost” of $28 towards GST, in addition to a $5-15 charge by the gaming platform and a 30% tax deducted at source (TDS) on any winnings drawn.
This will “disincentivise players and is totally inconsistent with global standards” where VAT or GST is levied at a median rate, and that too only on platform fees or commissions, said Sudipta Bhattacharjee, partner at corporate law firm Khaitan & Co.
“The move has completely blindsided the industry. It will shake investor confidence and lead to a funding winter,” Mr Bhattacharjee added.
India’s gaming boom
The online gaming industry has seen a massive boom in India over the last five years, with an annual compounded growth rate of 28-30%. Driven by easy access to affordable smart phones and cheap mobile data, the sector attracted $2.5bn in foreign direct investment, including from the likes of Tiger Global.
But these growth rates will now be called into question as the GST council’s decision will impact startups at “multiple levels”, including their user base, revenues as well as investor sentiment, according to Soham Thacker, Founder & of CEO of GamerJi – an eSports tournament company.
“Many gaming companies, in order to limit the impact on the investors side, may choose to relocate their business outside India,” Mr Thacker added.
“They have killed the multibillion-dollar industry with a single stroke. And at the same time the decision could give a massive boost to illegal and illegitimate operators in the country,” Gaurav Gaggar, Promoter of Poker High, a poker site, said.
Terming the decision “unconstitutional, irrational, and egregious”, the All India Gaming Federation said the government had ignored over 60 years of “settled legal jurisprudence” by lumping online skill gaming with gambling activities.
Gambling, which is seen as a chance-based game, is illegal in many India states and is frowned upon. But most states have allowed online games which are seen as skill-based.
The industry body expects hundreds of thousands of job losses in the online gaming sector because of the latest move.
Gaming startups in India currently employ 50,000 people and were expecting to create another 3,50,000 direct and 10,00,000 indirect jobs by 2028.
A ‘catastrophic’ move
Many gaming companies the BBC spoke to said there was a lack of consistency behind the ruling.
“It is very unfortunate that when the government has been supporting the industry… such a legally untenable decision has been taken,” Roland Landers, CEO of the All India Gaming Federation said in a statement. “It will be catastrophic for the $1tn digital economy dream of the prime minister.”
Indian PM Narendra Modi has on more than one occasion praised the gaming industry as a sunrise sector that had the potential to create jobs and cater to the global market.
“This kind of extortionist tax regime flies in the face of these steps and advocacy needs to happen at multiple levels to retract this proposal,” said Mr Bhattacharjee.
He expects the gaming industry to unite and mount a strong legal challenge if the federal and state governments go ahead and enact the amendments into their tax laws.
But India’s revenue secretary called the move a “unanimous” decision that would not be reviewed or rolled back.
The moral question
Announcing the decision late on Tuesday, Finance Minister Nirmala Sitharaman said that the GST council, which comprises of federal and state finance ministers, said “no one wanted to kill an industry”.
“But they can’t be encouraged to such an extent over essential goods and services,” she said.
The 28% tax is a “step in the right direction”, Siddhartha Iyer, a Supreme Court lawyer who has been fighting to ban online gaming told the BBC.
Mr Iyer called gaming a “speculative activity”.
“Every week there is a story of someone killing themselves because of this [debts incurred due to online gaming],” he said.
“Here, under the GST regime, the government has taken the view that [these games] are gambling and that is correct in my opinion because you are putting a wager on the performance of something not in your control,” Mr Iyer added. “We tax alcohol and cigarettes because we want to discourage people from these activities, it should be the same for this [online gaming] as well.”
Others like Faisal Maqbool, a former gaming addict who lost close to 400,000 rupees ($5,000, £3,750) while playing an online card game in 2022, say even stricter measures are needed.
“This is an addiction. And it has afflicted children and teenagers. Along with higher taxes, the government needed to put in restrictions on the basis of age, income etc. I vouch for a total ban on these activities,” Mr Maqbool told the BBC.
Read more India stories from the BBC:
Long, slow death of Indonesiaâs national plane dream
JAKARTA – Scattered along the runway at state-owned Industri Pesawat Terbang Nusantara’s (IPTN) aircraft manufacturing plant, workers punched the air and shouted “teknologi! teknologi!” as the twin-engine turboprop lifted off into blue skies over the hill city of Bandung.
It was August 10, 1995, and the enthusiastic crowd was witnessing the maiden flight of IPTN’s fly-by-wire N-250 commuter plane, the centerpiece of then-research and technology minister B J Habibie’s vision of using technology to drive national development.
The flight of the homegrown 50-seater went without a hitch, but a year later IPTN test pilot Erwin Danoewinata, 39, and five crewmen were killed when their CN-235 cargo plane crashed during an experimental low-altitude parachute extraction test in West Java.
Two years after that, the N-250 also crashed and burned – a victim of the 1997-98 Asian financial crisis which brought down then-president Suharto and put an abrupt halt to the work of Habibie, the brilliant German-trained engineer who briefly became his successor.
Last week delivered what may be the final nail in the coffin with the winding up of Regio Aviasi Industri (RAI), the private company Habibie founded in 2012 to keep alive the ambitious project – but with a larger, 80-seat turbo-prop known as the R-80.
It has been a sad time for RAI president-director Agung Nugroho, 65, IPTN’S former technical director and Habibie’s assistant during what he describes as the “golden era” in Indonesian aviation that may well have come ahead of its time.
But he is also now embarking on a new enterprise, developing modestly priced, cargo-carrying helicopter drones he hopes will lay the regulatory and operational groundwork for Indonesia to eventually become an unmanned aerial vehicle (UAV) hub.
Backed by private investors, newly formed PT Aviasi Indonesia Maju (AIM) plans to convert German-made EDM CoAX 600 drones for Indonesian conditions, especially for flying across remote stretches of mountainous and largely roadless Papua.
When Suharto was forced to sign the tough US$42 billion IMF bailout package in early 1998, the hardly-transparent IPTN was one of the casualties, losing its subsidies and forced to pare down its workforce from 16,000 to 3,600 almost overnight.
Deposed from the presidency after only 14 months, Habibie refused to let the national plane die. Between 2005 and 2009, his team of aeronautical experts vainly tried to convince the Susilo Bambang Yudhoyono government to revive the project.
But those efforts were stymied by residual IMF austerity measures. The search for private offshore funding also ran into a roadblock when it was determined that the Saudi Arabia-based Islamic Development Bank didn’t have sufficient capital.
“I never wanted to be president,” the ever-excitable Habibie insisted in an interview over tea in the vaulted library of his Jakarta home in 2012. “The only thing I ever wanted to do was build aeroplanes.”
The former Messerschmitt-Bolkow-Blohm engineer remained embittered over how the N-250 had become a victim of the bailout. But while realizing the economy came first, he never let go of something he was reluctant to call a dream.
In fact, Habibie said his “vision” was in line with founding president Sukarno, who had sent many of Indonesia’s brightest young students to Holland and Germany for technical education. Suharto carried it on, making Habibe his vice-president in the dying months of his 32-year rule.
Habibie’s most controversial move came in 1993 when, at his urging, Indonesia bought nearly a third of the former East German Navy, namely 16 Parchim-class anti-submarine corvettes, 14 dual-use tank landing ships and 12 minesweepers.
It is part of folklore that on the delivery voyage out to Indonesia, one of the 1,700-tonne landing craft nearly foundered during a storm in the Bay of Biscay, reportedly because it was overloaded with Mercedes cars.
Already considered overpriced, the $482 million deal went ahead despite the necessary injection of more money to refurbish the warships, which were designed to operate in the confines of the Baltic Sea and not in tropical waters.
Habibie saw the mastery of technology and the growth of infrastructure as the best way to develop Indonesia and ensure the equitable distribution of wealth. In that, he may have a kindred spirit in current President Joko Widodo.
In 2011, Habibie’s team dropped the N-250 and over the next three years began work on the R-80 in cooperation with Turkish Aerospace, designing the aerodynamic surfaces, the structural concept and the systems architecture.
RAI also started coordinating with the government and PT Dirgantara Indonesia (DI), the new name for the downsized IPTN and its manufacturing facilities in Bandung, south of Jakarta.
“Our role was to create something that was viable and feasible for the government to continue,“ Nugroho told Asia Times. “It was not meant to be our property. We wanted to offer it to the government and make use of DI.”
State funding wasn’t possible but the project was placed on Widodo’s list of National Strategic Projects (NSP) – a move that was more political than anything whenonly private investors would be involved until the commercial phase.
The R-80 was meant to fly in 2018 – 23 years after the N-250’s first flight. Then, Suharto embraced his protege and whispered “I am very proud” before unveiling a $2 billion plan to put an even more ambitious regional jet, the N-2130, in the air by 2003.
By the time Habibie passed away in 2019 at the age of 83, the R-80 had failed to make it off the drawing board. But it did receive a surprise offer from Russia’s Ilyushin, the maker of Indonesia’s first presidential jet, to invest $700 million in exchange for the firm’s entry into the Indonesian market.
Although Russian technology was to be incorporated into the R-80 prototype, most of the key components would have been Western imports because, as Nugroho put it, “they were more saleable.”
The arrangement had barely gotten off the ground, however, when Covid-19 struck – followed by the Russian invasion of Ukraine, bringing with it sanctions against Russian firms.
In 2021, the government removed the plane’s NSP status and with it finally went any chance of RAI raising the $3 billion needed to build a prototype at DI’s plant.
Habibie’s son, Ilham, told a recent interviewer there was never enough money to revive the project and the mere nine billion rupiah ($600,000) RAI received in public donations revealed a lack of community interest.
Although Ilham is reluctant to carry on his father’s legacy, other investors are persisting with the $10.3 million plan to introduce drones to Papua and other remote regions currently serviced by only 240 registered general aviation aircraft.
Capable of carrying 275 kilograms of cargo over distances of up to 200 kilometers, the $500,000 German-made EDM could be expected to find a ready market among Papua’s 12 small cargo airlines, looking to cut costs and open new routes.
Market research shows that 97% of Papua’s airstrips, which can realistically be used for drone operations, are within range of a hub airport.
According to the International Air Transport Association (IATA), Indonesia is the world’s second-fastest-growing aviation market after China, with turboprops like the ATR-72 and Bombardier Q400 filling out the fleets of 14 domestic airlines.
That was the sort of spurt the far-sighted Habibie anticipated in the aviation industry back in the mid-1990s before the banking system imploded, set progress back by nearly a decade and doomed the national aerospace project.
For Habibie and Nugroho, it was particularly painful to watch Brazil’s Embraer going on to become a market leader with its E190 regional jet – similar to the still-born N-2130 – which was launched at the Paris Air Show in 2002.
Other firms that also sought to launch a regional jet included Mitsubishi, China’s Comac, Bombardier and Sukhoi, one of whose Superjet 100s crashed on a demonstration flight near Jakarta in 2012, killing all 45 people aboard.
DI was declared bankrupt in 2007, but the Supreme Court quashed the decision on appeal and in the years since the company has continued to produce the CN-235, the NC-212 and, more recently, the smaller N-219 Nurtanio.
A 19-seat variant of the Spanish-designed CASA-212 – and still the subject of certification issues – the N-219 is emerging as a domestic replacement for Canada’s venerable de Havilland DHC-6 Twin Otter, a familiar sight in Indonesian skies.
DI is currently seeking a production license for long-time partner CASA’s CN-295, a medium tactical transport aircraft which is now being built by Airbus Industries and is already in service with the Indonesian Air Force.
According to its website, IPTN/DI has produced 466 aircraft and helicopters over its lifespan, including more than 200 CN-235s, used for transport and maritime reconnaissance, and 120 NC-212/N-219s.
Its 4,000 employees also continue to make components for Airbus and Eurocopter, while several hundred of the highly-skilled workers laid off in 1999 subsequently found employment with Airbus, Boeing and even Embraer.
Some also went to work for Turkish Aerospace Industries, which currently counts Ukraine among its customers and has been trying to interest the Indonesian Armed Forces (TNI) in its $25 million Bayraktar TB-2 armed drone.
As for the solitary N-250, it never flew again after its 56-minute maiden flight and now sits in an aerospace museum in Jogjakarta, a curiosity for a new generation witnessing the rebirth of Indonesia as an industrialized state.
“We hope it can remain a symbol of the capacity of Indonesia to produce its own (aircraft),” Ilham says. But asked if the project can be revived, he responds: I’m an optimist, but I’m also a realist.” He left the rest unsaid.
Nugroho still holds out hope after recently having his comprehensive roadmap, covering the entire aerospace eco-system from training to manufacturing and research, included in a National Development Planning Agency (Bappenas) White Paper.
“This is our greatest achievement,” he says while acknowledging progress will be slow because of the need for a timetable and the fact that the White Paper must become part of a long-term national development plan. “The idea is still there.”