Chairship system and decision making by consensus in international agreements : the case of ASEAN

How are different positions reconciled under decision making by consensus in international agreements? This article aims to answer this question. Consensus rule provides each participant a veto, which risks resulting in non-agreement. Taking ASEAN as a case study of international organizations that have adopted consensus rule as the main decision-making procedure, this article presents the chairship system as an analytical scheme to examine how different positions are or are not reconciled under consensus rule. The system is based on conventional knowledge regarding the chair in international conference, which can be defined as an institution where the role of the chair is taken by one member state in an international organization and plays a role in agenda-setting. The agenda-setting power given to the chair varies across organizations. This article assumes that the chair in ASEAN is given a relatively strong agenda-setting power to enable the chair to reach agreements and bias such agreements in its own favor.

Bank restructuring and financial institution reform in Indonesia

The banking sector underwent drastic reform in post-crisis Indonesia. Bank restructuring, driven by IMF conditionalities, resulted in the exit of insolvent banks and ownership changes of major private banks. Through recapitalization and sales of government-held shares, foreign-owned banks emerged as leading actors in the place of business-group-affiliated banks. As part of the restructuring process, an exit rule was created. The central bank, which up to that time had been given only partial authority under the jurisdiction of the Minister of Finance, now gained a full range of authority over banks. The central bank's supervision system on banks, risk management systems at individual banks, and their efforts to build risk management capacities, began to function. This is totally different from the old financial institution under the Soeharto regime, where banks had no incentive to control risks, as the regime tacitly ensured their survival.

Forestry Sector Reform and Distributional Change of Natural Resource Rent in Indonesia

After the collapse of the centralized Soeharto regime, deforestation caused by over-logging accelerated. To tackle this problem, an IMF/World Bank-led forestry sector reform program adopted a market-friendly approach involving the resumption of round wood exports and raising of the resource rent fee, with the aim to stop rent accumulation by plywood companies, which had enjoyed a supply of round wood at privileged prices. The Indonesian government, for its part, decentralized the forest concession management system to provide incentives for local governments and communities to carry out sustainable forest management. However, neither policy reform worked effectively. The round wood export ban was reimposed and the forest management system centralized again with cooperation from a newly funded industry-led institution. In the midst of the confusion surrounding the policy reversal, the gap between the price of round wood in international and domestic markets failed to contract, although rent allocations to plywood industries were reduced during 1998-2003. The rents were not collected properly by the government, but accumulated unexpectedly in the hands of players in the black market for round wood.