Related Lending and Bank Performance: Evidence from Indonesia

After the Asian financial crisis of 1997, it was confirmed that banks lend to their related parties in many countries. The question examined in this article is whether related lending functions to alleviate the problems of asymmetric information or transfers profits from depositors and minority shareholders to related parties. The effects of related lending on the profitability and risk of banks in Indonesia are examined using panel data from 1994 to 2007 comprising a total of 74 Indonesian banks. The effects on return on asset (ROA) varied at different periods. Before and right after the crisis, a higher credit allocation to related parties increased ROA. In middle of the crisis, it turned to negative; and this has also been the case in the most recent period as the Indonesian economy has normalized. Effects of related lending on bank risk measured by the Z-score and non-performing loan is not clear. After undergoing bank restructuring, related lending has decreased and the profit structure of banks has changed.

Critical connections : Islamic politics and political economy in Indonesia and Malaysia

This article explores Islamic politics in two Muslim-majority countries in Southeast Asia, Indonesia and Malaysia, by linking their trajectories, from late colonial emergence to recent upsurge, to broad concerns of political economy, including changing social bases, capitalist transformation, state policies, and economic crises. The Indonesian and Malaysian trajectories of Islamic politics are tracked in a comparative exercise that goes beyond the case studies to suggest that much of contemporary Islamic politics cannot be explained by reference to Islam alone, but to how Islamic identities and agendas are forged in contexts of modern and profane social contestation.

The inverted Chinese / China problem in Indonesia : a preliminary analysis on the 2011 Surabaya incident

A clash between the police and journalists covering a Falun Gong gathering in Surabaya 2011 have shown a significant change in understanding the triangular relationship between Indonesia, China and the Ethnic Chinese in Indonesia. During the Suharto period, ethnic Chinese in Indonesia and China as a foreign state were the problems for the Indonesian government. After the political reforms in Indonesia together with the Rise of China in 2000s, in some situation, it is the Indonesian government together with the Chinese government which is the problem for some ethnic Chinese in Indonesia. Ethnic Chinese people were seen to be close with China and their loyalty to the nation was doubted. But now it is the Indonesian government which is viewed as being too close to China and thus harming national integrity, and suspected of being unnationalistic.

Voting behavior in Indonesia from 1999 to 2014 : religious cleavage or economic performance?

In this study, we examine the voting behavior in Indonesian parliamentary elections from 1999 to 2014. After summarizing the changes in Indonesian parties' share of the vote from a historical standpoint, we investigate the voting behavior with simple regression models to analyze the effect of regional characteristics on Islamic/secular parties' vote share, using aggregated panel data at the district level. Then, we also test the hypothesis of retrospective economic voting. The results show that districts which formerly stood strongly behind Islamic parties continued to select those parties, or gave preference to abstention over the parties in some elections. From the point of view of retrospective economic voting, we found that districts which experienced higher per capita economic growth gave more support to the ruling parties, although our results remain tentative because information on 2014 is not yet available.

Excess capital and bank behavior : evidence from Indonesia

The Indonesian banking sector has been restructured since Asian financial crisis and restored to soundness. The capital adequacy ratio (CAR) returned to a sound level; however, the average excess capital has become too high, while credit disbursement has remained low. This paper investigates the determinants of excess capital among Indonesian banks and its effects on credit growth during the 2000s. The results indicate that the determinants of excess capital vary widely depending on bank type. Return on equity (ROE) affects excess capital negatively among domestic banks, and the effect of non-performing loans is mixed, differing for various bank types. Excess capital affects credit growth positively, except among foreign banks.

Two living species of coelacanths?

During the period of September 1997 through July 1998, two coelacanth fishes were captured off Manado Tua Island, Sulawesi, Indonesia. These specimens were caught almost 10,000 km from the only other known population of living coelacanths, Latimeria chalumnae, near the Comores. The Indonesian fish was described recently as a new species, Latimeria menadoensis, based on morphological differentiation and DNA sequence divergence in fragments of the cytochrome b and 12S rRNA genes. We have obtained the sequence of 4,823 bp of mitochondrial DNA from the same specimen, including the entire genes for cytochrome b, 12S rRNA, 16S rRNA, four tRNAs, and the control region. The sequence is 4.1% different from the published sequence of an animal captured from the Comores, indicating substantial divergence between the Indonesian and Comorean populations. Nine morphological and meristic differences are purported to distinguish L. menadoensis and L. chalumnae, based on comparison of a single specimen of L. menadoensis to a description of five individuals of L. chalumnae from the Comores. A survey of the literature provided data on 4 of the characters used to distinguish L. menadoensis from L. chalumnae from an additional 16 African coelacanths; for all 4 characters, the Indonesian sample was within the range of variation reported for the African specimens. Nonetheless, L. chalumnae and L. menadoensis appear to be separate species based on divergence of mitochondrial DNA.

Hikayat Raja Kulawandu : manuscript, 1838

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Body condition indices of Asian green mussels, Perna viridis, from Indonesia

While part of a single country, the Indonesian archipelago covers several biogeographic regions, and the high levels of national shipping likely facilitate transfer of non-native organisms between the different regions. Two vessels of a domestic shipping line appear to have served as a transport vector for the Asian green mussel Perna viridis (Linnaeus, 1758) between regions. This species is indigenous in the western but not in the eastern part of the archipelago, separated historically by the Sunda Shelf. The green mussels collected from the hulls of the ferries when in eastern Indonesia showed a significantly lower body condition index than similar-sized individuals from three different western-Indonesian mussel populations. This was presumably due to reduced food supply during the ships' voyages. Although this transportinduced food shortage may initially limit the invasive potential (through reduced reproductive rates) of the translocated individuals, the risk that the species will extend its distributional range further into eastern Indonesia is high. If the species becomes widely established in eastern Indonesia, there will then be an increased risk of incursions to Australia, where the mussel is listed as a high-priority pest species.