Tuesday, 30 June 2009

PERTAMINA Plans to Stop Import of Oil Fuel by 2017

PT Pertamina Persero planned to halt import of oil fuel by 2017. By that time, a number of new Pertamina processing plants would be in operation to meet local need for oil.

The need for oil in 2017 would reach 1,612 MPBD. This need would fulfilled by domestic plants with the capacity of 1,503 MPBD – and the rest would be covered by the alternative energy.

According to the Director of Processing Pertamina Rukmi Hadiartini, this was based on the assumption that the program of biofuel [BBN] was well underway. There were already solar fuel from coal gasification also coal liquefaction, and other alternative energy programs.

A number of Pertamina energy producing plan presently underway were:
- Revamping FCCU plant at the capacity of 20,5 MBSD which was planned to be readyand to start operation by 2012.
- RFCC Cilacap at the capacity of 62 MBSD which was planed for the operation in 2013.
- Bottom Upgrading Balikpapan at the capacity of 40 MBSD which was planed for operation in 2014.
- The Cilacap Blue Sky Project at the capacity of 19 MBSD to be operational by 2014.
- The Banten Plan Project at the capacity of 150 MBSD to be completed and operational by 2015.

- The East Java at the capacity of 200 MBSD planned for operation in 2007.

Economic Policy Proposed by Presidential Candidates Show Distinct Differences

There were clear differences in the economic policy proposed by president/vice president candidates Susilo Bambang Yudhoyono-Boediono and he rivals pairs Jusuf Kala –Wiranto and Megawati-Prabowo, wherein SBY-Boediono would continue Liberal Platform, while two other candidate duo Jusuf Kala –Wiranto and Megawati-Prabowo planned a change of course through a constitutional economic policy.

“In the event that the SBY-Boediono duo emerged as winners in the coming presidential election, they would continue the focus on stability of macro-economy” Handri Saparini of Econit disclosed this to Business News after acting as spokesperson in a discussion on Presidential whether to be run in one round or two rounds; the discussion was conducted by Soegeng Sarjadi Syndicate in Jakarta, Saturday [13/5].

Macro economic stability seemed to be set as absolutely unconditional, as they believed that macro-stability might energize the real sector. In fact they were two different things. They [the government] did not touch the real sector, because they believe that it was the economic stability which would energizes the real sector. The Notion that if the stock market strengthen meant the real sector would be jacked up was wrong, because the stock market was up due to the in-flow of “hot money”.

If the reference was macro stability, the real sector would be neglected. For example, to maintain the stability, inflation should be down-pressed, by increasing interest rate. The result inflation was controlled, but the real sector crumbled down.

Secondly, liberalization knows no correction. To illustrate, the traditional retail sector would be eroded by modern retail. Even if there were intention of the present Government to limit foreign retail to become one percent in Japan, such proposal could not be trusted because the basic belief was that the big [modern] retail should synchronise with the small [traditional] retail whereby they could synergize. The truth was that as long as the regulation were as the way it was now, such a mechanism was never feasible.

Meanwhile the JK-Win and Mega-Pro policy tend to be perceived as something frightening, because they would bring drastic change in the nation’s economic system. This was not extremely true, because change should not be brought overnight, but by stages. An immediate change would required fund from the state budget [APBN] which called for parliamentary approval. For example, in case the state budget would re-allocated to other sectors which differ form the current channel. Correction of a macro system could only be done by stages, but it must be done or else that foreign ownership at the Banking sector, which now has reached above 50%, might soar to 95%. On this aspect Prabowo stated that the money in government’s banks should be allocated to domestic needs. In other words, correction would be needed on the law of ownership.
Another example, Jusuf Kala stated that in terms in natural resources, for the time being natural gas should be allowed for export-meaning, in the short term gas should be prioritized for domestic needs. “That was something thinkable; but what about the present state where foreign ownership had reached 85% legal restructuring becomes a pressing necessity”.

National Energy Policy Targeted to be Ready by Early 2010

The Minister of Energy and Mineral Resources Purnomo Yusgiantoro as Chairman of the National Energy Board [DEN] set the target for the formulation of National Energy policy as the primary mission of DEN to be ready by early 2010. This was disclosed during yhe press conference after the first session of DEN meeting at the Auditorium of ESDM Friday [12/6].

Minister of Energy and Mineral Resources Purnomo elaborated that in line with that first of DEN. i.e., to plan and formulate the national energy policy to stipulated by the Parliament’s approval, DEN would immediately set up a technical team to discus draft of the National Energy Policy which was targeted to be ready before October 2009 or before inauguration of the elected president. Further through the period of October 2009 to February 2010 the draft would be adjusted to the mission in energy affairs in the new cabinet.

Hence by early 2010 the National Energy would be approved by the Parliament to be stipulated so it could be in parallel with the Medium Term Development Plan [RPJM]. “We are now in possession of National Energy Policy of the Medium Term” the Minister remarked.

At the initial session of DEN, 4 drafts of plan to be decided had been distributed to all members. The draft encompassed working regulation, code of ethics, session procedures, an work plan of DEN. In this opportunity Minister of Energy and Mineral Resources also issued a letter of appointment of DEN members to the Minister of Transportation Jusman Sjafi Djamal, 6 other Government officials and 7 other DEN members from the concerned parties representing the academy, industry, technology, environments and consumers.

G-8 Financial Ministers Urged to Support UN Crisis Summit

The World Future Council [WFC] on Friday urged the finance ministers of the G-8 states, who were having a meeting on that day in Lecoe, Italy to help to ensure the success of the UN High Level Summit on the global financial crisis and its impact on development. The Summit would be held on June 16 - 24 in New York.

The UN had pled the world to take constructive measure to protect the poor communities from the mounting global economy crisis and carry out the process of re- building the world’s economy. Regret fully, the role of wealthy states to take to prompt and effective actions toward reformation were still not strongly felt.

“The global crisis now throws the great challenges and opportunity to run an effective system which would promise security for all rather than securing money for the wealthy few” this was statement made by the WFC Council and ex- assistant secretary of the UN Hans von Sponeck as disclosed to Business News by E-mail on Saturday [13/16].

The original negotiation document lead by the President of the UN General Assembly Mique D’Escoto Brockmann deviated greatly from the consensus on reformation agreed with IMF, the World Bank and G-20.

The consensus emphasized on inter-system correlation between the financial sector, food, energy and ecology. The recommendation which involved a number of global institution to tackle cases of corruption, competition, security of financial products, global protection, reserves credit and International taxation schemes. What was more, the present document underway was even way beyond the platform that was supposed to be the policy of the G-8.

“There is one very pressing circumstance which calls for immediate and fundamental reform” remarked Jacob von Jackhill, founder of Future of the World on Friday [12/6].

“Presently recovery of the stock market and bank are for the most part the result of change in the standard of accounting. We should not think the platform of wealth but work to set global rules to prioritize on the majority”.

To be less sensitive and un-responsive to the inter-related crisis would worsen economic instability and hamper the eco-system in the future, increasing human insecurity or even trigger conflicts.

“The momentum to rebuild a safe and just global economy had gone. As a global organization, the UN should pay a key role in guiding a process “ Gopel Maja, Director of WFC made his remark on occasion of Program of Justice for the future. “Especially in times when the economic analysis of the UN is more accurate than that of the IMF or World Bank”.
The World Future Council, by the time it schemed up policies, represented the interest of the Future generation. As many as 50 members from all over the world had succeeded in making changes. The World Future Council had meet the challenges of the future by the right decision making and effective solution to problem.

Ambitious biotechnology project launched in Ghent

Flanders, one of the leading biotech regions, has joined forces with the Netherlands in Bio Base Europe. This project aims to foster innovation by providing companies with the requisite infrastructure to test and perfect their industrial processes.
Many innovative ideas in biotechnology are never commercially realized because of the inability of small companies to test their processes on an industrial scale. That’s why Flanders and the Netherlands have launched the project Bio Base Europe.
This project consists of a testing plant in the Port of Ghent (Flanders) and a training center in nearby Terneuzen (the Netherlands). Both facilities are open to companies or other parties who wish to develop their innovative ideas in practical industrial processes.
The ‘Ports Group of Ghent and Terneuzen’ is already the European leader in biofuel production. This new research facility will strengthen this position. The testing plant in the Port of Ghent is located close to the biofuel plants Bioro and Alco Bio Fuel, and will become operational next year. 35 people will be employed in the project, which represents a total investment of EUR 21 million. (source

Dairy producers face bankruptcy

Around 120,000 dairy farmers registered in a number of cooperatives are facing bankruptcy, following another plan to reduce the local milk purchasing price. On 1 May 2009, the Milk Processing Industry (IPS) started to reduce the price Rp 150 per liter. IPS is now planning for another Rp 150 cut on 1 July 2009. The Indonesian Milk Cooperatives Association (GKSI) urged the government to do something about it since the milk production cost keeps climbing every year.
Source: PA Asia - Public Affairs and CSR from Investor Daily, 18 June, p.21

Indonesians spend more regardless of financial crisis

The Indonesian retail market, in the first four months of the year, remains on a positive trajectory as consumers in both modern and traditional markets continue to spend more - regardless of the impact of the financial crisis on the economy. A survey conducted in seven cities by the Nielsen Company revealed that consumer spending grew by 7.4 percent as of the end of April and is expected to accelerate with the easing of the liquidity crisis. The survey reveals the retail market, both in modern and traditional sectors, grew consistently from January to April with modern retailing growing by 13.4 percent, while traditional retailing increased by 4.1 percent.
Source: PA Asia - Public Affairs and CSR from The Jakarta Post, 17 June, p.3

New bill to allow PLN to charge region-based electricity tariff

The government proposes to adopt a region-based electricity tariff that may mean customers in Java will end up paying higher rates than those in other areas. The proposal is included in the electricity bill, which is currently being deliberated by the government and the House of Representatives, J. Purwono, director general for electricity and energy utilization at the Energy and Mineral Resources Ministry said Wednesday. Currently, electricity rates are based on the allocated power capacity per customer. Customers with the same capacity from all regions pay the same tariff rate.
Source: PA Asia - Public Affairs and CSR fromThe Jakarta Post, 18 June, p.14

Wednesday, 17 June 2009

Signing of Joint Account for Deposit of Abandonment and Site Restoration Budgets

BP MIGAS and 6 contractors signed a joint account to deposit their abandonment and site restoration funds with Bank BNI and Bank Mandiri. The total budgets deposits in the state banks totaled USD 38 millions.

In detail, the Joint Account Agreements signed were :

1. Between BP MIGAS, BP Berau Ltd and 2 banks, namely PT BNI (Persero) Tbk and PT Bank Mandiri Tbk;
2. Between BP MIGAS, BP Muturi Ltd and 2 banks, namely PT Bank BNI (Persero) Tbk and PT Bank Mandiri Tbk;
3. Between BP MIGAS, BP Wiriagar Ltd and 2 banks, namely PT Bank BNI (Persero) Tbk and PT Bank Mandiri Tbk;
4. Between BP MIGAS, ConocoPhilips Ltd, and PT Bank Mandiri (Persero) Tbk;
5. Between BP MIGAS, Chevron Makassar Ltd, and PT Bank Mandiri Tbk;
6. Between BP MIGAS, JOB Pertamina, Medco E&P, Tomori Sulawesi and PT Bank BNI (Persero) Tbk.

The signing of the joint account agreements is an attempt to comply with Government Regulation No. 35/2004 on Oil and Gas Upstream Business Activities and Regulation of Minister of Energy and Mineral Resources No. 22/2008 on Non-Cost-Recoverable Costs and as the implementation of Cooperation Contract.

Abandonment and site restoration budgets are amounts set aside by Cooperation Contract Contractors to uproot oil production facilities and restore environmental surroundings after they completed their operations.

The obligation to set aside abandonment and site restoration budgets applies to contracts signed since 1995 after Indonesia ratified the UN Convention on Law of the Sea (UCLOS) in 1985.

Head of BP MIGAS, R. Priyono, gladly welcome the signing ceremony since it indicates that oil and gas upstream industries have become a stimulator for other sectors, namely national banks. This was necessary in order to provide maximum benefits for the state.

Oil and gas upstream business activities significantly depend on non-renewable energy so this industry must give a multiplier effects on other sectors.
The formation of the joint account give a contribution to the development of national banking. Moreover, in future, there will be more banks to follow. If the previous signing ceremony was held in end of 2008 involving only 2 state banks, namely Bank Mandiri and Bank BNI. At present, there are 3 state banks involved in the signing of the joint account.

ASEAN Embarked on a Patent Cooperation Project

Heads of ASEAN Intellectual Property Offices in Cha-Am, Thailand, announced the launching of the first patent cooperation in the region to enable businessman, especially small and medium enterprises and investors, so get patent rights for their innovations in the region.

“Being called the ASEAN Patent Examination Cooperation (ASPEC), this project laid a significant foundation for the manifestation of ASEAN Economic Communication (AEC) and in line with the collective goal of ASEAN in providing protection to intellectual property rights effectively and efficiently”, said Mr. Kamel Mohamad, Director General of intellectual Property Cooperation in Malaysia and Chairman of ASEAN Working Group on Intellectual Property Cooperation (AWFIPC) in a statement received by Business News from the ASEAN Secretariat through e-mail.

According to Pangrat Asavapisit, Director General of Thailand’s Intellectual Property Department, the project started on June 2009 would not only support “creative economy” in ASEAN, but would also improve the role of small and medium enterprises in intra-ASEAN trade, especially exporters who would benefit from improvement of patent systems. The objective was to increase circulation of time for processing patent applications and qualities of finding and examination of reports between intellectual property offices in ASEAN.

An applicant who submitted a patent application for an innovation to two or more ASEAN intellectual property offices may forward the examination report of one intellectual property office which has completed examination to another intellectual property office to be used as a reference in their examination.

The examiners of the other intellectual property office will not perform a whole examination process. This is a temporary project of the ASEAN intellectual property office to increase efficiency and to prevent too many applications to be handled. This project does not require change of the existing regulations and approvals on diplomatic documents. The finding of one intellectual property office does not affect the finding of another intellectual property office.
ASPEC was initiated by Singapore in 2008 in the 30th meeting of ASEAN Working Group on Intellectual Property Cooperation (AWGIPC) in Hoi An, Vietnam and included participation of intellectual property offices of Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam. Brunei Darussalam will participate soon after implementation of its Patent Law.

Scope of Stock Transactions Reporting to be Expanded

Supervisory Board of the Stock Exchange and Financial Institution [BAPEPAM-LK] expanded scope of reporting obligation of stock transaction including the acceleration and timing. This regulation was expected by the stockholders community to provide adequate information on the actual condition of stock exchange whereby the public might access the information of the transactions through the acceptor of the report. The points regulated in the transaction report were among others:

1. The stock whose transaction needed to be reported to the Supervisory Board of Investments [BAPEPAM] were not just bonds but also bonds like SUKUK, state bonds, and others stocks decided by the Chairman of BAPEPAM and Board of Consumers.

2. To add the type of stock to be reported including transfers due to merging, acquisition or taking over, buy back, transfer of stock in the settlements, pension plans at the stock exchange, conversion to other stocks, stock guarantee, and other transactions to be decided by the chairman of the BAPEPAM and Consumers Board [LK].

3. In principle the parties who were obliged to report stock transaction regulated hereby to the BAPEPAM-LK through acceptor of stock transaction were any capital owners making transactions.

ASEAN and South Korea to Benefit from Free-Trading Soonest

ASEAN leaders and the Republic of Korea would meet at the Jeju island, South Korea in June 1 and 2, 2009 in a summit to commemorate 20th anniversary of trade relations between ASEAN and ROK, this was stated by the Secretariat of ASEAN as obtained by Business News by E-mail Friday [29/15].

This meeting, under the theme of Partnership to be Materialized and Friendship for Good Cause, was hoped to give the opportunity to the leaders to review the dialogue link while finding ways to foster cooperations in politics, security, economy, finance and socio cultural matters this meeting would also discuss the present global recession and find ways for solutions.

ASEAN-ROK Commemorative Summit was held every six months before ASEAN-ROK realized The Free Trade Asean in January 1, 2010, ASEAN products exported to ROK would benefit from free maintenance because ASEAN and ROK abolished import duties to around 90% of products traded with ASEAN nations. Korea’s export to ASEAN, particularly 6 ASEAN states: Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand, also benefit from free maintenance 90% of the products from these states to ROK. With the realization of ROK-ASEAN Free Trade Area in 2010, consumers in ASEAN and ROK would have access to low cost products originating from the Free Trade Zone.

With application of ASEAN-ROK Trade Agreement in May 2009, economic cooperation between ASEAN and ROK could be enhanced to higher level, such as by expanding prefensial trading to services business, which were regarded as the important elements of production and distribution of goods. By this agreement, access to the market and maintenance status were applicable for both ASEAN states and ROK.

Among the highlights at the Commemorative Summit were signing of Investment Agreement under the comprehensive Economic Cooperation between the Governments of ASEAN states and ROK by the Minister of Economy of ASEAN and ROK. Signing of the Investment agreement enabled transparent, liberal, and facilitative governments, reflecting the strength of ASEAN and ROK, to build a strong and comprehensive partnership encompassing goods, services and investments fulfilling the mandate governed by ASEAN-ROK Framework Agreement on Comprehensive until 5 years after signing of this agreement in 2005.

Other documents which were waiting to be signed by the leaders of ASEAN states and president Lee Myung Bak at the ASEAN-ROK Commemorative Summit was the joint statement ASEAN-ROK Commemorative Summit.

In relation to the Summit, there would be an ASEAN-ROK CEO Summit on May 31 till June 1, together with Green Growth and Green Asia Exhibition on June 2.

Law Proposal on Exclusive Economic Zone to Refer to the Law of Regional Authority

Chairman of the special Committee on law Proposal on Exclusive Economic Zone, Irmadi Lubis stated, that the Parliament would not set any requirement which would hindrance the establishment of Free Economic Zone. This law should refer to the law of Regional Authority which should not be eroded by the new law. This was a disclosed after a meeting with the Governor of Bengkulu, Agustrin.

This law proposal would soon become more attractive whereby to attract domestic and overseas investors. Never let it happen than this law was passed without attracting investors. This law proposal was similar to the Bonded Warehouse concept. Therefore, all stock holders could give some input to the law proposal so that investors could be drawn.

Majority of the Special of Economic Exclusive Zone [KEK] highly appreciated the courage of the Governor of Bengkulu Agusrin in driving the Province of Bengkulu to become a Free Economic Zone. The Governor of Benkulu Agusrin urged the Parliament to set up the Province of Bengkulu as Free Trade Zone.

Aguarin stated that he would set up an integrated team to lobby the Minister of Trade to make Bengkulu a center of the world trade, relying on commodities like rubber and coal. According to the Parliament, the Province of Bengkulu was one of the provinces to be prioritized as exclusive economic zone. There were three locations which would be the heartbeat of the exclusive zone, i.e. the Pulai Baai harbour, the Linau Bintuhan Harbour and the Engano. Even without the exclusive zone project, the Government of Bengkulu would continue to build the Pulau Baai harbour, the Linau harbour and the railway. A contract had been signed with the PT Batu Bara Bukit Asam to transport coal by train to Pulau Baai Harbour for exporting.

Investments in Alternative Energy to be Strongly Enhanced

John Busby, Energy Analyst of G-8 Forum, Saturday [30/5] informed Business News on the result of the Energy Minister of the G-8 Meeting which called for a joint strategic step to free the world from desperate dependency on energy resources, especially crude oil [fossil fuel]. “The worlds saw the price of oil had soared through around USD 147 per barrel in June 2008. The result : nearly all of the pillars of the world’s system crumbled down. Prices of food skyrocketed flaring widespread fear of a global food crisis. Such condition should never happen again in the future. Our responsibility for the next generation should be pondered from now on”.

Members of the G-8 were Canada, France, Germany, Italy, Japan, Russia, England and the USA. According to IMF data the skyrocketing oil price had driven prices of all commodities in the world to a fearful level.

“An unusual trend, where oil price broke through the USD 147 per barrel was definitely a nightmarish experience which should never happen again in the future. If oil producing states might arrive a t a consensus to set a price at reasonable level, probably at the range of USD 70 to USD 80 per barrel, it would be tolerable to the world. But to be above USD 100 per barrel, learning from experience, or more over USD 147 per barrel would force the world to turn to alternative energies as solutions”.

Graphics showed that the trend of increase in fuel could drag prices of other commodities. The most worrying was the price of food which might trigger food crisis in many poor countries.

“Research in technology to invent alternative energy all over the world had made remarkable achievements but has not reached the favourable economic value comparable to the fossil fuel which were relatively still ‘cheap’. But if a nation like Brazil managed to escape from dependency on crude oil why could not other nations which had equal agricultural strength do the same? Probably the reason was lack of fund to develop biofuel. So the G-8 agreed to find ways to find the fund to develop alternative energy. It was also agreed to extract biofuel not from the kind of plantations for human food or animal feed. A global commitment was needed for this led by G-8 as pioneer. If only G-8 could step up the use of biofuel significantly, automatically the bargaining position of crude oil would no longer be as strong, hence oil price could be stabilized”.

Friday, 12 June 2009

Pertamina bid announcement: Consultants for LNG Receiving Terminal

Through the Embassy of the Kingdom of the Netherlands, PT Pertamina (Persero) invites Dutch consultants to participate in a feasibility study and design preparation of an LNG Receiving Terminal to be developed by a consortium consisting of Pertamina, PGN, and PLN. The planned LNG Receiving Terminal, with Floating Storage and Regasification Unit, will be located around the Jakarta bay and will be used to supply the Muara Karang and Tanjung Priok power plants, as well as to serve domestic needs.

The consortium would like to engage both foreign and domestic consultants in conducting the feasibility study and design preparation. Considering the project is relatively high risk and is new to Indonesia, the feasibility study consultant is expected to have similar experiences and is obliged to perform technology transfer.

The following is the details of the bid:
1. Preliminary information may be obtained here:
2. The Bid announcement is located here:
3. The selection procedure will begin with a pre-qualification process, whereby the companies are expected to issue Expression of Interests and provide information indicating that they are qualified to perform the services.
4. The contract is consultancy for survey, feasibility study and FEED, which are expected to commence in the 3rd quarter of 2009 for a period of 6 months.
5. Foreign consultant must associate with domestic consultant or have a representative office in Indonesia.
6. Window for registration and submission of Expression of Interest: 15 - 16 June 2009 at 08.00 up to 13.00 (local time).

For more information please email to

RI infrastructure still lagging: Survey

Infrastructure in Indonesia remains a crucial problem hampering growth, the government admitted recently in response to an assessment conducted by the Swiss-based International Institute for Management Development (IMD). In its World Competitiveness Yearbook 2009, IMD says Indonesia needs to improve its infrastructure, despite its “spectacular” performance, rising from 51st place to 42nd, overall. In terms of infrastructure, Indonesia had dropped from 51st place in 2008 to 53rd in 2009. IMD had surveyed 57 countries worldwide.
Source: PA Asia - Public Affairs and CSR from The Jakarta Post, 9 June, p. .13

Retailers threaten traditional markets

The Cirebon City Council is demanding the city administration stop issuing development permits for modern retailers, as their mushrooming presence puts the viability of traditional markets at stake. As many as 10 traditional markets are now being forced to compete with six modern retailers and numerous mini-markets throughout Cirebon. The Batam city administration is meanwhile considering putting a halt to the issuance of permits for new malls and modern shopping centers.
Source: PA Asia - Public Affairs and CSR from The Jakarta Post, 9 June, p. 9

Agriculture area is getting smaller

The degradation rate of agriculture area every year reaches 110,000 to 140,000 hectares. Such condition does not only threaten Indonesia’s food security but also causes the increasing number of poor farmers. This is the conclusion of the interviews with representatives of the Indonesian Farmers Association (HKTI), the Fishermen Contact Group (KTNA) and the Indonesian Science Institute (LIPI). Thus, they asked the next president to pay a special attention to the agriculture sector, considering that most Indonesia people depend their lives on this sector.
Source: PA Asia - Public Affairs and CSR from Investor Daily, 9 June, p.1

Utilization of renewable energy in RI long way

Despite its huge potential in renewable energy sources, Indonesia has so far only utilized a very small part of them (less than 5.7 gigawatts from the total capacity of 150 gigawatts in 2007), with high costs and uncertainty over feasibility among the main problems facing the nascent industry. The total capacity of 150 gigawatts includes hydroelectric, geothermal and biomass sources but excludes solar, wind and ocean wave energy. The Energy and Mineral Resources Ministry is researching biomass gasifications, fuel cells for power generators, bioethanol from industrial waste, geothermal reservoir and wind turbines.
Source: PA Asia - Public Affairs and CSR from The Jakarta Post, 10 June, p.15

January-April coal exports fall 22.5% on year

Coal exports dropped to 53.5 million metric tons during the first four months of the year from 69.04 million tons a year before, government data showed Tuesday, Dow Jones reported.
Despite the 22.5% drop in volume, earnings from overseas sales rose 21.6% to $3.44 billion from $2.83 billion, the Central Bureau of Statistic said.
Indonesia produced 30 million tons of coal in the first quarter, or only 67% of the target set for the period, due to heavy rains and sharply lower global prices, a government official said last month.

Friday, 5 June 2009

Property Demand to Increase by Semester II 2009

After exhaustion due to global crisis, property demand was expected to increase by semester II 2009, as indicated by lowering of BI rate and cycle of property demand which normally reached its peak in Semester II. Director of Executive Indonesia Property Watch Ali Tranghanda disclosed the matter in Jakarta Monday [25/5].

Increase of demand were highly potential in all property types. However the biggest increase would be medium to lower types of houses, medium apartments, and hotels. “BI rate [7.25%] fell but not automatically followed by downturn of mortgage – it might take two months and another three months to reach consumers’ level. All in all it would take 5 months before any acceleration was possible, probably until the second semester” he remarked.

BI rate which presently have gone down to 7.25% level had the potential to increase mortgage market share, because at every lowering of 1% interest rate, it would jack up mortgage market from 4% to 5%.

Although by semester one the property sector were sluggish, by Quarter I 2009 the property price index like Jakarta and surrounding [Jabodetabek] rose 0.42%. For lower middle 0.58 middle 0.37 and upper middle 0.3 where sales at upper middle rose by 2.29% by Quarter I 2009.

The location factor became an absolute criteria in choosing property, where investment zone become main reference. For example, the South Jakarta location, the ideal locations were those flanked by Kemang and Pondok Indah, like Ampera. Even the locations in Southern Jakarta which we re not saturated became potential locations for property investments.

Meanwhile, levels of price increase in some locations in 2008 like Puri Indah showed an upgoing price between 10% to 11% per year. Precisely Pondok Indah 5% to 6%, Kelapa Gading 11% to 13%, Serpong Tangerang 12% to 25%, and Sawangan-Pamulang 8% to 10%.

Realization of Bulog Rice Procurement Reached 2.1 Million Tons

The realization of unhusked grains/rice procurement of the Board of Logistics [Bulog] up to May 22, 2009 reached 2.1 million tons equivalent to rice. Java contributed to rice procurement numbering 1.6 million tons whilst outside Java contributed 556 thousand tons according to date of unhusked grains/rice procurement.

In Java the biggest source of rice came from East Java Divre [regional division] : 178.191,19 tons followed by Central Java Divre [443.667,57 tons] and West Java divre [347.795,05 tons] whilst in outside Java the biggest source was South Sulawesi [209.186,45 tons] followed by West Nusa Tenggara [129.040,88 tons], Lampung Divre [83.538,20 tons] and the South Sumatra Divre [67.096,77 tons].

During hearing session with Commission IV of the Parliament, President Director of Public Company [Perum] BULOG Mustafa Abubakar stated that procurement of unhusked grains and rice had begun since 2009 or sooner than previous years. In 2009, BULOG proclaimed target of unhusked grains and rice procurement amounting to 3.8 million tons equivalent of rice.

The policies ans actions taken by Perum BULOG to attain prognose of unhusked graisn and rice in 2009 were :

a. To activate Units of unhusked grains and rice processing and task force for buying farmers
b. To instruct al Divres to prioritize procurement of unhusked grains during harvest
c. To expand procurement and pipelining network
d. To step up services in all limes, operational as well as administrative
e. To maintain coordination/cooperation with all concerned parties and stakeholders
f. To classify partners

The hindrances faced in the procurement of unhusked grains and rice in 2009 were :

[i] harvesting which coincided with the rainy season while drier machines were limited.
[ii] limited warehouse spaces to increase procurement particularly in producers zones
[iii] limited rental godowns
[iv] prices of unhusked grains/rice which on the average were above Government’s Standard

purchasing price [HHP].

Minimizing Foreign Debts

Economic observer Faisal Basri exoected the Government would gradually reduce foreign debts which now was posted at Rp. 1.667 trilliion and partly used to settle old debts “In the future the Government was expected to reduce those debts by enhancing efficiency and productive management”.

Faisal admitted that all countries in the world were indebted to external resources, and it depended on the country concerned whether they could manage their money efficiently or not. “Not to mention a developing country like Indonesia, even a state as wealthy as the USA have foreign debts but their debt management were effective” According to the lecturer at the University of Indonesia, so far the Government had been borrowing money, part of which used to settle old debts.

“We do not deny the fact that the administration of President Susilo Bambang Yudhoyono borrowed money, part of which were used to settle old debts. The reason for this dependency was that the natural resources were not as yet fully tapped. It took highly expensive technology to exploit there resources, whilst the fund expected from the National budget to build infrastructures were not sufficient. Therefore the only wayout to realize all good plans were to use the loans extended from overseas recources”.

The ratio of debts against national GDP showed decline, but Indonesia’s outstandings had risen from Rp. 1.294 trilliion in 2004 to Rp. 1.667 trillion in 2009. It was reported that the debts were used to pay old debts due.

World’s Demand for Paper Still at Downturn

In North America the demand for print-paper still showed signs of notable contracting. Demand by March 2009 showed a down-turn of 22% compared to March 2008. Paper factories continued to reduce production output and only utilized fixed capacity of 78% by March 2009 or a reduction of 1.5 million tons. Ir. H. M. Mansur, Chairman of the Indonesian Pulp and Paper Association disclosed this to Business News Monday [25/5].

Lowered demand was made worse by consumers acts of reducing paper stock in the past six months. Consumers stock of paper had been reduced greatly, whereby the market was expecting price improvement in Quarter II 2009. Reduction of production was important in the effort to balance supply-demand, but the most important thing was the increase of demand, which was expected to be jacked up by advertising campaigns.

In Europe the demand for paper was a downfall, which was made worse by export downturn in Quarter I 2009 the export of print paper to Europe showed a downturn of 40% against Quarter I 2008. Europe’s market share of paper was reduced, taken over by China.

In China the production of paper and board was up by 2% in March 2009. Although domestic demand for linerboard and carton was only small, demand for print paper grew significantly. But the price of paper in the domestic market was down in April 2009, except tissue paper which remained steady.

In Japan through January-February 2009 the production of paper and board was down by 28% or 1.1 million tons compared to same period of previous year. This was one of the factories’ efforts to balance supply-demand. The decrease of car and electronic goods sales, had its impact on the lowering of coated paper which were normally used for printing catalogue and pamphlets.

The wave of closing down paper factories continued. Nippon Paper announced the plan to reduce permanently their paper production capacity to the amount of 450.000 tons/year, in addition to reducing board capacity to 135.000 tons/year. Nippon paper would also reduce temporary its output capacity by 300.000 tons/year. The Tengo packaging company closed 2 of their board-maker machines at the capacity of 220.000 tons/year. Dalo announced closing down of 2 paper maker machineries at the Mishima factory.

Oil Paper also stopped the paper machine No. 3 [M-3] in Kushiro with the capacity of 150.000 tons/year planned to stop production before September 2009. MK-1 Kushiro [capacity 90.000 tons/year Corrugation medium] and the Pulp Kushiro Unit [capacity 150.000 tons/year].

Hokuetsu [ranks 7th in Japan] announced the plan to acquire Kishu Paper [ranks 10] through equity swap which was expected to be ready by October 2009. By acquiring the company, Hokuetsu would be in the 6th position in Japan. In the acquisition program, Hokuetsu would close 3 paper factories in Nigitaga factory and Chiba, i.e. MK-1 Nigitaga [2.000 tons/year specialty] and MK-2 Chiba [18.000 tons/year uncoated woodfree] respectively. Kishu paper would also close MK-2 and MK-3 in Osaka factory [total capacity 40.000 tons/year specially].

Advertising Expenditure at Downturn
Globally the reduction of advertising expenditure would continue in 2009, would plunge down again by 2010 a downturn of 4.4% in 2009 to a downturn of 6.8% in 2010. This recession in advertising in 2009/2010 would be worse than predicted. Switching of advertisements from print media to online media continued to go on. In the USA around 525 magazines were closed in 2008, and 89 magazines were closed through January 2009. Although some new magazines emerged, on-line advertising developed notably. In the USA expenditures for magazines was down by 16% in 2009 and would continue to decline in 2010. The same trend also happened in Europe.

State-Owned Enterprises Ready to Synergize in The Procurement of Main Equipments of Defence System

Secretary to the Minister of State-Owned Enterprise [BUMN] Said Dudu, assured that his office were ready to synergize state-owned enterprises for procuring main defence system equipments [Alutista] in the aspects of technology as well as in funding.

“BUMN like Pindad [arms and weapon industry] and PT Krakatau Steel have excellent technology, while state-owned [BUMN] have the fund to finance the projects”, he stated to the press in Jakarta Friday [22/5].

However, according to Said, the process of procurement was still hindranced by problems of government loan, because BUMN banks were not in a position to extend loan without guarantee, as required by Bank Indonesia regulations.

So far he had been doing a lot of negotiations with the Department of Defence on the procurements of Alutista, still the guarantee was not included in the State Budget [APBN] “If they were imported arms the APBN would gladly guarantee. And yet domestic purchases were not only less expensive, but also competitive in terms of quality” Said remarked, while saying that Krakatau Steel and Pindad had built tanks at half the price offered by overseas producers.

IOSA Certificate, Pre-requirement for Flying to Uni Europe

National and international airlines planning to fly to Uni Europe zones would have to meet new standard of requirements, i.e. to obtain an international standard certificate from the IATA [International Air Transport Association] and Operational Certificate or IOSA. The requirements were made to select entries of foreign airline companies to Uni Europe.

According to the Director General of Air Transportation, the requirements include mandatory rule for foreign airlines flying to UE zone to equip their crew with international certificate and certificate from local authorities. In addition to that foreign airlines must obtain certificate from the IATA or IATA Operation Audit [IOSA] – although it was not explicitly mentioned that in spite of having passed the IOSA, qualification, the final decision was still in the hands of UE.

Obviously the new regulation would make it difficult for national airlines to fly into UE zones. All of the application of the said rules would be selected by EASA as authority of civil aviation of Europe which represented 27 member states of UE.

All these qualifications posed as a problem to national airlines because internal safety control was admittedly still not strict enough, so it often occurred that many aircrafts in operation were not in top safety condition, inferiorities and inadequacy were often tolerated here and there which would certainly ignore passengers safety.

To illustrate, this was experienced by BUMN airlines, Garuda Indonesia who wished to open an air route to Amsterdam must obtain landing permit from the civil aviation authority of the Netherlands. In addition to that, Garuda were required to apply to EASA as aviation authority of Europe who would authorize on behalf of UE member states.

The new requirements set forth by UE would be effective by April 2012, therefore national airlines like Garuda still had the time to use the period of transition to obtain landing permit based on the old regulation. The same applied to other national airlines who planned to fly into UE zones, might benefit from the old rule. Meanwhile UE within the near future would announce the names of national airlines which would be excluded from the list of flight prohibition, by June 2009.
Meanwhile Garuda Indonesia was ready to start a flight to Amsterdam, as soon as the UE restrictions were withdrawn. Although it would take only 1 to 2 months to prepare for flying to Amsterdam, Garuda might take time to use A330-20 to cover Jakarta-Amsterdam with stopoverin Dubai in Uni Emirate Arab. In this very year 2009 Garuda would add to its fleet four Airbus 330-20 to carry out international flight routes to Tokyo, Seoul, and Sydney.

As Per May 18 Sugar Distribution of PT PN to be Managed by Bulog Again

As per May 18, 200, sugar distribution by PT Perkebunan Nusantara and PT Rajawali Nusindo [RNI] would once again be managed by The Board of Logistics [BULOG] after yesterday Monday [18/5] contract agreement were signed in Surabaya designating BULOG as distributing agent for sugar commodity.

According to the Director of Prum BULOG Mustafa Abubakar amidst the National Seminar entitled “To drive the Sabang region according it its status” Tuesday [19/5] in Jakarta, this cooperation were follow up of distribution task during October-December 2008 for 250 thousand tons of sugar of PTPN and RNI.

Of six PTPN i.e. PTPN II, VII, XI, X, XI, and XIV and PT RNI were sure that this collaboration were rated as being positive, and BULOG has been asked to act as distributor agent for their products which was estimated at + 600 thousand tons. By this cooperation, according to Mustafa, sugar cane farmers had the choice : to join the program with PTPN and RNI who were distributing through BULOG or not.

“Presently the average selling price of white sugar were above Rp. 8.000/kg. With this collaboration the Government expected that the price would be pressed down to Rp. 7.000/kg there by to maintain efficiency at distribution level and which would help the distribution chain, making the selling price more profitable but attractive”. Mustafa remarked.

Further he added, with this binding collaboration BULOG would be entitled to received distribution fee of 1.5% of the selling price minus value added tax which was estimated at around Rp. 60/kg.

This mechanism still depended on when the sugarcane would enter the mill, because presently the procedure was still at preparatory stage and would not be effective until June 09.

Frying Oil to Follow Soon
At the same opportunity Mustafa also explained that he had forwarded the proposal for frying oil distribution which was based on distribution, and the system channeled rice for the poor people [Rice for the poor] “Through the State Ministry od State-owned enterprise BUMN we have tried to act through related association as distributor of frying oil.

For that BULOG benefited from the channel which had been used for distributing rice for the poor, but in the case of frying oil Minyakita brand oil there were two possibilities : to use the existing BULOG distribution mechanism, or to designate BULOG to act as stabilizer of frying oil price.
However, to undertake the task BULOG must have reserved frying oils owned by the Government whereby their would be fund from the National Budget to ensure stock for subsidy assignments. For that the matter were being discussed by the Minister of BUMN, Department of Industry, and BULOG “as state owned enterprise, BULOG was ready to do any task assigneds by the government” Mustafa further remarked.

Jagorawi Toll Road has The Right to Adjust Tariff Based on 40 Year Concession Period

About 13 sections of toll roads would impose tariff increase as per next August. Among the sections to have tariff increase was the Jagorawi Section managed by PT Jasa Marga [Persero] Tbk. Nurdin Manurung, Head of the Board of Toll Road Management [BPPJT] disclosed the matter to Business News. Although the Jagorawi toll road has by accounting attained the break-even point, the concession period which was 40 years still permitted the company to impose price adjustments.

The 40 year concession period was obtained due to bundling on 13 toll sections managed by PT Jasa Marga, i.e. Jagorawi Toll, Semarang secion A, B, C, Jakarta-Tangerang, Jalan Prof. Dr. Sediyatmo, Surabaya-Gempol, Belmere Toll, Jakarta-Cikampek, Cawang-Tomang, Outer Ring Road, [JORR], Section E-2 [Cikunir-Cakung], Padalarang-Cileunji Toll, Tomang-Grogol-Pluit, Palimanna Lumbon-Kanci, Pondok Aren-Bintaro [Viaduct Ulujami].

Jasa Marga obtained concession period up to 40 years, that was because the State-Owned company operated 4 toll road sections which needed subsidy from other sections. The 4 toll roads needing subsidy were Semarang toll section A, B, C and Balmera toll. This was because the daily traffic in the said sections were still low, meaning it required longer time to attain break-even point. “Therefore, when being in charge as operator and regulator, Jasa Marga was signed by the Government to build toll roads with low financial feasibility, which implied that the operations of those “thin” sections needed subsidy from the “thick” section the way it was applied to the Jakarta-Cikampek and Jagorawi toll”.
The tariff increase of toll road were regulated in the Law no. 38 year 2004 on toll road management, where tariff adjustments were automatically done every 2 years the magnitude of which were in accordance with the inflation level within that period.

The Tangerang-Merak Toll Tariff to increase by 55%
All the 15 toll roads which would have tariff increase-apart from the section owned by PT Jasa Marga – were the roads owned by PT Marga Mandala Sakti who managed the Trangerang-Merak toll. This toll section would impose tariff adjustment of 55% to become Rp. 18,000 for vehicles of type I category. The tariff increase were the highest compared to other sections which had tariff increase of between 12% to 15%. This was because PT MSS had made re-investments worth Rp. 3.5 trillion road repairs and road widening along 72.5 km.

If Crude Oil Price Soared Above USD 60 Per Barrel National Budget 2009 Would be Revised

The Government would make revisions on the State’s Income and Expenditure Budgeting [APBN] if the world’s price of oil soared above USD 60 per barrel. “Revision on the State Budget must be exercised if oil price goes above USD 60 per barrel, because the present assumption was only USD 40 per barrel. “This was stated by the State Minister on National Planning & Development/Head of National Planning Board Paskah Suzetta Tuesday [19/5].

Paskah reminded that based discussions with the Parliament, revision of the state budget would be exercised if changes occurred in three main factors. “The three main factors were up turn of the world’s oil price above USD 60 per barrel, downturn of economic growth and the exchange rate of the Rupiah against the USD. The economic growth had lowered whilst the world’s oil price tends to move upward, although it was hard to predict to what level the price would upward, although it was hard to predict to what level the price would increase. The Rupiah weakening seems not too significant, because I am of opinion that the weakening is only regional”. On the assumption of the benchmark of the revised national budget, Paskah assumes at the level of Rp. 10.000 per USD whilst oil price was assumed to be USD 60 per barrel.

A Good Number of CEO Would be Sacked

Mark Adam, Media Relations World Economic Forum [WEF] on Tuesday [19/5] informed Business News on the prediction of Chief Executive Officer [CEO] in giant multi-national companies, especially those based in the USA, would be sacked. “This prediction alone becomes a positive precedence toward a newly established management system of the world which was part of the G-8 and G-20 commitments. There has been positive perceptions voiced all over the world, if the wisdom of releasing the ‘problematic’ CEO is a necessity to better to situation”.

The US Government, after having completed the “Stress Test” program which thoroughly analyzed a number of banks and followed up with dissecting several companies which were being bailed-out by the US Government – finally decided to get rid of some “problematic” CEO who were regarded as being accountable for the setbacks amidst the global financial turbulence throughout history in terms of loss.

“The moment it was known to cast aside the problematic CEO, positive responses come from the global market. This American plan was probably exemplary because somehow the incapable CEO accounted for the bad report card of companies. If-generally speaking there were companies who managed to survive, or maybe some of them still made profit, the loopholes of the masterplan were still to be blamed on CEO as strategy planners. Therefore with the determination and firmness of the US Government under Barrack Obama, hopefully the jargons of the new system were more than just a commitment but firm actions to be taken immediately”.

An example of one of the most phenomenal kick-out was how Barrack Obama rejected the plan to rescue General Motors [GM] if Rick Wagoner still sat as CEO at GM. In the coming weeks it was predicted that more CEO would be sacked in times of this adverse conditions.

The Anchor Zone
According to WEF, after turbulence subsided, it would soon be visible how the Asian region proved to be the Anchor zone in the process of global recovery. “China, India and Indonesia would soon be recorded in history as nations which remained to grow amidst the terrible turbulence. On May 18 to June 19 the WEF convention would be held in South Korea to review the Asian region in particular and the effective recovery strategy to be exercised by Asia. Now the Western society must learn a lot from what was being done by Asia”.

Beside the said event, another convention would take place in New Delhi India Economic Summit to explore the potentials i.e. how India and China with their vast population were able to distinctively grow amidst the world’s un-condusive climate. Of the two events, it was expected to draw some conclusion toward building a stronger, more resistant order.

Economic Indicators Show Positive Signs

Nearly all economic indicators were showing signs of recovery. The stockmarket index continued to accelerate, Rupiah were strengthening, foreign reserves increasing, inflation under control, while economic growth were safequarded. All these indicators were the underlying factors of a fast economic growth. If the presidential election next July goes well, it was most convincing that national economic growth would be faster as per Quarter IV 2009. Such was concluded by some national economic observers.

Indonesia’s stockmarket railed on and was closed yesterday at 1,851.3 up by 37% since end of January 2008. The Rupiah exchange rate remained firm at Rp. 10.324 per USD or 5.72% stronger compared to end of 2008. Foreign reserves was posted at USD 56.6 billion, an increase of USD 5 billion against December 2008. Inflation was well guarded at low of 0.05% in the first four months of 2009. Economic growth had been well secured.

In addition to that, external confidence were building up as indicated by strong inflow of foreign capital. Foreign ownership over state bonds [SBN] was posted at USD 85.7 billion. The position of foreign net buying at stock portfolio since March until closing on Friday [16/5] was chalked up at USD 5.9 billion.

The Bottom Line Passed Already?
With these notable corrections of the economic indicators on the overall, were these signals that the lowest level of economic were already passed? Economists felt sure that the crucial points had passed as rays of hope were seen at the exit end of tunnel. Economists predicted that growth would be faster after the presidential election.

Contrary to the analysis projections, businesspeople were more cautious and choose to be prudent in responding to the positive signs, not just at home in Indonesia but also in some major states of the world. Both the Government and businesspeople were careful in embarking on Quarter II and Quarter III which were perceived as the deepest level of crisis. Therefore, the Government and private sector should strive shoulder to shoulder to succeed.

Meanwhile the general perception of foreign experts was that the gravest phase had passed the world was embarking on an era of recovery, although we should be well aware that the critical circumstance was still overshadowing the world’s economy, with the risk of slipping back in to square one. What was being awaited was the well established order of the world’s economy could be rebuilt in the Western world, upon which the rest of the world tend to lean on.

Law Proposal on Halal Guarantee of Products Would Strengthen Competitive Edge of National Pharmaceutical and Cosmetic Products

Law proposal on Halal [religiously permitted] guarantee of products was hoped to strengthen competitiveness of pharmaceutical and cosmetic products amidst the tide of pharmaceutical and cosmetic products from China, India, and other states which were competitively cheaper but very doubtful of their halal-ness. This hope was expressed by PT Kimia Farma, PT Kalbe Farma, and PT Mustika Ratu in a general hearing session with Commission VIII of Parliament where inputs was heard for the evaluation of the Law proposal of the JPH Law as led by the Vice Chairman of Commission VIII of Parliament, Abdul Hakam Naja at the Parliament hall.

In the said opportunity, PT Kimia Darma, PT Kalbe Harma and PT Mustika Ratu hoped the JPH Law Proposal, which was intended to protect the consumers using pharmaceutical and cosmetics be voluntary instead of mandatory because if the rule were compulsory it would increase production cost and pose technical difficulties in the labeling process.

The labeling of product information pharmaceutical and cosmetics products was based on the need to protect the consumers by informing them the compounds of the products including the halal state of the product – but the obligation to put the halal information should not increase production cost which could bring a burden to producers. In case of additional production cost, producers would have to add the extra cost on the product price which in the end would burden the consumers.

Besides, the producers demanded for protection of their rights of secrecy of the formula as part of the patented rights which were legally protected, which must be made transparent to the auditor of halal examiner in the process of halal certification. The JPH Law Proposal need to prudently and permissively accommodate products made of blood and enzyme components, products that were 90% or more chemical, or those only slightly containing biological compound. It was notable that the Meningistis vaccine was only an initial element to make the basic compound which contain pig elements and had no substitute. Before any substitute were discovered, such cases might be regarded as a state of emergency because no vaccine of the same efficacy but contained no pig element, were known.

Of the solvent liquid in medicines in the market, only a small portion contained alcohol, however there were still a good number of chemicals for medicines which could only be diluted with alcohol. Today many blank capsule cases were made of gelatine derived from fish shells or plantations.
In halal labeling, it was necessary to involve the Directorate of Medicines and Food [DITPOM] of the Ministry of Health who were in possession of comprehensive rules, so that over-regulation could be prevented. And it was proposed that the validity of the halal registration be set for 5 years.

Minister of State-Owned Enterprise urged to Settle Senamanenek Land Dispute with PT PN V

The Commission IV of House of Parliament urged Minister of State-Owned Enterprise to explain the case of land dispute of Senamanenek with PT PN IV. Before that Deputy of the State Minister of State-Owned Enterprises Agus Pakpaha, President Director of PT PN Irwan Djuned, Office of Kampar Plantation of the Riau Province, Community figures and Village Chief Alwi Arifin had signed Job Assignment Document [SKP] for Evaluating Asset on land covering 2,800 Ha. This was disclosed at the Technical Meeting of Commission IV of Parliament with Minister of State Owned Enterprise Sofyan Djalil led by Vice Chairman of Commission Muhidin M Said at the meeting room of Commission IV of Parliament.

The same matter was disclosed by Muhammad Tonas, who saw that the case had remained unsettled for two years. According to Tonas, the Senamanenek land was not owned by PT PN V and this was confirmed by a letter of the National Land Board [BPN] This was necessary to be explained by State Minister of BUMN whereby to settle the dispute properly. Efforts of settlement had been endeavored to the maximum by all parties but transfer of authority of the land/Ulayat land covering 2,800 ha had never been realized up till now.

Meanwhile member of Commission VI of Parliament Chairul Anwar Lubis confirmed that the Senamanenek land had been taken over by PTPN V. He urged State Minister of BUMN to explain the matter which had remained unsettled for 2 years by the State Minister of BUMN.

Responding to that case, State Minister BUMN Sofyan Djalil explained that the State Ministry of BUMN had been very serious about settling the Senamanenek land dispute. According to Djalil the problematic thing was the status of Utility Rights [HGU] because the land had been regarded as asset of PT PN V. He elaborated that to exclude a state asset from the Government’s document in order to release it to the public called for a certain procedure, but because the procedure had not been applicable he would write a letter to the court to ask for an official declaration, or the National Land Board would make the declaration.

Indonesia’s Economy Grew by 4.4% in Quarter One 2009

The Central Board of Statistics disclosed on Friday [15/5] that Indonesia’s economic growth reached 4.4% in Quarter I of 2009, against growth of the same period in 2008.

Head of the Board of Statistics Rusman Heriawan disclosing the matter in a press conference said that growth was happening in all sectors. The growth, sector wise was in the following order : transportation-communication up by 16.7%, electricity, gas and clean water 11.4% services 6.8%, construction 6.3%, finance/real estate/company services 6.3%, agriculture 4.8%, minery and excavations 2.2%, processing industry 1.6% and trading/hotel-restaurant 0.6%.

GDP minus oil-gas chain-wise at Quarter I 2009 compared to same Quarter in the previous year [Y-on-Y] grew by 4.8%.

In Quarter I 2009, the economic sector playing at the biggest role was the industrial processing sector 27.3%, followed by agricultural sector 15.8%, trading-hotel-restaurant 13.4%, services sector 10,0% and the industrial sector 9.6%. As a whole, the five sectors had a share of growth of 76.1% in GDP. Meanwhile the role of 4 other sectors had a share of less than 9% respectively. Meanwhile the role of all economic sectors minus oil-gas by Quarter I was posted at 92.9%.

The agriculture, electricity and gas-clean water, construction, and services sector played an increasing role in Quarter I 2009 against Quarter I and Quarter IV 2008. Meanwhile the minery and excavation sector and trading-hotel-restaurant showed a downturn in Quarter I 2009 compared to Quarter I of 2008 and Quarter IV 2008. Particularly the processing and transportation communication surprisingly showed an upturn in Quarter I 2009 compared to Quarter I 2008.

By utility or demand, Indonesia’s GDP was influenced by various factors like demand, i.e. in household expenditures, government consumptive expenditures and or capital injection for physical investment and export-import.

Expenditure for household consumption based on effective price which was the biggest contributors, i.e. 62.2% [Quarter I 2009] showed a minor downturn. The same downturn was shown in government consumptive expenditures and export-import.

Indonesia’s economic structure in Quarter I 2009 was in particular dominated by the provinces in Java which contributed to the GDP 58.3%, followed by Sumatra 23.4%, Kalimantan 9.4%, Sulawesi 4.3% and the remaining 4.6% was shared by other islands.

In java, the biggest contributor to GDP was Jakarta [16.5%], East Java [15.3%], West Java [14.4%] and Central Java [8.4%].

In Sumatera, three provinces which were the biggest contributors were Riau [6.9%], North Sumatra [5.2%] and South Sumatra [2.8%].

The biggest contributing province in Kalimantan were East Kalimantan 6.4% whilst the biggest contributor in Sulawesi island was South Sulawesi Province 2.1%.

Obtaining new investments

The Marunda Industrial Bonded Zone will be converted into a special economic zone for industries with high added values. According to the President Director of Marunda Bonded Zone (PT KBN Marunda), Raharjo Arjosiswoyo, the services in the special economic zone will be more advanced than other industrial zones including Batam. Moreover, the global financial crisis seems to have a small effect to the growth of tenants. In 2008, the total exports of the investors from Marunda still showed a high trend, namely US$ 888.4 million.
Source: PA Asia - Public Affairs and CSR from Bisnis Indonesia, 29 May, p.m1

Rp 408 billion for clean water network

The Regional Drinking Water Company (PDAM) of Subang Regency branch claimed that it required Rp 408 billion to improve its water network in order to reach the Millennium Development Goal by 2013. Fourteen percent of Subang people, or around 1.2 million people, still have no access to clean drinking water. It is because of limitations in the pipe networks, says the PDAM Subang director, Suryana yesterday.
Source: PA Asia - Public Affairs and CSR from Koran Tempo,1 June, p.A9

Indonesia has recovered, but still fragile

Indonesia’s economy has entered the initial stage of recovery after being hit by the global economic crisis. During the first quarter of 2009, the economic growth reached 4.37%. However, Finance Minister Sri Mulyani said the domestic economy is still fragile since the level of trust from the business sector is not strong yet. Meanwhile, DBS Group predicted that Indonesia’s economic growth will slow down from 6.1% in 2008 to 4.3% in 2009, although the country is still better than some other countries in Southeast Asia.
Source: PA Asia - Public Affairs and CSR from Kompas, 29 May, p.17

2010 state budget target ‘realistic’

The government has proposed the 2010 state budget, based on higher growth assumptions which need to be endorsed fairly soon, as the current government and lawmakers end their term in September. Aiming to achieve 5 percent to 6 percent growth next year, Finance Minister Sri Mulyani Indrawati said the target might not be achieved if the global economic recovery took longer than expected, the rupiah weakened against the US dollar or commodity prices soared.
Source: PA Asia - Public Affairs and CSR from The Jakarta Post, 2 June, p.15

The Dutch is ready to provide battleship assistance

The Deputy Speaker of the House of Representatives (DPR) Muhaimin Iskandar said the Dutch government is studying the possibility of providing assistance the defense sector, including battleship. Yesterday, he received the Dutch senate speaker, Yvonne E.M.A.Timmerman Buck at the DPR building. The DPR, he added, conveyed to her that Indonesia urgently needs to borrow battleships to protect its territory and sea explorations. Moreover, the DPR also asked the Dutch to provide technology-transfer assistance in shipbuilding. The Dutch senate, according to Muhaimin, welcomed the idea and promised to have further internal discussion within the government.
Source: PA Asia - Public Affairs and CSR from Koran Tempo, 4 June, p.A6