Monday, 27 July 2009

Capital Market Law draft near completion: Bapepam

The Capital Market and Financial Institution Supervisory Agency (Bapepam-LK) has almost finalized its draft of a bill to amend the 1995 Capital Markets Law, which is to be submitted to the House of Representatives for deliberation, The Jakarta Globe reported.
“The revisions are 90% ready,” Bapepam chairman Fuad Rachmany said on Tuesday. The issues covered include demutualization and immunity for regulators for actions undertaken in the course of their duties. The amendments are needed to allow the demutualization of the Indonesia Stock Exchange (IDX) to go ahead, a key step forward in the bourse’s plans to go public. As per the current legislation, the IDX is owned by 119 securities houses, each of which has an equal voting right.
The demutualization plan would allow the exchange to raise funds from the public to press ahead with its modernization program and help expand the domestic capital market, and is in line with the trend among bourses around the world. The proposed amendments would provide immunity from legal action for regulators with respect to bona fide actions taken in the course of their work.
“Immunity does not mean we’re above the law, but it will make our job much easier,” Rachmany said, adding that the measure would significantly ease the agency’s investigative process.
Regarding the establishment of a proposed financial services authority to take over the regulatory powers of Bapepam and the central bank, part of the package of bills to be submitted to the new House, Rachmany said more work was needed.
Source: Indonesia Trade & Inv News-21 July 2009

Ministry May Sink Fishing Concession Scheme

The Maritime Affairs and Fisheries Ministry appears to have rowed back on a controversial fishing concession scheme that critics say will result in traditional fishermen being forced to tie up their boats. The scheme, referred to locally as the “cluster system” and originally scheduled for introduction in January, envisaged large-scale fishing companies being awarded exclusive 30-year rights to manage fishing grounds based on tenders. “We will not put the regulation into effect in 2010. We are now gathering input and suggestions from all stakeholders, including fisheries experts, before taking any action,” Minister Freddy Numberi said on Wednesday. Freddy said the idea of introducing the concession was the result of rampant overfishing in many parts of the country. Indonesia has about 11 major fishing grounds, with more than 50 percent of these suffering from overexploitation, he added. The ministry took the view that the best way to prevent this would be to make individual companies responsible for managing their own areas, which would also facilitate monitoring by the ministry. The introduction of a concession scheme is provided for by a 2008 ministry regulation on fisheries management. However, fears have been expressed in many quarters over any such scheme’s potentially adverse consequences for traditional fishermen. Freddy acknowledged that if the scheme was introduced and licences granted to big fishing companies, it would be difficult to withdraw these, even if conflicts developed with traditional fishermen. “We’re not going to rush into making a decision,” Freddy said. “We need to see whether such a system is capable of accommodating traditional fishing communities.” Riza Damanik from the Fisheries Justice Coalition (Kiara), a nongovernmental organization concerned with the rights of traditional fisherfolk, had earlier urged the government to jettison its plan to grant concessions, arguing that these would only benefit big companies. “We can see just how arrogant the central government is in thinking that it can sell fisheries assets to private companies while denying the rights of traditional fishermen,” he said on Tuesday. “Therefore, we would seriously urge the government to withdraw the [2008] regulation as it has the potential to trigger conflict between traditional fishermen and the concessionaires.” He added that the new scheme would force out traditional fishermen from their livelihoods.
Source: Jakarta Globe, 23 July 09, p. section B

Kadin: Business Community Positive After Jakarta Bombings

Despite the large number of businesspeople including expatriates present when bombs went off in two Jakarta hotels on Friday, the Indonesian Chamber of Commerce and Industry said on Tuesday that it did not believe their presence was the inspiration for the attacks. Mohamad S. Hidayat, the chairman of the chamber, also known as Kadin, said he wanted to stress that we “do not think the group of executive businesspeople meeting on Friday [at one of the hotels] were targeted” by the terrorists. “What was targeted on Friday morning was an international hotel frequented by all types of people, from all sorts of nations and races.” Hidayat also told a news conference that “after Friday’s bombings we were immediately in contact with a number of chambers of commerce overseas and their reactions [toward Indonesia] remain positive.” “We didn’t try to force our views on them,” he said. “We listened to them and allowed them to express what they think, and what we are conveying today are their views.” Jakarta Governor Fauzi Bowo told the same news conference that there were no indications of any long-term impacts on the economy from the attacks. “There will be a bit of turbulence in the tourism sector, but I am confident it will not be for long,” Fauzi said.
Source: Jakarta Globe, 22 July 09, p. section A3

Bombings have little impact on economy: Analysts

The latest bombings at the Ritz Carlton and JW Marriott hotels in Jakarta that killed at least nine people will have little impact on the country's economic recovery, analysts said on Friday, Channel News Asia reported.
While the blasts may hurt investor confidence in the short run, market observers noted that the longer term view is still bullish as fundamentals are in place for growth.
This includes surprise GDP growth in the first quarter of 2009, a positive outlook by ratings agencies on its sovereign rating, and an investor-friendly outcome from recent elections. The positive outlook assigned by Moody's Investors Service on Indonesia's credit ratings remains intact, said Aninda Mitra, Moody's primary analyst for Indonesia. "I find it very hard to see a wider or deeper impact on overall political stability or even on the economic outlook," said Aninda Mitra, Moody's primary analyst for Indonesia.
“I don't think that really changes anything. These kinds of incidents can and have happened anywhere so there's nothing unique about Jakarta or Indonesia,” said James McCormack, head of Asian sovereign ratings at Fitch. “It's not going to change our view on credit fundamentals or political stability or any of those issues,” he said.
“Terrorist threats in Indonesia are nothing new,” said Johanna Chua, head of Asian economic research at Citigroup Inc. in Hong Kong. “The economic impact will likely be limited.”
“While tourism and general retail and travel-related activities could be affected by the latest events, we expect the impact to be temporary,” said Chua.
Accor SA, Europe’s biggest hotelier and operator of 37 hotels in Indonesia, said it will push through with plans to develop 15 locations in the country, Bloomberg reported.
The Paris-based company, which has 11 hotels in Jakarta, “remains committed to Indonesia,” Gerard Guillouet, vice president for Accor operations in Malaysia, Indonesia and Singapore, said in an e-mailed statement. “Global factors are still in favor of Indonesia,” said Fauzi Ichsan, senior economist at Standard Chartered Plc in Jakarta. The economy is “fundamentally strong,” he said.
“Global factors are still in favor of Indonesia: pessimism over the US economy is receding, encouraging global investors to re-enter emerging markets, including Indonesia," Standard Chartered economist Eric Sugandi told Dow Jones Newswires.
The rupiah declined the most in two weeks and hotel stocks slumped after bombings. The rupiah slid 0.6% to close the day on Friday at Rp10,185 to the US dollar, compared to the close of 10,190 a week earlier. The currency reached 10,075 on Thursday.
Commenting on the potential for further weakness in the rupiah, Peter Redward, head of emerging Asia research at Barclays Plc in Singapore, said Bank Indonesia is in a strong position to support the market in the event of any slide. On the stock market, the Jakarta Composite Index lost 0.55% to 2,106.35, compared to 2,063.09 a week earlier.
"Obviously the blasts today have dragged down the index. The markets in the region have gone up," Ciptadana Securities analyst Syaiful Adrian told Agence France-Presse.
The cost of protecting Indonesia’s bonds from default rose five basis points to 2.87 percentage points, according to CMA DataVision in Singapore. The contracts rise as perceptions of credit quality deteriorate.
“There could well be a knee-jerk impact,” said Hugh Young, Asian managing director for Aberdeen Asset Management Plc. “Things like this are always a worry but one learns to live with it.”
“The weakness will be short-lived,” said Tim Condon, chief Asia economist at ING Groep NV in Singapore. “Markets will recover and if we go for another protracted period without any follow-up attacks then markets will forget about it and we will go back to the economic fundamentals.”
Source: Indonesia Trade & Inv News-21 July 2009

Board of Logistic [BULOG] Cancels Rice Export

With the permission given to the private sector to export rice, the Board of Logistic BULOG cancelled were permitted to export rice. Such as disclosed by the Director of BULOG public Company Mustafa Abubakar to the pres.

To carry out the export plan, BULOG had held 5 meetings with supplier candidates and prospect buyer overseas. Further this was followed up by requesting recommendation from the Minister of Agriculture. However since the Minister of the Trade adopted a policy that the private sector were permitted to export rice, so the recommendation obtained from the Department of Trade was not submitted to the Minister of Trade as planned.

Up till now the volume of rice exported by the private company only reached 1,500 tons of the target set up by the Government: 100,000 tons. In fact the overseas demand for rice was significantly high. The quality of Indonesia’s premium rice was unmatched in world market. If only Indonesian’s farmers could increase their output of premium rice, then the golden opportunity could be grabbed.

As matter of fact, the overseas markets were also interested in buying organic rice. But Indonesian was not in position into produce pure inorganic rice. The process of making inorganic rice was only to started in Sragen. To produce inorganic rice called for special requirements, among others: the altitude of rice field should be higher than the rice fields not planted with organic rice. This was to prevent watering for the organic rice from being mixed with water containing chemical fertilizers, chemical pesticides etc. In addition to that, organic rice must be certified by the candidates overseas. Presently the farmers capable of producing popular organic rice, using the seeds of Ciherang, IR or Hybrid types, further to be fertilized with organic pesticide but the watering was sometimes still spoiled by inorganic rice filleds areas.

Procurement of Rice
By end of June 2009, realization of domestic rice procurement by BULOG was posted at 2.8 million tons, and target for 2009 was set at 3.8 million tons. Shortage of domestic rice procurement was around 1 million which was to be fulfilled from Gadu harvest. The regional resources of dry rice were among others South Sulawesi, East Java, Central Java, West Java, and West Nusa Tenggara [NTB], East Java, in terms of gadu rice set a target of rice procurement of 260,000 tons against the initial plan of 185,000 tons, whilst West Nusa Tenggara [NTB] increase rice procurement plan from 170,000 tons to become 175,00 tons.

In addition to that, the stock of rice in Bulog’s warehouse up till now reached 2.6 million tons which was sufficient for the rice for the poor program [Raskin] for 9 months ahead. Up to end of June 2009 the realization of Raskin distribution reached 105 million tons or 45% of 2009 target which distributed to 1805 million of poor families [RTM]. The low degree of Raskin realization program was caused by delay of execution, which was not exerdised until April 2009.

Sugar Distribution
Based on the collaboration between Bulog and PT Perkebunan [PTPN] and PT Rajawali Nusantara Indonesia [RNI] as sugar producers, Bulog would act as agency for sugar disyribution at 1.25% fee against sales. In 2008 Bulog handled sales of PTPN and RNI sugar at the amount of 260,000 tons. For 2009 it was agreed that Bulog would market sugar of PTPN and RNI amounting to 681,000 tons of which 38,889 tons had been realized. Auction price of sugar from farmers was lowering from Rp 7,200/kg to become Rp 6,500/kg to become Rp 6,800/kg.

The Government expected that price of sugar at retail level to be at Rp7,000/kg However, Price of sugar at the International market had influenced domestic price of sugar. The price of imported sugar up to importers storage was Rp 8,000/kg to Rp 8,400/kg.

Frying Oil

The Board of Logistic [BULOG] had not been assigned by the Government to handle marketing of frying oil. However, Bulog had submitted to proposed concepts of frying oil management to the Minister of State Owned companies [BUMN]. Firstly, Bulog would pipeline frying oil distribution though the rice for the poor [RASKIN] channel to fulfill need of the poor people. Secondly, BULOG would act as stabilizer of frying oil prices. For that purpose a fund was needed to buy stock of frying oil, besides, to stabilize frying oil price it was inevitable for Builog to hold stocks of frying oil.

Government to Issue Decree of The Ministry of Communication and Information on The Operation of Internet Protocol Television

Having consulted the public on June 16 to 19 2009, the Department of Communication and Information had just completed the Draft of the regulation of the Ministry of Communication and Information on Conducting the Internet Protocol Television/IPTV in Indonesia, it was expected that in the near future this draft of the Ministry Regulation would be passed, this was disclosed by Head of the Center of Information and Public Relations, Department of Comm and Info, Gatot Dewa Broto To the press.

In that public consultation, certain responses gad been addressed to the “white paper” i.e. Policy Plan of the Conducting of IPTV in Indonesia, among others from PT Telcom, PT Excelmindo Pratama, and PT Indonusa Telemedia; result of the consultant had become subject of discourse with various parties toward finalization of the draft.

The operation of IPTV had been developing vastly today as highly prospective business opportunity especially in Western Europe, and Amerika. IPTV developed significantly since 2007 in line with the introduction of you Tube, social network site My Face, Facebook etc.

IPTV services presented interactive program’s with high quality pictures through broadband, well managed internet network. Among the IPTV programs were Electronic Program Guide, Broadcast/Live TV, Pay Per View, Personal Video Recording, Pause TV, Video on Demand, Music on Demand, [walled garden], Gaming, Interactive Advertisements, and TV Commerce.

In Indonesia there were several telecommunication operators who were interested to present the services. This indicated that the draft were not made just for the sake of copying other countries, but rather because of International tendency which was potential in Indonesia while Indonesia operators while condition were conducive for such operations.
The most essential thing in this case was the permit procedure, The consortium consist of a combination of at least some legal bodies in Indonesia who were bound in a company [PT] which were authorized to operate in telecommunication business line; they might apply in writing to the Minister to obtain a permit including there in the required enclosures.

Indonesia’s Export of Fish and Shrimps Marks an Upturn

The epidemy of bird’s flu and swine flu in the world resulted in boosting of fish and shrimps export from Indonesia.

The consumers of Japan, United States of America and Europe which were the main targets of Indonesia’s fish and shrimps exports had shifted to these two commodities for reasons safety.

“There were fears of chicken meat and beef being infected by birds flu and swine flu, hence it is felt safer to convert to fish and shrimps” this was told by Kusdianto, Spokesperson of the Department of Maritime to Business News by phone on Thursday [2/7].

This applied also to other export destination states for Indonesian fish and shrimps, like east Europe, the Middle East, and others.

“Demand from middle east, in spite of the small quantity, increase one hundred percent” Kasubdit Ekspor BPS: Volume Ekspor Ikan dan Udang naik 27% Pada bulan 2009 Sub-Division Head of Export BPS: Volume of Fish and Shrimps Export Up by 27 percent in May 2009.

Total export volume of Indonesian fish and shrimps in May 2009 was up by 27.03 percent to become 59,500 tons compared to export volume of previous month.

As far as the state income was concerned, there had been an increase of 1.94 percent to become USD 137 million by May 2009, compared to income in April of the same year, this was disclosed by Dr Titi Kanti, Sub-Division Head of BPS Export to Business News Wednesday [1/7].

The Director General of Cultivation and Production, Department of Maritime and Fishery Fish Pond Areas to be Expanded to Increase Shrimp Production Output.

Optimizing the shrimp ponds in several places in Indonesia has jacked up the production out put of shrimps.

There were numerous shrimp ponds which were being abandoned since the epidemy of disease which effected the windu shrimps, now were being once more to cultivate the Vaname or white shrimp species.

This had been happening since last year, particularly in Sulawesi and Kalimantan.
“The demand for shrimps never went down and continued to increase; with the upturn of production, automatically the export of shrimps would increase” this was disclosed by the Directorate of Cultivation and Production and Maritime and Fishery to Business News by phone Thursday [2/7].

Inflation by June 2009 Posted at 10.11%

The development of various commodities in June 2009 generally showed increase. Based on observation of BPS Statistics Bureau in 66 cities by June 2009 inflation was 0.11 percent, or an increase of Consumers Price Index [IHK] 2009 amounting to 0.21 percent, whilest the inflation rate year on year [June 2009 against June 2008] was 3.65 percent.

Inflation was due to increase of prices as indicated by increase of price index in the categories of ready food, beverages, cigarettes and tobacco 0.29 percent, categories of housing, water, electricity, gas and fuel 0.04 percent, categories of garment 0.30 percent, categories of health 0.23 percent, categories of education, recreation and sports 0.09 percent and categories of transportation, communication and Financial services 0.25 percent. Mean while’s the categories which showed lowering of index was food raw materials 0.81 percent.

Some commodities which showed price increase through June 2009 were among others air transportation, garlic’s, rawit chili, gold and jewelry, chicken meat, long beans, lemon, rice and fillings, and sugar. Meanwhile the commodities showing price downturn were: fresh fish, red chili, frying oil, spinach, raw tofu, temped and red onions.
In June 2009, the commodities which contribute to inflation were: ready food, beverages, cigarette, and tobacco 0.06 percent, category of housing 0.01 percent, category of garment 0.02 percent, category of health 0.01 percent, category of education, recreation and sports 0.01 percent, category of transportation, communication and financial services 0.04 percent, whilst the categories which contributed to deflation was raw food 0.04 %.

A Half Trillion of Easy Mon

After a legal dispute that has taken almost 10 years in process, the Supreme Court suddenly sentenced ex Bank Indonesia chief, Syahril Sabirin, and businessman Joko Tjandra for misusing central bank funds. Besides a two-year imprisonment sentence imposed on them, Supreme Court decision would bring another legal implication, namely money of more than half of trillions of Rupiahs that became the object of the case that must be confiscated and returned to the state. It is as if the sate treasury received a large blessing after the owner of the money, under the Bank Bali scandal, has remained unknown for years.

The amount confiscated in the Bank Bali case is Rp 546,468,544,738. Such a large sum is enough for cost of construction of 5,000 houses for middle to lower class society, or more than 1,000 of elementary school buildings and their facilities. But, because the money was put in account which function is similar to a deposit box, the amount remains unchanged . If Law enforcers have seriously worked hard to enforce the law in past, especially in Bank Indonesia Liquidity support cases, maybe trillion of Rupiah could have been saved to buy new military planes or to construct railways outside Java, toll roads, seaports, hospitals, or power generators.

To create one case of justice requires 10 years. This is in Bank Bali case. The process of this case was highlighted with a inconsistencies and infirmness of the judges. At lower court stage, Syahril was sentenced with imprisonment, but he was free when the case reached high court stage. When the prosecutor submitted an appeal to the supreme Court, the Supreme Court freed Syahril from charges. There is another story about Joko. At lower court stage, Joko was freed, and the appeal submitted by the prosecutor to the Supreme court was rejected. Actually, there is one more convict in this case, namely ex chief of Indonesian Bank Restructuring Agency, Pande Lubis. He was ruled guilty by the supreme Court and has now passed his four-year imprisonment sentence which he spent in Nusakambangan. The prosecutor found inconsistencies in this case, because three convicts in one case received different punishments. This is the reason why the prosecutor sought a judicial review in this case. And last month, Supreme Court reversed the decision and ruled to sentence to both of them.

In many other large cases, especially those relating to Bank Indonesia Liquidity Support, the court decided in favor of the convicts or the suspect. So, there is an assumption that justice can be bought.

So, when the Corruption Eradication Commission (KPK) started its work in 2004, there are no cases handled by KPK that last for years. And, there are no suspect who are free from legal sentences. For examples, what is revealed in the meeting of Bank Indonesia Board of Governors on flow of money to the house ended in ex Bank Indonesia chief, Burhanuddin Abdullah, being sent to prison.

The Syahril and Joko case should become a good lesson. If the law enforcers work seriously, they can save state assets with significant amount which will be meaningful to the economy. And, we have a bitter experience which is different rulings of different court levels, in one case. So, Joko chooses to run away because he has been safely doing business. And, Syahril, has started its retirement period. Our legal system must be changed to become a predictable one because he has been safely doing business. And, Syahril, has started its retirement period. Our legak system must be changed to become a predictable one because we have the laws. There should be no more cases which process lasts for one decade. Our legal system is one of the reasons why we are surpassed by other nations.

Libya Awaits for Indonesia’s Commitment to Export 5 Thousand Units of Toyota Avanza

Libya was awaiting Indonesia’s commitment to realize delivery plan of 5 thousand Toyota Avanza this year. Assuming 5 thousand units accomplish this year, next year Libya planned to step up import of the said product to 10 thousand unit. Mahyudin Nawawi, Secretary General of Indonesia-Libya Frienship Council [LPIL] disclosed this to Business Nwes.

“We heard that there had been objections from the principals of Toyota Motor Corp in Japan if Indonesia had to export to Libya. Meanwhile if Indonesia’s business was running well, Libya would increase their imports of automotives which were actually to be used for government’s purposes”.

Bachrul Chairi, Head of the Board of National Export Development [BPEN] of the Ministry of Trade, in response to the problem said that the case had been brought forth to the Ministry of Trade Mari Elka Pangestu, who was now trying hard to sort out the case.

To Indonesia, Libya was one of the most important trading partner, because with Libya’s economic growth between 6% and 8%, vast trading opportunities were available, including investment in construction. There had been a good number of Indonesian contractors who under took various important project in Libya such as in architecture, and in the production of raw materials like cement. Indonesia also had the opportunity to send skilled and semi-skilled migrant workers to Libya, as well as experts in oil-gas technology, and construction.

Through January-April 2009 Indonesia’s Export of Textile and Textile Product Down by 10.22%

Through the period of January-April 2009 Indonesia’s export of textile and textile products to the USA showed a downturn of 10,22 percent where notable downturn was in export of textile 25,9%,and garments 2.56%. According to the Chairman of Indonesian Textile Association [API] Benny Sutrisno in Jakarta Tuesday [30/6] after opening of the Uniform in Style 3rd Uniform and Work Wears Fair 2009 at the plaza Deperin was because the USA as one of the world’s greatest textile imports due to global crisis.

Report of the office of Textile and Apparel [OTEXA] of the USA, import of Textile and Textile Products was down by 10,91% compared to the same period last year. The downturn was in textiles 12,46% while import of garments was down by 8.88%. Those were the cause of the downturn of Indonesia’s Textile export to the USA.

Benny elaborated further that the condition did not only occur in the USA market, but also on other major textile markets like Europe and Japan. Hence the Ministry of Trade noted decrease of textile exports up to February this year by 14.3 percent, including downturn of textile export by 36081% and garments by 3.21%.

Under the circumstances, various measures has been taken like market diversification of export destination to Asian states and the middle east like Egypt, Syria, South Korea. In those regions, Indonesia only marked a downturn export with Turkey because in Turkey anti dumping tax were imposed on Indonesian textile products at USD 30 cent /kg above normal rates.

Meanwhile in the Asian Region, some countries were making their marks in textile production like among others China, Bangladesh, and Vietnam which was due to political and economic stability in those regions. Indonesia in particular, the growth of textile industry through March till April 2009 was still favorable textile sales might still show and upturn in the domestic market.

The demand for textile in the domestic Market in Indonesia was jacked up by general election, the more political campaigns, the more textile were consumed for banners, which energized the textile industry, especially in the past few months this year. Indonesia was known as the most complete textile industry where the structure was filled by factories from weaving to spinning this was the kind of structure not owned by other ASEAN states so if not benefited to the maximum, Indonesia miss great market opportunities.

Meanwhile the Director General of Metal and Textile Machineries Aneka [ILMTA] of the Department of Industry Ansari Buchari remarked, the expo which would take place until July 09 was expected to connect consumers, producers and designers in the effort to foster collaboration in the effort to foster collaborations in the effort to foster collaborations in the effort to meet market demand, especially of workers and students school uniform.

Promotion Expenses Might be Deducted from Gross Income

Promotion and sales expenses could be deducted from the grodd income of industry and pharmaceuticals. This was stipulated in the Regulation of the Ministry of Finance [PMK] No: 104/PMK.03/2009 which was effective as per January 1, 2009. The promotion and sales expenses might be deducted from gross income to maintain or boost sales to be spent naturally according to proper businessan’s attitude in the form of good, services, and facilitiesand accepted by the other party.

The promotion expenses, either for cigarettes or pharmaticeuticals might only be spent one time by the producer, main distributor, or sole importer, for the cigarettes with a turnover up to Rp 500,000,000,000,.- [five hundred billion rupiahs] the percentage of promotion expense should not exceed 3% and at the most Rp 10,000,000,000,.- [ten billion rupiahs] Meanwhile the cigarette industry whose turnover was above Rp 500,000,000,000,.-[five hundred billion rupiahs] up to Rp 5,000,000,000,000,.- [five trillion Rupiahs] the promotion expenses shall not exceed 2% or at the most Rp 30,000,000,000,- [thirty billion Ripiahs] The cigarettes industry whose turn over was above Rp 5,000,000,000,000,- [five trillion Rupihas] the promotion expense shall not exceed Rp 1 % or not more than Rp 100,000,000,000,- [one hundred billion Rupiahs].

Meanwhile for the pharmaceutical industry, the promotion expense was not more than 2% of the turnover or not more than Rp 25,000,000,000 [twenty five billion Rupiahs] In case of Promotion in the Form of give –away of product sample, the amount deductable from gross income was the equivalent of basic price. In addition to that the cigarette and pharmaceutical industries were obliged to make a normative list of promotion expenditures and/or sales expend itures spent on other parties . The normative list should at least include taxpayers ID [NPMP] and the amount of expenses spent. If not fulfilled, the promotion expenses and/or Sales expenses could not be deducted from gross income.

In Sprite of 20 Percent Export Contraction Growth of Ceramic Industry Still Impresive

In spite of the prediction that export of Indonesian ceramic was contracting by 20 percent against 1st year, Indonesia was fortunately among the nation’s whose ceramic sales was, in addition to export, supported by domestic demand. According to the secretary General of Association of Indonesian Ceramics Producers {ASAKI] Elisa Sinaga, as Chairman of ASAKI Achmad Widjaya in a press conference on Business and Marketing Competition for Ceramics Industry 2009 in Jakarta, Tuesday [30/6] the contraction was due to the outpot slump of other commodities like coal and CPO, as well as the financial crisis which hampered the whole world.

They were of opinion that the ceramic industry was still dependent on domestic market, due to the low-cost touwnhouse development which was now underway and targeted at building 300 thousand units this year. The development of housing projects from the most simple to the most luxurious needed ceramics for roofing, floor, and sanitaries. In the past 3 year, the ceramics production of all types were projected to reach 330 milion sq M.

Among the problems faced by ASAKI was that the ceramic industry was the kind of industry which used gas as warming fuel; while ceramics was sold in the market in Rupiah, ASAKI had to pay for gas as production cost in US Dollars. IN addition to that this industry still relied on imported content like gaze for processing, and the stove for burning ceramics which needed to be imported, not to mention other components which were not produced domestically. It was note worthy that Indonesia treasured gas resources of clay as raw material for ceramics.
The ceramic industry was classified as labour-intensive-industry, but also needed strong capital investment. In the adverse condition of global crisis, some ceramic producers had to reduce their export capacity and rely on domestic consumption. On the other hand there were producers of house building materials like Royal Doulton who has a foothold in the domestic market, the demand had contraxted by 20% due to global crisis. Today, 8 domestic companies produced ceramics at the total volume of 12 million units.

Ceramics as a Commodity
Surya Wirawan, Executive Chairman of Business and Marketing Competition for Ceramics Industry 2009 hoped, workpieces of the university students in ceramix creation would contribute to add value to the ceramix industry aesthetically or creatively, whereby to foster collaboration between the ceramic designers and architects and engineers in chemical technology and marketing experts whereby the ceramics industry might become premium industry of the future.

This prestigious forum, which was attended by 45 participants, finally choosed 20 work pieces of which 5 masterpieces of the finalists were selected. They came from various universities like Universitas Indonesia, Universitas Gajah Mada, Universitas Parahiyangan, Universitas Brawijaya, and Universitas Pelita Harapan. In addition to cash asprizes, the winners would also be participating as Indonesian delegates at the world Tile Manufacturing Forum year 2010.

In the event to be staged on July 2, 2009 in Jakarta , ASAKI would symbolically present the profile book of ceramics industry to the Minister of Industry Fahmi Idris. Being part of the activities of the Indonesia Creative Year 2009, ceramics were no longer perceived as a commodity if art but also a commodity which fulfill all house building material needs like floor, tiles, etc. Ceramics would be needed in any building projects like hotels, building etc non of which were not in need of ceramics.

“Students are expected to be one of the communicator of creative ideas which would produce designs with a touch of artistry, which could bring added value to ceramics for building materials which leads to the development of a structured business line in Indonesia” remarked Achmad Wijaya.

Indonesia’s World’s Largest CPO Producer

Indonesia’s crude palm oil (Cpo) production has remained the largest in the world with closest competition being in Malaysia. To support the trading performance, mainly export, Indonesia ha concentrated on not only CPO but also derivative products thereof.

CPO industry is highly potential to grow in Indonesia thanks to the support of downstream industries, which produce derivative product, such as cooking oil, butter, fatty acid, fatty alcohol and glycerin. On the other hand, the downstream industry could utilize the momentum of the decrease in CPO price to absorb the excess of CPO supply in the country.
Besides driving up the export, the government also continues to increase the domestic market demand for CPO by means of, among others, developing bio-diesel and other downstream industries. The Government also has made regulation and agreement with national CPO industry to guarantee supply of CPO for the need of biodiesel industry.

Being the world’s CPO largest producer, Indonesia should become a player that determines the price in CPO industry. For the purpose, the government started to prepare infrastructure to support the increase in CPO production because inadequate infrastructure has caused buyers to dictate the price by using quotation in Rotterdam, heavily dependent on market price in Singapore.

Indonesia’s CPO production is predicted to double in three-five uears to come and Indonesia needs adequate infrastructure to become a key player in the trade of CPO. In order to anticipate the increase, technical ministries, such as the Ministry of Public Works, Ministry of Forestry and Ministry of Agriculture must cooperative to build synergy by means of preparing the transportation facilities, seaport and downstream industry.

The rising production is driven by the government’s policy to drive up the domestic demand through obligation to mix fuel with biodiesel as much as one percent in 2009 and five percent in 2010. The Domestic market demand for CPO, especially for food industry has reached 4.5 million tons. The demand is predicted to increase by 55.5% in 2010 due to the mandatory use of bio-diesel.

The policy would also drive up the growth of bio-diesel industry in Indonesia, which was once stagnant due to the surge in the price of CPO to US$1,250 per ton early last year. Some 70% of the country’s CPO production has been destined to the export. Following the increase in the international price of crude oil to US$100 per barrel, the global market demand for CPO also rose thus driving up the price to US$1,250 per ton.

However, the price of CPO decreased to beneath US$500 per ton after the International price of crude oil moved downward to US$50 per barrel. In a bid to reduce the dependence, the government strives to drive up the domestic market for CPO through biodiesel policy and the development of downstream CPO industry having high added value.

Export Down
After the government set the export duty on CPO at 3% on June 1, 2009, following the increase in the price of the CPO, US$780 per ton, parties started to worry about the decreasing export. In a bid to stabilizes the price, the government imposes not only value added tax but also export duty once the price exceeds US$700 per ton.
However, the government’s decision to increase the export duty is potential to make Indonesia’s CPO unable to compete with similar product from other competitors, such Malaysia, India and China … Data at the Indonesian Palm Oil Producers Association (GAPKI) show that Indonesia’s export volume of CPO reached 17.17 million tons last year and 5.57 million tons in the first four months of 2009. The main export destinations of Indonesian’s CPO were India , Europe, and China last year with the volumes 5.40 million tons, 2.88million tons and 1.70 million tons respectively.

Commission VI of Parliament Approved Government Workplan 2010 for Investment Coordination Board [BKPM]

Commission VI of the Parliament approved the State Budget of Foreign Investment Coordination Board [BKPM] particularly on the Government’s workplan 2020, among which was the Workplan 2010 on the upgrading of natural resources management and the anticipation of climate change. This was disclosed by Vice Chairman of Commission VI of Parliament Anwar Sanusi upon leading the hearing session with the Vice Chairman of BKPM Yus’an at the house of representative.

The Investment Coordination Board BKPM was urged to set up a program which was inter-supportive and sustainable. In addition to that Commission VI of Parliament also asked for the breakdown and supplement of ceiling figures for budget year 2009. The indicative ceiling of BKPM for 2010 was Rp 364.967 billion. Further discussion on 2020 budget would be made in the hearing session with the Senior Secretary of BKPM.

Commission VI of Parliament had asked BKPM to take acceleration steps in the effort to optimize budget realization and program effectiveness until budget year 2009. This was due to low degree of utilization of BKPM budget which, up to June26 only absorbed Rp 136.627 billion or 36.26 % of budget selling.

Meanwhile Vice Chairman of BKPM, Yus’an stated, in accordance with the Government’s workplan 2010, the fourth priority of development of agriculture, infra-structure and energy. The program strategy to be implemented and prioritized by BKPM in Government Workplan 2010 for economic recovery would reliant on the development of agriculture, infra-structure and energy which were categorized into 3 program namely: upgrading of public services, revitalization and realization of investments plans, augmenting of promotional program and investment collaboration.

BKPM in budget year 2009 was entitled to budget ceiling of Rp 376.815 billion. The allocation for budget ceiling of State Budget 2009 was divided into 4 programs, among which were promotion of investment climate and realization of investment.
In the effort to optimize absorption of budget, and to ensure maximum efficiency whereby all plans could be well executed, the BPKM had taken the following steps: to identify hindrances in the execution of programs, whereby to further find alternative solution and to optimize the effectiveness of ala activities.

Suspension of L/C Obligations Expected to Ease Export Procedures of Coffee

The Association of Indonesian Coffee Exporters [AEKI] welcomed the Government’s policy to suspend Rule of L/C obligation of coffee exports which was originally planned for April 1, 2009 to August 31, 2009. This postponement was expected to smoothen export of coffee which once happened to be stagnant since overseas buyers were waiting for the execution of the rule. In the period of suspension it would be most advisable that the Government thoroughly prepared technical matters like arranging bank correspondence of the National Foreign Reserves Bank.

Rachim Kartabarata, Executive Secretary of AEKI in an interview with Business News stated that export coffee at the value of under USD 1 million was not obliged to use L/C, but was still mandatory to report. This rule would be reviewed by end of September 2009. To export Arabika coffee at the value of USD 1, at least 2 to 3 containers would be needed, whilst for exporting the Rubusta coffee from Lampung with the transaction value up to USD 1 million, more containers would be needed.

The rule of L/C obligation for coffee export was considered inappropriate under the present adverse condition. Most local foreign reserve banks still had no strong linkages with overseas international banks in the export destination states. The domestic bank only liquidated the L/C issued by the corresponding bank overseas. During the global financial crisis, many banks crumbled. In addition to that, the problem was scarcity of bank correspondence at the destination states of coffee export, whilst overseas branch office of local banks were too few.

In addition to that, the policy of L/C obligation arose suspicion among buyers against exporters, because the business built upon trust would be disturb by binding rules which put overseas buyer in difficult position. Payment by L/C had long been abandoned by coffee exporters due it its high cost. If L/C obligations were to be put in effect, small coffee exporters would have to face problem, since they were accustomed to penetrate the export market without using L/C which means that small exporter might loose their competitive edge against big exporter who were mostly foreign companies [PMA].

L/C obligation would create extra cost, i.e. for opening the L/C or liquidating the L/C through Banks-this implied that the extra cost would burdened on the farmers, resulting in the reduction of farmers income all in all, the L/C obligation did not offer any plus point to neither exporters nor formers but one thing was sure it would weaken local exporters of coffee exporters of coffee overseas.
Suspension of L/C obligation, while being applied on coffee export, was also applied on cacao and rubber. The reason of postponement was because the downturn of export performance input from the parties concerned and the difficulties of small exporters to meet L/C requirements. On the other hand, the external condition was a lot worse than predicted. The advanced states were having recession and the volume of world’s trade was contracting.

Government to Issue Presidential Decree on the Creative Industry

In view of the fact that the creative industry was able to with stand crisis, the Government planned to introduce a Presidential Decree [Inpres] which stipulated the development of the creative industry whereby to ensure sustainability, as proposed with other related Minister Mari Elka Pangestu disclosed this on Friday [26/6] admidst staging on the third Indonesian Creative Product Fair [PPKI].

The PPKI Fair 3 was opened by President Susilo Bambang Yudhoyono under the name of :”To Rest on Culture and Technology as Foundations of the Developments of Creative Industry” We are superior in terms of rich and diversified culture. Therefore, players of the creative industry, especially those based on culture should be given enough room and opportunity’”

Further Minister Mari Pangestu remarked, “the synergy between culture and technology will not only yield creative, competitive products of added value, but also open market opportunities at home and abroad. A touch of Indonesia’s colourful and diversified culture on products would yield added value, stronger attraction in the global market thanks to the Indonesian creative products which have their special characteristics and excellence not owned by International competitors”.

Quoting the President’s statement, Mari disclosed that in the past three years, Indonesia had been enhancing the growth of creative industry. Starting with the staging of Indonesian Cultural Products Fair 2007, in 2008 a blueprint of the creative industry was made this year of 2009 had been announced as Indonesian Creative Year 2009.
In tandem with the central Government, the regional Government in various cities like Bandung, Yogyakarta, and Solo, commitments had been made to support the development of the creative industry.

Big and Medium Business Still Significant
With the participation of the small-and-medium industry and micro-industry in the creative industry, the total contribution to national GDP in 2004 – 2008 had been trenghened to 8 percent such a condition reflected the significant contribution of small-medium business to the creative industry.

The business lines of the creative industry, which contributed dominantly to GDP were the sectors of fashion and handicraft, whilst those which contributed greatly were the sector of the design, advertising, music, film, computer services, interactive games, software’s, architecture and other activities which were information and technology.

Meanwhile in regard to the role of small and medium business in the creative industry, the Government, while implementing the Law of Electronic Transaction [TEI], were facilitating small and medium business to enable them making transaction by internet, i.e. on business-to-business basis [B to B]. Witnessed by the minister of Trade Mari Elka Pangestu, the National Board of Export Development [BPN] of the Ministry of Trade had signed mutual agreement with Sinar Mas Muliartha Tbk [SMMA] as executive partner [a big trading company which run E-Commerce and was established in 1999] in the effort to support export marketing.

Through collaboration which initially were run on free-of-charge basis, it was expected that 250 small-and-medium Center [PDKM] and BPEN, would have easier and faster access to the global market without having to join any expo overseas, the head been of BPEN of the Ministry of Trade Bachrul Chairi stated.

Since 2008, Alibaba .com membership had been growing fast. The total 40 million members from 240 countries had been benefiting from services to market their products, among which 250,000 members were from Indonesia.

Sunday, 26 July 2009

The Creative Industry Projected to Support Economic Growth

President Susilo Bambang Yudhoyono felt sure that the creative industry in Indonesia would serve as one of the supporting cornerstones of the nation’s economic growth in the future. This was disclosed upon opening the Indonesian Creative Product Fair 2009 in Jakarta Friday [26/6].

According to the President, in the future Indonesia’s economy could no longer rely solely on agriculture and conventional services. The way it had been. These conventional occupation served as economic backbone of the nation. Agriculture for instances, served to support domestic need, whilst manufacturing could accommodate numerous workers and business lines of service nature had been growing favorably.

However, apart from developing creative products, there were two other business lines which called for attention to be developed, this were tourism and creative industry, because these were two areas where the nation’s economy could rely on. “The creative industry which is based on culture and technology could be highly contribute the nation’s economic growth and offered more job opportunities systematically, which in the end might contribute to mini mizing poverty in Indonesia” the President remarked.

Meanwhile the Minister of Trade Mari Pangestu stated that the role of small-and-medium business would be able to jack-up the contribution of creative industry to the Nation’s GDP to became 8% through the period of 2004-2008. Formerly contribution of the creative industry which was shared by big and medium players only was only posted at 6.3% during the data updating of the creative industry, the Minister added 6.3% contribution to the GDP on behalf of big- and-medium companies plus micro industry and household. The contribution of small-and-medium business was up by 8% in 2004-2008 which was significant and therefore shall continue to be enhanced.
Of 14 sub-sectors o the creative industry, the following showed very significant increase fashion, music, film, software’s, advertising, architecture, and inter-actives . Under adverse conditions due to crisis, The Minister disclosed, the creative industry showed positive growth. Road map of the creative industry showed by 2025, this sector would be one of the cornerstones of the nation’s economy together with agriculture, manufacturing, and services.

Tender of Airport Railway Development Project to be Announced July 2009

If all goes well, the name of winner of tender of airport railway development project would be announced by next July, having run the tender for the third time. In this third tender, among the participating companies in the tender, three of them had submitted their documents on July 22, 2009, namely: Rallink, Mitsui, and China Harbour Indonesia.

Nugroho Indriyo, Secretary General of Railway stated that PT China Habour Indonesia which was a newcomer in the tender, had submitted the application form on time for the third auction on June 22 2009. This company from China would, with PT Rallink and an investor from Japan. Mitsui, fight for the opportunity to build the Soekarno Hatta airport railway project and to run the operation as well a project which was worth Rp 2.2 trillion.

However, it was still doubtful if the three companies would pas the examination of documents evaluation. Assuming that the winners were just two persistent companies, the Government would directly appoint the winner obviously in accordance with the applicable regulations.

The appointment of winning company would be based on the criteria of best company. So it was a matter of their Investment, whether they could come up with the best infra structures. The Department of Transportation it self had not received any input in regard to be auction of this railway project hence the Government was not in the positions decide whether the project would be executed or not, considering that the winner consisted of only 2 companies.
The tender of Soekarno-Hatta airport railway project had been repeated for the third time, because the inventors who were registered did not continue their participation, so that the minimum required number of tender participants could not be fulfilled. The first tender was participated by a number of investors, but only one participant submitted the application form, i.e PT Rallink; the second tender was participated by 2 companies, again this had to be repeated since there were only 2 companies who participated, which nade it difficult to make any announcement.

Wednesday, 22 July 2009

DNI revision to be finalized by the end of the month

The revision of the presidential regulation on the investment blacklist (DNI) is scheduled to be finalized by the end of this month. The regulation will place Indonesia as the most progressive ASEAN countries in terms of foreign ownership, said the chairman of Investment Coordination Board (BKPM) M. Lutfi. He added that one of the most important points in the regulation would that foreign companies listed in the Indonesian Stock Exchange would receive similar treatment with domestic investors and not included in the blacklist.
Source: PA Asia - Public Affairs and CSR from Kompas, p.17 15 Jul 09

RI, EU agree to sign PCA

The Indonesia-European Union bilateral consultation forum agreed to sign a partnership cooperation agreement (PCA) at a two-day meeting which ended in Yogyakarta on Tuesday. The PCA is the first bilateral agreement between Indonesia and the EU. The statement said the agreement would hopefully ensure close and sustainable dialog and cooperation to develop partnership such as trade ties between Indonesia and the EU as well as to promote cooperation in education, research, environment, energy, tourism and transportation. The forum also agreed on the planned meeting between Indonesian Trade Minister Mari Elka Pangestu and her EU counterparts later this year to discuss a wide range of important issues related to trade and investment.
Source: PA Asia - Public Affairs and CSR from Antara news website, 15 Jul 09

Indonesia may receive a US$ 1 billion grant from the US

Indonesia may receive a US$ 500 million-1 billion grant from the US as part of the Millennium Challenge Corporation (MCC) compact program, aimed to support the efforts to reach the Millennium Development Goals, especially for health services, law improvement and capacity building for government officials. The Head of the National Development Planning Agency (Bappenas) Paskah Suzetta said the government will involve the private sector in handling the fund.the target and luxury sales tax on imports Rp66.2 trillion or 69.8% of the target, she said.
Source: PA Asia - Public Affairs and CSR from Investor Daily, p.16 14 Jul 09

Indonesia economy a ‘winner’, says World Bank

Indonesia’s economy is set to emerge a “winner” after avoiding the worst of the global financial crisis, the World Bank’s country director Joachim von Amsberg said. Indonesia as Asia’s fastest-growing major economy after China and India can expand significantly more than 7 percent once President Susilo Bambang Yudhoyono fixes the nation’s congested roads, neglected ports and ageing power plants, he added. Indonesia, he said, may expand as much as 4 percent this year.
Source: PA Asia - Public Affairs and CSR from The Jakarta Post, 11 July 09, p.13

Renewable promises await delivery

The country's massive potential in renewable energy is heavily under-utilized because of fears about costs, feasibility and viability. More research could help to remove the risks.

Only 4% of renewable energy potential in use

Indonesia has so far tapped into a very small part of its renewable energy resources, with high costs and uncertainty over feasibility among the major problems facing the nascent renewables industry.
In a paper delivered at the International Workshop on Advanced Material for New and Renewable Energy (AMNRE) held in Jakarta in early June, Ms. Verina J. Wargadalam, the coordinator of the renewable energy research group of the Ministry of Energy and Mineral Resources Ministry, gave some new insights in the scope of these resources. With an estimated annual capacity in excess of 150 gigawatts (GW) from hydro, geothermal and biomass sources alone – not counting other high potential energy resources such as solar, wind and wave energy – current use at 2007 levels was less than 5.7 GW, she said. In a breakdown of potential capacities, she described how more than 1,300 potential locations for hydroelectric generation are spread across the country with an annual potential of 75 GW. More than 252 areas identified as potential geothermal fields have estimated small to intermediate enthalpy of about 30 gigawatts electrical (GWe) and high enthalpy of about 27 GWe. Regarding biomass, meanwhile, agricultural and forestry waste has an annual potential capacity of 50 GW.

Although the government has set a target to increase the proportion of renewable energy in its energy mix from year to year, Verina said bringing these highly potential energy resources to mass generation was not fairly feasible just yet. "Very few industries get involved in research and development activities for renewable energy projects because it requires large amounts of money," she observed.
The ministry, Verina added, was researching biomass gasification, fuel cells for power generators, bioethanol from industrial waste, geothermal reservoirs and wind turbines.
Source: PA Asia - Public Affairs and CSR, derived from The Jakarta Post, p.15, 10 June 09

Sunday, 12 July 2009

Company registration

Addressing the need to improve the existing regulation on Company Registration and to provide better service to the public in this field, the Minister of Law and Human Rights recently issued Regulation of the Minister of Law and Human Right No. M. HH-03. AH.01.01 Year 2009 on the same subject matter (“Regulation No. 03”).
Regulation No. o3 confirms the applicability of the Company Registration requirement under Law No. 40 of 2007 to all Limited Liability Companies, citing that the Company Register is a source of information on companies for the public. Among the information and data of a company that are recorded in the Company Register are:• name and domicile;• object and purpose and activities;• capital (start-up, placed and paid-up, number of shares and nominal value);• full address ;• number and date of the Deed of Establishment;• full name and addresses of the shareholders, directors, and commissioners;• audited financial documents, such as balance sheets and profit / loss statements.

Companies are also obliged to report on any changes to the recorded data or information that occur subsequent to the registration.
The Company Register is maintained by the Minister of Law and Human Rights, who may assign an officer for the administration. Regulation No. 03 also sets for the procedure for the recordation of the information and the maintenance of the register, as well as the procedure for obtaining information and data of a company.
This Regulation No. 03 entered into force on 9 February 2009, thereupon it revoked the previous Regulation of the Minister of Law and Human Rights No. M-01. HT.01.01 Year 2008.

H2 GDP growth forecast at 4.6% on year

The economy is expected to grow 4.6% in the second half of 2009 from a year ago, Finance Minister Sri Mulyani Indrawati said on Tuesday, Reuters reported.
The budget deficit is forecast to be Rp2.3 trillion ($225.3 million) in the first half of 2009, while the deficit for the year was still expected to be 2.5% of GDP, Indrawati told a House of Representatives budget committee hearing.
Indrawati also said Indonesia had a budget surplus of 0.2% of GDP as of May 29.
Indrawati said private consumption, the backbone of the economy, will likely expand 5.8% on year in the January-June period, whereas government spending will increase 17.7%.
Investment may grow 5.6% in the first half of the year from the same period last year, she said.
Exports will likely decline 16.7% on year for the same period, whereas imports will shrink 22.2%. According to Indrawati, the economy will likely grow 4.1% on year in the first half of the year and 4.6% in the second half.
Indrawati expects the budget deficit for next year to narrow to 1.3% of GDP.
Tax revenue for 2009 is projected at Rp577.6 trillion ($56.604 billion) or 98.3% of Rp587.8 trillion set in the economic stimulus document, Asia Pulse reported Indrawati as telling the meeting. First quarter tax revenue stood at Rp256.7 trillion, accounting for 43.7% of the target for 2009.
The lower-than-expected tax revenues were the result of the global economic slowdown, low imports, a decline in average crude oil prices and a drop in value-added tax on imports, she said.
Income tax on non-oil and gas commodities would likely reach Rp290.9 trillion or 103.6% of the target, income tax on oil and gas commodities Rp49.5 trillion or 127.7% of the target and property tax Rp23.9 trillion or 100% of the target, she said.
Value-added tax and domestic sales tax might reach Rp136.9 trillion or 98.6% of the target and luxury sales tax on imports Rp66.2 trillion or 69.8% of the target, she said.

Establishment of state-owned company to guarantee infrastructure projects
The government is making an attempt to increase private investment in infrastructure by establishing a state owned company that provides guarantee for infrastructure projects run by the government in cooperation with private entities.
As set forth under Government Regulation No. 35 of 2009 (“Regulation 35/2009”) regarding Capital Participation of the State in the Establishment of a State-Owned Company in the Field of Infrastructure Guarantee, dated 5 May 2009, the state’s capital participation in this state owned company is in the amount of Rp. 1,000,000,000,000 (one trillion Rupiah), to be covered by the 2009 State Budget.
Regulation 35/2009 specifically stipulates that the delegation of the Minister of Finance’s authority to the State Minister of State-Owned Enterprises as meant in Government Regulation Number 41 of 2003, does not apply to the subject matter covered under Regulation 35/2009. In other words, this state-owned enterprise is under the authority of the Minister of Finance.

CPO production in 2009 is predicted to reach 21.5 million tons

The domestic CPO production in 2009 is predicted to reach 21.5 million tons, exceeding an earlier estimation of 20 million tons. According to the DG Plantations of the Agriculture Ministry, Achmad Manggabarani, this is caused by the expanding palm oil plantations from 7.157 million hectares in 2008 to 7.693 million hectares in 2009. In 2020, CPO production may reach 40 million tons with a total area of 9.127 million hectares.
Source: PA Asia - Public Affairs and CSR from Suara Pembaruan, 1 July, p.15

Traditional market will be improved continuously

Trade Minister Mari Pangestu urged traditional markets to push themselves forward in terms of physical appearance or management, according to the criteria outlined in the Trade Minister Regulation No. 53/2008. Currently, there are 13,000 traditional markets in Indonesia. However, less than 50% of those are well managed.
Source: PA Asia - Public Affairs and CSR from Bisnis Indonesia, 6 July, p.m3

Tuesday, 7 July 2009

Dutch lead overseas investors here, BKPM says

The deputy chairman of the Investment Coordinating Board said on Monday that the Netherlands was the No. 1 investor in Indonesia over the past six months, although he declined to state the actual value of the investments.
“We have the Netherlands as the No. 1 investor, followed by Singapore and South Korea,” said Yus’an of the BKPM during a hearing with the House of Representative’s Commission VI.
Dutch investment focused on the hotel, textiles, and iron and steel sectors, while Singaporean companies invested in the trade, electricity and water sectors, and South Korean firms in the iron ore and construction sectors.
Source: JakartaGlobe, 30 June, section B

Government, House agree on region-based power rate

The government and lawmakers have agreed to adopt a region-based electricity rate system, said J. Purwono, Director General for Electricity and Energy Utilization at the Energy and Mineral Resources Ministry, The Jakarta Post reported.
The new electricity rate system would be incorporated in new regulations on electricity which are currently being deliberated by the government and House of Representatives, said Purwono, adding that about 90% of the bill has been agreed on.
"We expect the House to pass the bill by the end of the lawmakers' current term on July 3. The new system is expected to be implemented by the end of 2010 or by the beginning of 2011," Purwono said.
"For regions covering more than one province, the rates will be determined by the central government. For regions within one province, rates will be determined by the provincial government," Purwono said.
With the new system, regions with better electricity services such as Java and Bali are likely to pay higher rates than other regions, Purnomo said.
"The subsidy will still be provided, but will mainly go to regions outside Java and Bali where the power network is not as extensive," Purwono said.
The government has agreed to sanction PLN`s business margin of 2% or about Rp3 trillion to calculate electricity subsidies for 2010, Purwono said on Tuesday. Earlier, PLN proposed a 3% business margin to calculate electricity subsidy for 2010, Antara reported.

Annual inflation sinks to 9-year low in June

The rate of annual inflation fell in June to its lowest level in nine years, according to official figures released on Wednesday. But analysts were divided over whether the drop would spur the central bank to further cut its key interest rate to help fuel economic growth. The Consumer Price Index, a key gauge of inflation that measures that average prices of goods and services and services purchased by households, rose 3.65% in June compared with the year-earlier period, a slower rate of increase than May’s annual rate of 6.04 percent, the Central Statistics Agency (BPS) said on Wednesday. The bureau said the drop in the year-on-year inflation rate resulted from especially high prices. Which spurred by a increase in fuel prices in May 2008.
Source: GlobeJakarta, 2 July, A3