Three Toll Road Sections To Be Put In Tender Through 2012-2013

The three toll road sections, namely Medan Kulanamu-Tebing Tinggi 60 km long, worth USD 475 million of investment ; Cileunyi – Sumedang – Dawuan (Cisumdawu) 58.5 km long worth  USD 252 million. According to Ghani, the three toll road projects already had definite support, hence ready for auction.

For the construction of Medan – Kualanamu – Tebing Tinggi toll road section and Cisumdawu the government would get loan from China. However, although financed by overseas, the government would exercise the land clearing using State Budget fund.

To drum up private investment, sometime ago the government already offered the project to china. During is visit to this bamboo curtain country, the BPPT executive explained about investment procedures of toll road building in Indonesia, and disclosed various problems faced as well as the measures taken by the government.

“However at the time there was still no investors stating their interest. Normally the interested investors would come over to Indonesia. They would carry out their own study and directly contact the related official” Ghani remarked.

Indonesian Shoes Competitive Against China

As one of reliable export commodity, footwear plays an important role as forex contributor to the state. Besides, because of the labor intensive nature of the industry, the footwear industry accommodates workers in great number. The two roles, as forex contributor and labor absorber are enhancer of growth year after year, and vitalizes investment including foreign investment.

Data of the Indonesian Footwear Association (Aprisindo) showed that export of national footwear this year was targeted to reach USD 2.4 billion. Meanwhile ini the domestic market Apsirindo reported increase of 30% this year against previous year at Rp 27 trillion.

Positive trade performance of national footwear, at domestic or export market, testifies that national footwear industry continues to exist in spite of import invasion from china. On the other hand, the ACFTA era should recharge spirit for Indonesian footwear producers whereby to sharpen their competitive edge through betterment of quality and design.

Head of the Small Business (UKM) Development Division Tongki Komaladi was optimistic that Indonesian products were competitive against China’s product at the domestic market. According to Yongki, invasion of china’s products to Indonesia was not a hindrance to the domestic shoes industry. Evidently sales of local shoes remained stable or even increasing. The most important thing was to create innovative products “the more unique our products the harder it would be for china to compete with us” Yongki remarked.

In fact the storm of china’s products caused by the ASEAN-China Free Trade needed not to be over responded by Indonesian business people with excessive fear. Every shoes producers, Yongki said has their own strategy to wall out invasions, so it was not necessary to worry that China would dominate our market. He was still optimistic that although around 60% of shoes raw materials were imported his products would not be edged aside by China.

Admittedly there were still obstacle faced by national footwear industry, among them great dependency on imported raw materials and high bank interest. He elaborated that bank interest at Bank Indonesia was still two digit. In addition to that the cost of logistic collecting during distribution was very expensive. All were regarded as hindrances to the development process of national footwear industry. Therefore, according to Yongki it was simply wrong to beg to the Government to give facilities and convenience.

BRI Extend Investment Credit and Capital to Perhutani

PT Bank Rakyat Indonesia (BRI) entended loan to Perum Perhutani in the form of credit investment of working capital worth Rp 1.964 trillion. The loan would be used by State Owned Companies (BUMN) who managed forest in Java for capital expenditure amounting to Rp 964 billion and for operational expenditures worth Rp 1 trillion.

The Director of institutional Affairs and BUMN Asnawi Syam stated that the funding extended top Perhutani was a form of inter BUMN act of synergy. Furthermore as a healthy BUMN with achievements of making hundreds of billion Rupiah of profit in the past 3 years, Perhutani was never touched by any credit facility.

“we feel sure that the financing facilities or offer would enable Perhutani to be more focused in their effort an be able to exercise business development and other investments” Annawi made this remark during signing pf credit agreement in Jakarta on Monday (30/5).

Besides financing operations, BRI would also undertake payroll for Perhutani employees, where BRI commands over effective payroll system most appropriate for institutions employing large number of workers.

In the same opportunity, Financial Director of Perhutani ANS Kosasih stated that the financing was badly needed by the Company was never given any credit it was because Perhutani was able to finance need from their own pocket. However as time goes by, such was no longer appropriate. Perhutani was too late in developing business, while competitors from Indonesia and over season were in  a better porition to develop business.

With this new sourch of financing, Perhutani capability to develop business was increased, and consequently jack up performance.

By end of 2010 Perhutani had made earnings of Rp 3 trillions and made profit befire tax of around Rp 325.45 billion. Kosasih was certain that he could make profit up to Rp 1 trillion in the next two or three years.

As known, since founding, the Directorate of Business an institutions of BUMN in 2007 now there are around 56 BUMN who have had credit facilities, cash or loan, in the form of working capital and credit investment and non cash loan in the form of facilities like Bank guarantee, LC/SBLC etc.

The commitment or credit from BRI in the form of cash loan to BUMN up till now had reached Rp 54 trillion with outstanding account of around 29 trillion. Apart from the said assistancem Bank BRI would act to manage payroll to around 25,000 workers of Perum Perhutani in Java and Madura.

Payment of employees salaries through BRI was the right solution, because BRI was the right solution, becauses BRI network are close to Perhutani operational units. Mpreover BRI is experienced in paying salaries to institutions like the Ministry of Religion, the army, airforce, police, Public Workers, etc.

Parliament to Make Amendment on State’s Financial Law

Deputy Chairman of the Legislation Board of House, Dimyati Natakusumah said that House planned to make amendments on Law No. 17/2003 (BN no 6913 page 168-208) on state’s finance. The law amendment was included in the National Legislation Program of prioritized Bill 2011.

Law No. 17 year 2003 had not regulated independency in management of financial state for authorities in the government, the Legislation authorities and judicative authorities. For that matter amendment of this law would be necessary.

Bomer Pasaribu, ex Deputy Chairman of House of the past period stated that the effort to amend law no. 17/2003 had begun since 6 years ago. Chairman of House and Convention Board of 2004-2009 on March, 2005 assigned the Legislation Board of House and Commission XI of House to make through analys on law and regulations to enhance independence and effectiveness of House’s role.

According to Bomer, in line with the dynamic of life, the demand was not to maximize the role of House but also  other state’s institutions like DPD, the Yudicial Commission which were close to three summits of power i.e. executive, legislative and judicative.

The objective of law amendment was to strengthen the three summits of power including the Regional Representatives (DPD) and Yudicial Commission.

The Legislative Body needed to synchronize perception of the amendment, to decide what was needed total change or limited change. However it was recommended that the amendment was limited. If the change were overall it might take a long time to accomplish. House must focus attention on three executive summit i.e. executive, legislative, judicative and the corresponding body.

This law amendment must be carried out the limited way, in principle it should be active and fast and be finalized by 2011, so it could be implemented in State Budget 2012 an onward. The principle of limited revision should be understood as anticipation of amendment of other related laws such as Law no 1/2004 (BN no 7021 page w 13B-14B) on state’s treasures and law no 15/2001 (BN no 7120 page 1B-6B) on management Examination and Financial responsibility of State Budget and other Laws.

Meanwhile Pateniari Siahaan who was also Vice Chairman of the Legislative Body of House for the period 2004-2009 agreed on amendment of the Law of State Finance. However the Legislative body of house must take through analysis in the changes. The problem was that there were 18 other laws which needed synchronization, harmonization and round ups. (SS)

Ministry of Industry Absorb 14,9% of Definitive Ceiling of State Budget 2011

Until quarter I 2011, precisely May, absorption of budget by the ministry of industry reached 14.9% of definitive ceiling of State Budget 2011 at Rp. 2240 trillion. The minister of industry M.S. Hidayat, during technical meeting with commission VI of house on Monday (6/6) disclosed that the budget absorption level was on the right track, considering that tender process of government projects had just begun.

In part of his presentation to house it was stated that in 2012 the ministry of industry had recommended 11 tasks under the Director General of Basic Industry Manufacturing, the Directorate General of Industrial Zones Development the Directorate General of Climate Management and Industrial Quality; the Directorate General of International Industrial Collaboration, and the Secretariat General respectively.

Through a number of recommendation which supported development acceleration and expansion of six economic corridors the total fund reached Rp 472 billions, of which the greatest allocation was for the development of cheap public transportation amounting to Rp 144 billions and extra restructurization for textile-and textile products industrial machinery worth Rp 100 billions.

In the effort to increase added value to domestic agro industry, apart from enhancing investment in certain Industries in certain facilities and asked the ministry of finance to give incentives to industries who processed their raw material at home (such as for mining products) while on the other hand to impose disincentives on commodities brought out of Indonesia, such as by way of imposition of export tax.The regulations was intended to be put in effect on the mining and petro chemical industries, to shift domestic industries more to the downstream side.

Export Tax Down, Export Up

In May – June 2011, the government reduces export tax for cacao to 10% after it once decided to impose 15% export tax on cacao. High export tax had a consequence on the performance of cacao export in April 2011 which was sluggish. Based on data of the National Bureau of Statistics (BPS) in April 2011 volume of Indonesia’s cacao export only reaches 1,199 tons. This number falls by 83.6% from the month before which reaches 18,743 tons. Export tax reduction is expected to boost cacao export.

The Indonesia cacao farmers Association (APKAI) predicted that in 2011 national production of cacao beans could reach more than 700,000 tons. While, in fact, the Indonesian cacao Association (ASKINDO) is pessimistic that cacao beans production this year could only reach 500,000 tons. APKAI’s prediction is higher than ASKINDO’s as there are some regions which produce higher volume of cacao, they are, amongst other, central sulawesi and west sulawesi. In these regions, cacao bean harvest could reach 500 tons/hectare. Nationally, cacao beans harvest in January – May 2011 only reaches 300,000 – 400,000 tons.

The international Cacao Organization (ICCO), stated that world’s cacao supply will experience a 189,000 MT surplus. The oversupply is due to increase of cacao production in Africa. Cacao harvest I Ghana, world’s second largest cacao producer, will increase 52% to 960,000 tons in the harvest season this year. Meanwhile, cacao production in Ivory Coast will also increase 4.7% to 1.3 million tons. Cacao production in Nigeria will increase by 5000 tons to 240,000 tons. Cacao harvest in Cameroon is predicted to increase  100,000 tons to 215,000 tons.

On the contrary, according to ICCO, Indonesia’s cacao production will record the highest decline. Cacao harvest in Indonesia, as world’s third largest cacao producer, is predicted to decline to 510,000 tons from 550,000 tons.

Two factors that cause increase of cacao harvest are: firstly, improvement of climate condition. Secondly, high cacao price which encourages farmers to grow more cacao. Price of cacao once touched its highest level in the past 32 years, latest on March 4, 2011, at USD 3,775/ton.

Meanwhile, the Indonesia Cacao Industry Association (AIKI) predicted that number of fake cacao powder circulating in Indonesia reaches 5000 tons a year. This condition causes losses to industry as price of fake cacao powder is 50% cheaper than the original one. Fake cacao powder is processed cacao shell. Unsterile cacao is frequently spoiled, and the processing of cacao beans uses fumigation which involves the use of chemicals. WHO has declared that fake cacao powder is unfit for consumption.

Currently, total national production of cacao processing industry reaches 280,000 tons/year. From this amount, domestic consumption only reaches 40,000 tons, and the remaining is for export. Domestic consumption of cacao powder is low or only 0.06 kg/capita. This rate is much lower than in Europe which reaches 10 kg/capita.

Goverment Policy Encourages Producers To Change Role To Traders

The industries complain about government policies which do not favor them. Policy of import duty is considered to reduce competitiveness of domestic products and will finally encourage producers to shift role to importers or traders. Chairman of Indonesian Young Entrepreneurs Association (HIPMI), Erwin Aksa, regrets about government policy in industry which does not favor producers. Consequently, producers change role to traders which are considered more profitable. He gave an example of import duty policy where the government imposes import duty on raw materials not produced domestically, while finished products are exempted from import duty.

According to Erwin, the potential change of role to traders has been evident. Moreover, if it is not accompanied with incentive policy that could boost industrial growth. While, in fact, there is a rampant inflow of Chinese products. Erwin said that the application of ASEAN-china Free Trade Agreement (ACFTA) has forced domestic players to come face to face with industries from a country which is designed to supply global demand.

Survey the ministry of industry on national businesses and consumers shows that domestic products started to decrease. While, many domestic industries are supplying to meet demand of one country. While, Chinese industries receive and tax reduction. “in such a condition, it is understandable if many national business will change role to importers. By becoming importers, they will not bear any business risk”, he said.

Erwin regretted the attitude of the business or producers who recently changed role to importers of products from china and india. Local producers should be the host for domestic products. He predicted that import of Chinese and Indian products will probably become a trend in 2011. He explained that producers who changes role to  trades are mostly small and medium businesses. Many of the imported products sold are garment, handicraft, food and beverages, and furniture.

The above condition confirms that de-industrialization could happen in the future. Erwin explained that currently, Chinese industries experience overproduction as its main markets, namely United States, Europe, and Japan are in sluggish condition. In addition to boosting domestic consumption, China also seeks new potential markets, and one of them is Indonesia. So, flow of cheap products from china will increasingly flood the Indonesian market.

To curb the shift of role from producers to traders, according to Erwin, the government must determine the direction of the national industries. He also explained that raw material guarantee and capital access will significantly affect the success of domestic industries. Moreover, bank interest rates domestically are high if compared to China. Guarantee of market and commitment to use local products are also necessary.

Indonesian Batik Can Hardly Be Duplicated By Other Countries

Batik handicraft, which has recognized by UNESCO as one of world cultural heritage, is constantly developing in line with development of time. But, not all of the development is going smoothly, for a few times-times it faces challenges, such as increase of price of raw material, removal of subsidies on kerosene, and application of ASEAN-China Free Trade Agreement (Ac-FTA).

Following the application of AC-FTA, many industrial products from China flooded the domestic market, and it causes a blow to Indonesian industrial sector. Batik crafters are trying to anticipate all challenges and to survive in the midst of surge flow of similar products from China which are continuously flooding the market.

Chairman of Indonesian Textile Association (API), Ade Sudrajad, was still optimistic that until now, Indonesian batik is still able to compete with similar products from China. According to him, Indonesian batik has a very excellent traditional value therefore it can not be duplicated by any other country.

He explained that Indonesian is a Batik Country so there is always enthusiasm to create batik. Chinese batik made of polyester does not have any influence. Chinese batik and Indonesian batik have different characteristics. For example, in terms of design, Chinese batik is more dominant as China’s import is not in the form of fabric, but in the form of clothing.

According to I, batik must be full of innovation, especially innovation in design and technology. In the future, it is expected that batik is not only made of cotton, but also of rayon fiber, pineapple fiber, banana fiber so it will have an added value in a conventional way. With a single touch of creative crafter, it will add to the national batik motifs.

To promote the batik industry, according to him, the government should facilitate promotion, domestically or internationally. For example, by participating in exhibitions and opportunities to seize foreign market. This industry requires a high level of creativity to be able to compete with batik produced by other countries.

He admitted that so far, there is no standard requirement for batik. So, batik cannot be monopolized by Indonesia as long as there is no patent right registered. So, if other countries make a batik design, it can not be prohibited. To anticipate this matter, we should use creativity, design, and improve the excellent values that should be improved. We should not be concerned about this, if the batik industry improves, the ability to design hand-crafted batik (batik tulis) can be sustained. And this is our strength, he said.

Inflation Down In May

Head of the National Bureau of Statistics, Rusman Heriawan, stated on Thursday that inflation will come down in May and deflation will still occur due to continuing paddy grand harvest.

This will give an opportunity for Bank Indonesia not to increase interest rate to promote economic growth. Bank Indonesia will let the Rupiah’s appreciating trend to continue in order to solve imported inflation and recent surges of capital inflow.

Basically, there is a potential deflation. Grand harvest is still going on, price of rice does not increase, but the decline is happening slowly, he told journalist at the presidential palace on May 19, 2011.

Annual inflation in April 2011 down to 6.16 percent in March 2011. On month-on-month, in April 2011, deflation occurs at a rate of 0.31 percent after it touches 0.32 percent in March 2011.

Core inflation excluding oil and food prices-reaches 4.62 percent in April 2011 after it touches 4.45 percent in March 2011. Increase of chili and rice prices has caused annual inflation to record a highest increase to 7.02 percent in January 2011.

Bank Indonesia has maintained interest rate for a third straight month on May 12, 2011 after increasing interest rate by 25 basis points to 6.75 percent on February 4, 2011.

Ranking of Ten Banks Based on Credit

Tight competition between company banks and national private banks in throwing out credit to the business world and the public had been going on since 2007. shift of ranking was inevitable. PT Banks Mandiri, Bank BRI and Bank BNI which for many years had always been in 1^st, 2^nd, and 3^rd position by end of 2008 were now repositioned. Bank Mandiri which ranked first was replaced by Bank BRI and Bank BNI which ranked third dropped to number four while the third place was occupied by BCA. The 1^st, 2^nd and 3^rd position remained unchanged till end of December 2010. data released by Bank Indonesia had it that the total credit extended by 122 general banks by end of 2010 totaled Rp 1,766,184 billions.

            

Business News source disclosed that for the most part general banks and high strata national private banks were enhancing credit extension for consumptive use like mortgage, motorcar and motor cycle buying, credit card etc rather than for working capital or credit investment. The cheap fund as “bullets” that they shout out were initially collected from Giro products and savings account whose I interest rate were low, as low as 1.0% to 2.5% per annum including extravagant prizes like tens of fancy cars, hundreds of motorcycles etc, meanwhile company banks (stated owned) especially Bank Mandiri, Bank BRI and Bank BRI exercised the same policy but were only notable in 2006. hence total profit made by Bank BCA each year were close to total yields of Bank Mandiri and Bank BRI. However based on return on Assets calculation Bank BCA turned out to “excel” because the total asset was way below that company banks.

House Support Stringent Action On Tresspasising Foreign Fisherman

Head of the board of Inter Parliamentary Cooperation Muhammad Hidayat Nurwahid stated that the Parliament supported the state’s souverignity over the Indonesian waters. Therefore it became imperative for the Indonesian government to put sanctions on Malaysian fisherman stealing fish on Indonesian waters. If there were law enforcements, it was not because of revenge but because of trespasses over Indonesian waters.

Whoever breaks into Indonesian waters territories not just Malaysian fisherman but trespassers from anywhere at all, must be detained and undergo legal process according to the rules and regulations of Indonesia.

In the event that foreign fishermen had actually broken into the Indonesian threshold, supposedly the related foreign government respected indonesia’s rights and not out Indonesia under question instead.

The most important thing was that the Indonesian government could prove that the foreign fisherman had trespassed across the borders of Indonesian waters and therefore deserved to be legally sanctioned. If there were any elegant ways by both parties to settle the dispute, it was always welcome. But the law should be upheld. If law were not enforced and the spirit was only based on neighborhood friendliness, it might trigger more violations in the future.

Because the foreign fisherman had trespassed borders, they became subject to Indonesian law. Law must be enforced in Indonesian on any citizen of any country including Malaysian fisherman breaking into Indonesian waters where Indonesian law is supreme.

PLN and PT PAL Collaborate To Build CNG Natural Gas Storage

In line with the effort to step up quality and capacity of electricity supply in central Sumatra, particularly in the province of Jambi PLN collaborate with PT PAL Indonesia (persero) in installing the compressed Natural Gas Storage (CNG)  to be used for supplying the need of peaking in Jambi. M o U for that collaboration was signed by the president of PLN Dahlan Islan and president of PT PAL Indonesia Harsusanto at the PLN Headquarters on Monday.

Building of the CNG storage in Jambi was aimed at securing gas supplies to peaking generator to increase power output during peak time (peaker). “today the average duty during peak time of electricity consumption in the province of Jambi was around 286 MW with total number of customers posted at 246,395” Dahlan Iskan remarked.

Jambi holds abundant resources of natural gas which can meet the great demand for power by peaking installations based on compressed Natural Gas Technology. (NNG) this technology processes gas pressurizing during off peak time hour (LWBP) and condense it into a Cylinder Tank Gas Container. During the peak burden hours, gas would be pipelined into the generator.

 
Soon the CNG plant installation and peaking center would be built as close as possible to the location of Sei Gelam 1 gas resource with production capacity of 21.5 mmcfd to be connected with Sei Gelam well 2 at the capacity of 2 mmcfd through pipelining 10.5 km long. Gas supply form these two wells have the capacity to supply gas for peaking generator at 80 MW strong. The power generated would be channeled to electricity network in central Sumatra though transmission network 150 KV of Sei Gelam 1 to Aur Duri for 30 km long.

Four Of 12 ASEAN Connectivity Projects Ready To Be Built

Indonesia will build four of 12 ASEAN connectivity projects with a total investment of more than USD 400  millions. Coordinating Minister of Economy, Hatta Rajasa, said.

          

 Two of the four connectivity projects are part of indonesia’s economic Development Acceleration and Expansion Masterplan (MP3l), namely power plant in Riau with a network coverage up to Malaka, and 150 kv power transmission project in Sanggau (west Kalimantan) – serawak (Malaysia). “two projects which have been set forth in the masterplan be completed by end of this year, especially power transmission project which is awaiting completion, so that in 2012 it can be operated.

           

While, two other projects, namely rehabilitation of roads in the border area with 150 km length and construction of toll road connecting Bitung-Manado are new projects which are still being discussed until now.

Hatta added that the Indonesian government has the intention to develop ferry port and ferry transportation from Sumatra to Malaysia to ease the flow of sea traffic between both countries.

 
The 12 projects cost USD 1.2 billions, which will be founded by Asian Development Bank (ADB), ASEAN member countries, and ASEAN partner countries such as japan, korea, and Taiwan. “funding will comes mostly from ADB and ASEAN member countries”, said Hatta.

Forests Concession Not To Be Expanded

Today the area of forest Exploitation Rights (HPH) totaled 26 million hectares. “we just lock it up” 26 million hectares is enough and there will be no new permit for HPH. The HPH in effect today is operational and HPH holders are asked to exercise Intensive Silviculture so the productivity of forest as wood resource can be maintained without expanding timber area” Minister of Forest Zulkifli Hasan was quoted as saying.

Intensive Silviculture means replanting of trees amids timber areas. Cleared areas are immediately filled with local tree I,e. Merbabu, Meranti, Ulin etc. a big company had practiced this Silin and was evidently successful. HPH right is only permitted for restoration, i.e. to embark on a forest already damaged to be rehabilitated.

Primary forest and peatland may no longer be developed. This could mean that the government ignore economic growth for the sake of environmental conversation. “there are still 12 million hectares of neglected land without trees grown. Every investor who need expansive land like palm plantations or industrial forests are driven to idle or neglected land” the minister said.

Besides there was still Conversion Production Forest (HPK) which were convertible. According to the law, HPK may be released by the Ministry of forestry for cultivation projects. “ I will be very selective about releasing HPK. If a certain forest area is damaged and treeless, they would be released. But if the forest is thick I will defend it in spite of HPK status. Kindly find neglected land and do not disturb green forests” the minister said.

The ministry of forest also support government’s effort to be self supporting in food. They admitted that the gowing population needed more food but the present condition of land was not spacious enough to accommodate growing agro industry for food. Therefore agriculture needed additional space for food plantation; for that matter plantation projects were being developed like the Merauke Integrated Food Estate and Energy (MIFEE).

Of the total space of 1.3 million ha requested by the ministry of Agriculture, only 600,00 ha can be procured by the ministry of forestry. All of the expanse of land to be released are cleared land (treeless lend) so investors who will enter need not to cut any tree.” I hope that the investors who plan to build suigarcane plantations and sugar mills quickly realize their projects. There are 40.000 ha of land suitable and ready for use as sugarcane plantations. We support the idea to make Merauke as national rice  barn” the minister remarked.

In regard to Papua, according to the minister of forestry, there were 19 investors who were interested in using land for industrial forest, palm plantations of sugarcane plantations but when they were driven to exploited ex HPH land they stepped back. This indicated that in fact they were simply going after woods, because what there demanded was freshly green forested land, and were not interested in used land. Zulkifli was highly expectant that the companies who remained would realize their investment projects. “to remain in used land indicates that investors are serious about running business in the line of business they choosed and not going after woods” he said.

In 2011 the Ministry of Trade Revitalizes 10 Model Markets

In the midst of the growing number of supermarkets, the government is promoting increase of competitiveness of traditional markets. One of the attempts is by developing model markets. Besides model markets, the government through the ministry of trade also performs revitalization of traditional markets. Model market is a multi-aspect market, meaning that in addition a center of trade and economy, model markets must be in a good condition physically, such as clean, healthy, hygienic, safe, comfortable, and environment friendly.

Gunaryo, the director general of domestic trade of the ministry of trade, said that the government has allocated Rp. 88 billion budget for construction and revitalization of 10 model markets in 2011. He explained that the central government jointly with the regional government has also provided budget for improvement of capacity of traditional markets and management of traders’ behavior.

The 10 model markets are planned to be constructed in Samosir (North Sumatera), Pacitan (East Java), Purwerejo (Central Java, klaten, (central java), pasar agung (Bali), Bantaeng (South Sulawesi), Takalar  (South Sulawesi), Sikka (East Nusa Tenggara), Bengkulu, and Papua. According to him, the model markets are expected not only as a center of trade, but also as a place for interaction among people. Construction and development of management of model markets, he said, is conducted to create a traditional market which is clean, safe, and comfortable.

Gunaryo also explained about the ministry of trade’s police, amongst other, concerning development of traditional markets, where the criteria of a traditional market are, amongst other: firstly, availability of price bargaining system; secondly, quality of goods purchased can be suited to buyer’s expectation; thirdly, the commodities sold are owned by traders.

Market revitalization has been programmed by the ministry of trade since 2005 to 2011, and 1,285 markets already revitalized. He said that if in 2011 there are 10 model markets, in 2012 the number will increase to 20 model markets, in 2013 to 23 model markets, and in 2014 the number will reach 25. So, it is expected that in 2011-2014 there will be 78 model markets which are expected to become a standard for development of markets in Indonesia.

Each region has its own unique qualities based in the tradition of the local society. Gunaryo expects that the model markets will have a good management system and will pay attention to the proper way of handling wastes, cultural and historical backgrounds. His party has coordinated with other ministry of health which launches healthy markets program. The coordination is expected to be more comprehensive so it not only covers physical development but also sustainable management.

Commission V of House Aggrieved by Empty Apartements in Nunukan

The technical team of commission V of parliaments was shocked and aggrieved to see that the modest apartments at jalan ujang dewa, district of south nunukan, regency of nunukan, east Kalimantan were without occupants although they had ben there since 2005. This was disclosed by chairman of commission V of house, joseph umarhadi upon inspecting the rusunawa apartments.

J

oseph rated that the building of rusunawa apartments, which was financed by the state budget had been a waste. Two blocks PT. rusunawi was built by the directorate general of cipta karya, ministry of public works. In view of that matter commission V of house had urged the government through assistant of the ministry of public housing to solve the problem. The rusunawa was supposed to be occupied by people of the low income group. Supposedly the building was not let to be damaged and go a waste.

In the beginning the rusunawa apartment was intended for Indonesian migrant workers who were Malaysia bound, considering that nunukan was ideally located near the borderline.

At that time the number of migrant workers in nunukan exploded to 100.000 people or more. When building of the apartment was completed, there was a new policy ran by the central government which relocated the place for document extention application of workers from nunukan to the consulate general of RI at Tawau, Malaysia.

Amendment of Law on Food Must be Fundamental

Food is Man’s primary need, therefore amendment of Law no 7 year 1996 (BN No 5934 page 208-258 etc) on food must be fundamental. Food satisfaction is part of man Individual Right. Fulfillment of need for food is most important as basic component for building high quality human resources.

Deputy chairman of commission IV of House Anna Muawanah told business news that food procurement at national and regional level was no guarantee for food resiliency or individual. This was because apart form food availability food resiliency at household/individual level depended highly on their access to food. In this case family income and purchasing power was a decisive factor in access to food.

Law no. 7 year 1996 on food is still very general and highly focused on food industry. In the implementation of the law there are still many obstacles such as in law enforcement, mostly sanctioning which are relatively light, not creating any deterrent effect on the law breaker.

Amendment of Law no 7/1996 on food is aimed at solving problems in food often in regard to quality of food, the content, production process, packaging, halal labeling, and most of all to maintain supply sufficiency, and to run fair and even distribution mechanism at affordable price to the people.

Meanwhile the president of PT Rajawali Nusantara Indonesia Bambang Proyono gave his input for the amendment of law no.7 year 1996 on food and proposed to include the global climate posed as a crusial factor to food production. In 2010 rain fell all year through causing sugar production to drop drastically. Therefore it was important to include climate change factor in the amendment of law no 7 1996 on food.

With the law on cultivation system, now farmers have a freedom to decided whatever plant to cultivate as long as they are regarded as profitable. Consequently sugar mills must come up with certain motivation steps like extending incentives or aid to encourage farmers to remain to plant sugar canes.

Marine Based National Development Needs Reorientation

Vice chairman of House’s Budget Agency, Tamsil Linrung, said that reorientation is necessary for marine-based national development. Indonesia can become the largest fisheries country in the world with total potential of fisheries product at around 65.1 million tons/year. China, which is currently the largest fisheries production of only not more than 60 million tons/year.

The high potential is not yet balanced with achievement in the form of acquirement of foreign exchange revenue and contribution to the national GDP. Until now, contribution of fisheries sector to GDP is only 25%.

While, macro structural factors are related to high interest rate of bank loan, which is around 14% a year. As a comparison, interest rate of bank loan in Malaysia, Thailand, and the Philippines  is only 3.78%, in Australia 3%, and in japan 0.5%. in conclusion, political economic as well as fiscal and monetary polices currently are still oriented toward economic activities on land, and are less oriented toward economic activities in marine and fisheries sector.

There should be a minimum of 5 strategic steps to be taken in Indonesia’s fisheries development. Firstly, it must be made sure that the fishing intensity (number of fishing boats and fisherman) operating in each water territory shall be at optimal level, not exceeding the maximum sustainable yield (MSY).

Secondly, productivity and efficiency of the existing marine and brackishwater culture must be improved by applying Good Aquaculture Practices in accordance with supportiveness of the surrounding environment. Thirdly, infrastructure and production facilities for capture fisheries as well as culture based fisheries must be provided in accordance with the needs in each fisheries areas throughout Indonesia.

Fourthly, credit program with low interest rate and softer requirements for marine and fisheries sectors, like in Malaysia, Thailand, india, Vietnam, china, and business safety should be more conducive and attractive.

All public (political-economic) as well as fiscal and monetary policies, export-import, educational, science & technology, and regional autonomy policies must support marine and fisheries development through reorientation of marine and archipelagic based national development.

NEDO-PTPN X Bioethanol Factory Will Start Production 2012

Bioethanol factory under partnership scheme between Indonesia through PTPN X and japan through the new energy and industrial technology development organization (NEDO) grant aid. The factory is expected to start operation in February 2012. According to president director of PT Perkebunan Nusantara (PTPN) X, subiyono, who is accompanied by the manager of bioethanol project of PTPN X, Nur Iswanto, after signing of implementation Document (ID) of the partnership project in Jakarta on Thursday (April 21), the factory is planned to produce 30,000 kilolitres of bioethanol a year. Bioethanol production will be distributed to pertamina. Yet, however, if bioethanol production cannot absorbed by domestic market, some trading companies from overseas will buy the bioethanol. We will try to produce added value in the production of sugar factory Gempol Mojokerto owned by PTPN X. his project is considered feasible due to sufficiency of raw material, financial capacity, human resources, technology, and a willingness to do dissemination in the implementation of this project model” subiyono said. Director general of manufacturing industry base of ministry of industry, panggah susanto, said “the concept of sugar factory intefrated with a bioethanol factory is the model of a modern sugar industry through the creation of added value of agricultural products from the upstream to the downstream sectors” On August 2, 2010, a memorandum of understanding (MoU) for bioethanol production was signed is in the form of USD 16 million grant from the Japanese government and USD 9.5 million contribution from Indonesia. Until now, a major part of molasses production is sold as export commodity in crude form, and is not yet utilized optimally as raw material for industry, amongst other, chemical and cosmetic industry. With a purification process, molasses can be used more optimally as raw material for industry. Another aspect of the partnership is a potential claim about attempt to reduce carbon emission in the framework of Certified Emission Reductions (CERs). Reduction of carbon emission as a result of bioethanol production which will reduce consumption of fossil fuel. Claims of carbon credit under the partnership project will be submitted to the United Nations. And if it is approved, Indonesia will be considered positively by the international community.

JAMSOSTEK Workers Welfare Insurance Build 7 Apartment Blocks In reply to: Batam

PT Jamsostek had begun to build seven twin blocks of Rusunawan flats in the industrial area of Kabil, batam to complement 3 previous Rusunawa already built and ready in the same region.

Laying on first stone had been done by the Mayor of Batam Achmad Dahlan, president of jamsostek Hotbonar Sinaga, commissioner of KTTB Chris Wulan and other related parties by scooping sand together upon the building foundation at the integrated industrial estate at kabil (KITTB) in batam on Friday.

The stone laying ceremony was followed by stone laying for building sports facilities, mosque, multi purpose building, office building and shopping center at KTTB. In the background were six existing twin towers, three Jamsostek with specific color (green and white) and three other units by other developers.

Hotbonar said that the three twin block were expected to be occupied by workers this May 1^st coinciding with Labor Day commemoration. The Jamsostek Rusunawa apartment belonged to good living rental category.

Funding for these Rusunawa apartmet project was taken from workers welfare promotion fund (DPKP) allocated at Rp 150 billion. The DPKP itself originated from 5 percent of PT Jamsostek’s profit of 2010 amounting to Rp 1.5 trillion. Mean while the total asset managed by PT Jamsostek at the moment was worth Rp 100 trillion. “ I hope the head of state would inaugurate these seven apartment blocks by end of year” Harbonar remarked.

Ten twin blocks of apartments could accommodate 8000 workers. Jamsostek members at Kepri numbered 250,000 people. Batam’s mayor Dahlan stated that Batam still needed 75 twin blocks of Rusunawa by 2012 to cope with population growth. By 2009 there were already 52 blocks, by 2010 ten twin blocks would be built, in this year 2011 15 twin blocks would be buit. So by 2012 there would be 75 twin blocks in existence.

Meanwhile Chris explained that when KTTB was developed 20 years ago, the area was still swamps. Kepri’s potential was great including the Natuna gas project expected as supporting factor. KTTB was 500 hectares wide, had sizable water reservoir to supply water for the industry. The management of KTTB also facilitated workers’ need in this 10 hectare space. 27 towers would soon be built.

Plywood Producers in East Kalimantan Unable to Meet Japan’s Demand

Plywood producers in east Kalimantan were having a landslide of order from Japan, who after the tsunami disaster were in need of plywood in enormous quantity for reconstruction. Price of plywood jumped up to USD 900 per cube M, a price record never reached before. Taufik, manager of the association of Indonesian wood producers stated in Jakarta.

Regretfully the big demand could not be fulfilled by plywood producers in west Kalimantaan. The main problem was the raw material. The best kind of wood to be processed was Meranti, but this type of wood was scarce and producers found it hard to get supply. Meranti wood could be substituted with Sengon wood quality was not the same. The USD 900 was the price for Meranti wood while Sengon wood was cheaper.

Data of Apkindo had it that demand for Indonesia wood for post-disaster rebuilding projects in Japan rose by 30%, but Indonesia wood exporters were unable to fulfill. Maximum capacity of Indonesian wood export to Japan was only 10% of total need of plywood in Japan. The demand for plywood in Japan was 8 million cube M while Indonesia could only supply 1 million cube M.

In Indonesia’s timber industry today, there were only 40 companies still operating another 90 companies had stop operations due to shortage of raw materials, or mis-management, or crisis etc. as Indonesia were unable to fulfill this great demand. China and Malaysia would grab the opportunity.