PRIVATE FINANCING FOR CONSERVATION OF TRADITIONAL ART AND CULTURE

The Ministry of Education and Culture (Kemendikbud) was still scheming up format of fund raising for conservation of Indonesian Arts and Culture whether for corporate, individuals or communities. Participation in funding was spontaneous, especially by those who were concerned about Indonesian arts and culture. “Total EP, a French gas company, spontaneously supported the Wayang Festival. The categories were also adjusted to the capacity of donator from the lowest level to the highest” Deputy Minister of Education and Culture Wiendu Nuryanto disclosed to Business News (16/7).

The Minister claimed to have raised almost Rp 5 billion spontaneously from community group who called themselves Borobudur’s Firend. Fund raising was also in tandem with cleaning campaign of temples as national heritage including the Borobudur temple. Temples of Central Java were once covered with dust and sand when the Merapi mountain erupted in 2010. The Japan International Corporation (JICA), Garuda Indonesia, Freeport, the Embassies of the Netherlands, Germany and the USA joined company to jointly assist conservation program for culture and temples in Indonesia. “Perhaps a campaign would be necessary to stimulate interest so all initiative need not have to end here” Nuryanto remarked.

The Ministry was optimistic about fund raising plan. In the past few months, even in the past two years, role of the private sector was getting more visible in traditional art cultural performances. Besides the Ministry could feel free to coordinate educational and cultural activities. In the past, when the domain of culture was combined with tourism under the Ministry of Culture and Tourin (KemenbundPar) there was a missing link. “Now the elements are linked, we can perform better, because culture as best to be introduced to the public through education, including elementary schools” Nuryanto was quoted as saying.

Indonesia, having succeeded in propagating batik to the would, was now having another homework: to propagate wayang (puppet show) to the world. At home, the task to encourage the young generation to love wayang traditional culture was not easy. Batik, gamelan, the Saman dance from Aceh, had been acknowledged by the UNESCO cultural organizer of the UN.

Meanwhile effort to conserve wayang culture could not be done partially by the Ministry of Education and Culture alone because the interest overlapped with other institutions, especially the Ministry of External Affairs. Batik, the genuine Indonesian heritage had yielded revenues of 300 percent. The Ministry of Culture was now promoting wayang up to the same performance level of batik. “We feel sure that every staging of cultural performance had its economic impact” Nuryanto remarked.

For the short term, the Ministry of Education and Culture would recommend Government and private institutions to use more traditional items a souvenirs. For example souvenirs for Government servants on their day retirement having served for decades were usually awarded farewell souvenirs; the Ministry of Education would propose that the souvenirs would be in the form of wayang, or Kris dagger, or other specific items. The way it had been, souvenirs had always been of modern outlook. In this case the Ministry of Education and Culture would work in synergy with other ministries or institutions. “In short, we are optimistic. Recently we had been visited by young Indonesians who had stayed for a long time in Japan. They came to introduce 16 digital applications of wayang and gamelan. We highly appreciate innovative efforts of the young people, they had shown that wayang and gamelan could be developed with digital technology from Japan” Nuryanto remarked.

Meanwhile the Foundation of Total Devotion to Indonesia’s Cultural Heritage saw that cultural staging in Jakarta Old City was most appropriate. The three day festival (July 13-15) had its positive impact on lower-middle economic players especially the street hawkers. “The festival was a sudden event. Two or three days before H-Day we were proposed to stage a festival at the Jakarta Convention Center (JCC) but we refused, because the place was not down to earth and far from the small people, who were more found around the old town” Eddy Mulyadi, Chairman of the Bhakti Total Foundation told Business News (16/7). We learn from experience in 2011. The same festival was run again this year at the open space of Taman Fatahillah Park in old town where merry people’s party took place. Visitors and hawkers were equally happy.

The foundation built Vision of Indonesian Art of Wayang, especially for the young generation. Activities or revival and conservation of culture would be carried out all over the country. Without these endeavors, it was not impossible that Indonesian art of wayang would extinct; a wayang festival in old town depicting classical or contemporary wayang would be most appropriate in the present condition.   

 Business News - July 20, 2012

CORRECTION OF ECONOMIC GROWTH PROJECTION 2012

Bank Indonesia had officially cut projection of Indonesia’s economic growth from the previous 6.3% - 6.7% to economic growth from the previous 6.3% - 6.7% to 6.1% - 6.5%. Bank Indonesia argued that, adverse global economy was beginning to affect Indonesia’s performance in overseas trading to affect Indonesia’s performance in overseas trading so economic growth would be less than previously projected.

With reduced export, Indonesia’s economy which was projected to grow by 6.3% in quarter II 2012 was now projected to grow at around 6.1% - 6.5% in 2012. BI was resolved to keep watch on global economic trend which was showing downturn and clouded by deep uncertainty.

Solution of crisis in Europe might still take a long time to accomplish in spite of some notable progress at the European Union summit sometime ago. Worsened global economy had its impact on correction of economic growth projection of some Asian states like China and India who were Indonesia’s trading partners.

Meanwhile global commodity prices, including import price, continued to decline in line with declining world’s demand. Nevertheless Indonesia’s economy was still predictably strong thanks to domestic demand, including domestic demand and high growing investment.

All sectors were predicted to grow satisfactorily. The sectors which were expected to be the main propeller of economic growth were among others transportation and communication, trading, hotel and restaurants and industry.

Revision of economic growth projection by BI was rated as reasonable and even slightly ambitious, because the ceiling of growth estimate ambitious, because the ceiling of growth estimate at 6.5% BI was felt as not reasonable considering that some other countries were cutting their economic growth projection in grater magnitude.

Even China whose growth rate last year was still 9.5% only sets target at 7.5%, while the growth performance in first quarter of 2012 was 8.1%. India was even worse: in quarter I growing only by 5.1% while inflation was 10.4%. SO if the Government of RI sets growth higher than last year (6.5%) it seemed totally not reasonable.

Many analysts and economists estimated Indonesia’s economy this year would grow less, i.e. in the range of 6.0% - 6.3% as moderate level. The point was, it was good enough to grow at least by 6% alone.

Correction of Indonesia’s growth projection by BI was in line with latest revised overview by the International Monetary Fund (IMF) on the world’s economic projection. IMF lowered projection of global economic growth from 3.9% in 2011 to 3.5% in 2012.

Projection of economic growth of developed nations were eroded from 1.6% in 2011 to 1.4% in 2012. Economic projection of European states dropped from 1.4% in 2011 to minus 0.3% in 2012. Asian countries as emerging states also had correction on their economic growth projection from 6.2% in 2011 to become 5.7% in 2012.

However IMF predicted economic growth of the world, Europe and Asia would revitalize by 2013 in line with reformation effort on Europe’s debt crisis through various therapeutic measures.

The bail out program for Greece and Spain were expected to speed economic recovery in Europe, moreover in addition to the austerity plan run by bail-out receiving countries.

Simultaneously the process of economic restoration in America to rescue the country from fiscal trap was showing result, moreover the measures would generate positive sentiment to the Asian region.

Economic restoration in Europe, America and Asia would jack up world’s trade volume to above 4% in 2013 after having growth correction at 3,8% in 2012. Transaction of international, multilateral and bilateral trading would be revitalized. Trade finance activities would be revitalized as well. Production capacity would be restored to normal so unemployment could be minimized and poverty figure would be downsized.

 Business News - July 20, 2012

RUPIAH AND IHSG STAND A CHANCE TO STRENGTHEN AS BI RATE SETTLES

The Moneymarket

Rupiah exchange rate value against USD last Thursday (12/7) was closed to weaken by 30 pints (0.31%) to the level of Rp 9,440/Rp 9,450 against the previous position of Rp 9,410 – Rp 9,420. Weakening of Rupiah was on account of negative external sentiment where there was mounting anxiety of global economic slowdown. The sentiment was triggered by release of minutes of The Federal Open Market Committee (FOMC) which stated that the Fed had slashed America’s growth percentage for 2012.

Assumption of America’s GDP was lowered to the level of 1.9% to 2.4% against the previous target of 2.4% to 2.9% for 2012. Consequently Rupiah reached its lowest position of Rp 9,480 and strongest level of Rp 9,430 per USD.

At the same time Bank of Japan (BoJ) also slashed economic growth rate of Japan. Assumption of Japan’s GDP was also slashed to become 2.1% for 2012 against the previous assumption of 2.3%. The same was with Bank Indonesia who slashed Indonesia’s economic growth rate from the range of 6.3% - 6.7% to the level of 6.1% - 6.5% for 2012.

Furthermore Rupiah was also having negative pressures from lowered interest rate by the Bank of Central Korea and Brazil who also expressed investor’s anxiety over the present global economic condition. The South Korea Central Bank lowered their interest rate by 0.25% to the level of 3%, while the Central Bank of Brazil lowered their benchmark rate by 0.50% to the position of 8%.

Anxiety over adverse condition in Europe also worsened as Italian Prime Minister stated the possibility of Italy needing bail out at unpredictable time. Global economic condition was getting less favorable as economic data released by Australia also made sentiments worse.

Unemployment level in Australia rose to the level of 5.2% for June 2012 against the previous 5.1%. All the negative sentiments strengthened position of USD and posed as pressure on rival currencies particularly those in Asia including Rupiah.

All in all Rupiah strengthened against main currencies including Euro. Index of USD strengthened to 832,589 against the previous 83.568. Against Euro USD strengthened to USD 1,2211 against the previous position of USD 1,2236 per Euro.

Bank Indonesia noted that accumulatively Rupiah exchange rate value in Quarter II-2012 was still depreciated. However BI assured that the depreciation was still within controllable volatility compared to previous quarter. According to BI Governor Darmin Nasution, that Rupiah was under control was thanks to stabilization policy adopted by BI.

On point-to-point basis Rupiah weakened by 2.65% (q to q) to the level of Rp 9,393 per USD or weakening by 2.17% (q to q) on the average to become Rp 9.277 by end of June 2012. Pressures on Rupiah was caused by crisis in Europe which increased demand for USD as related to rebalancing of portfolio by non-residential players. Besides, demand for USD at home also increased due to increased import.

In this case BI continued to take measures to maintain balance of foreign currency market or development balance of foreign currency market or development of foreign currency as instrument to fundamentally stabilize Rupiah value in line with moving curveline of currencies of the Asian region.

Only trouble was, BI had to slash Indonesia’s growth projection from the previous 6.3% - 6.7% to become 6.1% - 6.5% in line with worsening global economic condition. With declining export, economic growth by quarter III-2012 was estimated to be 6.1% - 6.5% or in the range of 6.1% - 6.5% in the entire year 2012.

It was only reasonable for BI to be on the alert of global economic trends which were signified by notable downturns and uncertainty; crisis in Europe might need a long time to recover in spite of signals of progress from the European Union Summit sometime ago.

Weakening of global economy had its negative impact on growth of Asian states like China and India who were Indonesia’s trading partners. Meanwhile prices of global commodities including prices of imported goods continued to drop in line with lessened global demand.

Somehow BI signaled that Indonesia’s economy would remain strong thanks to domestic demand whether consumption or investment which were satisfactorily growing. All sectors were predictably growing well. The sectors which were expected to be the propeller of economic growth were among others: transportation and communication, trading, hotel and restaurants, and industry.

Revision of economic growth projection by BI was rated as natural but a little ambitious, because by maintaining growth rate above 6,5% was rated as unrealistic to consider that many other countries were slashing their growth projections percentage in large magnitude.

China whose growth target last year was still 9.5%, this year set target at only 7.5%. Meanwhile China’s growth performance in quarter I of 2012 was 8.1%. India was even worse, in quarter 1-2012 only grew by 5.1% and inflation was 10.4%. If China and India – who used to have high growth record had to be severely corrected this year, it was completely not sensible for Indonesia to set target growth higher than last year’s 6.5%.

Many analysts and economists estimated Indonesia’s growth this year would be much lower than expectation, in the range of 6.0% - 6.3%. The principle was: as long as growth was 6% it was good enough.

Based on BI’s mid-rate last weekend, Rupiah was traded at the level of Rp 9,403 per USD or weakening by Rp 20 against the day before at Rp 9,383 per USD. To consider BI’s policy which maintained BI rate at 5.75%, Rupiah weakening could be kept from falling any further so it was reasonable if there was room for Rupiah to strengthen this week in the range of Rp 9,375 – Rp 9,450 per USD.

BI was suspected to tightly safeguard Rupiah value by making intervention at the moneymarket. This was indicated by the position of forex reserves which shrunk to the level of USD 106.5 billion by end of June from USD 111.53 billion by end of May 2012. The amount of forex reserves was still sufficient to finance five months of import and paying Government’s overseas debt. The figure was stipulated by the International Monetary Fund (IMF) who stipulated that forex reserves must be at least enough for financing three months import and paying Government’s overseas debt. Besides BI’s intervention at the moneymarket, lessened forex reserves was also caused by export value which was showing downturn in the past few months.

The Capital Market

Index of IHSG last Thursday (12/7) dropped by 35 points following acts of profit taking by foreign investors. Many of foreign commodity shares were released by foreign investors. IHSG was closed to fall by 35.013 points (0.88%) to the level of 3,984.120 Meanwhile index of LQ45 was closed to weaken by 8.210 point (1.20%) to the level of 680.861 while index of Jll fell by 1.5%.

Downturn of index was triggered by shares of the mining sector which dropped by 2.2%, followed by shares of the industrial sector 1.8% and shared of the basic industry sector 1,7%. Strengthening was only in the infra structure sector 0.07%.

Meanwhile shares of the Wall Street stock-maeket ended weak on account of warning that there would be slowdown in performance of technology-based existents, rally of shares of Proctle and Gambler served as supporter to Dow Jones.

Index of Dow Jones weakened by 31,16 points (0.25%) to the level of 12,573.27. Index of Standard & poor’s 500 dropped by 6,69 points to the level of 1,334.76 Index of Composite Nasdaq lost 21.79 points (0.75%) to the level of 2,866.19.

Meanwhile movement in the regional stockmarkets were varied: index of Nikkei inched up by 8.01 points (0,09%) to the level of 8,728.02 and index of KOSPI strengthened by 4.64 point (0.26%) to the level of 1,790.03 while index of Hang Seng (HIS) dropped by 1,9%, index of Nikkei slumped by 14%, index of STI inched down by 0.4%, index of Shanghai dropped by 0.4% and index of ASX inched down by 0.7%.

Some central banks in Asia had become focus of attention with policy of the Bank of Japan and Bank of Korea today. The Bank of Japan, as it was impossible for them to change their interest rate which was already too low, would consider whether they should expand their asset buying program.

Toward decision making, financial shares registered in Tokyo slumped. Nomura Holdings Inc dropped by 1.1%, Aozora Bank Ltd dropped by 1.6% and Mizuho Financial Group Inc lost 0.8%. Shares of leading exporters also slumped, including that of Renesas Electronic Corp while Sharp Corp lost 2.3% and Mazda Motor Co dropped by 1%.

Hitachi Construction machinery was in counter-trend motion by rising at 1% after Nikkei reported operational profit for April-June period and was predicted to soar up following sales to America which showed positive trend.

Shares of the banking and property sectors also weakened with Industrial Commercial Bank of China Ltd losing 1%, China Merchant Bank slumped by 2.2%, Agile Property holdings Ltd fell by 2% and New World Development Co dripped by 1.4%.

Casino centers and luxuries goods were also part of the downturning trend sich as SpA 4.5%, Wynn Macau Ltd which fell by 2.5% and Galaxy Entertainment Corp which weakened by 2.3%. Meanwhile increase of index in exporter companies made South Korean shares to strengthen, like LG Display Co which jumped up by 3.1% and LG Electronics which rose by 1%.

Shares of Hyundai Motor Co. sunk by 0.2% while KIA Motores Corp inched up by 0.8% after wages dispute triggered their first act laborer’s strike.

In Australia, rally of oil price contributed to increase in energy shares. Oil Search Ltd rose by 1.6% and shares of Woodside Petroleum Ltd rose by 0.9%.

In Sydney stockmarket, Textra Corp. rose by 0.7% after Australia Telecommunication sold their subsidiary company Telstar Clear to Wodafone Zealand at nearly USD 670 million.

In Indonesia, IHSG was continuously under pressure over the sessions in line with the regional market. Previously IHSG had reached the level below 3.975. This was triggered by commodity prices which was visible in the share of the banking sector which sunk deeply. Asian stockmarkets also weakened, being triggered by downturn of commodity price and downturn of employment data in Australia.

The Europe stockmarket during sessions on Friday last weekend (13.7) had higher potentials. This was in line Asian stockmarket after data of China’s GDP came up as estimated. China’s economic growth dropped for the period of April-June to become 7.6%, the lowest level in the past three years, while production of the manufacturing sector dropped to 9.5% in June against 9.6% in May.

Such was a signal to the Government of China to follow up their monetary policy and increase investments, whereby their economic growth would be well maintained over the second semester this year.

At the same time, investors were waiting for the outcome of auction of bonds by the Italian Government. This auction took place after Moody’s Investors Service demoted Italy’s debt rating from A3 to Baa2 as they felt sure that Italy would be infected by the crisis in Greece and Spain. The were undergoing increased return of bonds as their economic prospect was fading out.

Weakening of the global and regional stockmarket was triggred by disappointment over further easing by the US Federal Reserves which eroded confidence all over the place due to “unclear” OE3 which had its negative impact on the global market.

Lack of clarification by the Fed about further easing made most of the index of global shares to weaken last week and to continue this week. Analysts rated that today the Fed was being controlled to maintain status quo and monitor economic progress.

This week there was one factor which had the potential to serve as positive sentiment to the local stockmarket in Indonesia, i.e. decision of the Regional Development Bank of East Java Tbk which posted premiere share at the Indonesia Security Exchange (BEI) as 13^th eminent with share code BJTM last Thursday (12/7).

Companies of the banking sector offered 2,8 billion shares to the public with price of premiere share Rp 30 per share and nominal value of Rp 250 per share. Total amount obtained from IPO of premiere share was Rp 1.28 trillion.

Market capitalization was posted at Rp 6,35 trillion. During IPO demand was 3,73 million shares posting 4,411 buyers. The number of shareholders increased to 4,381 through IPO.

The percentage of public shares was 17.87% after offering of premiere shares and ESA and MESOP programs. The average PER industry was 10.86 times and average PBV was 1.83 times on July 11, 2012.

Other positive sentiment came from BI’s step to maintain BI benchmark rate at 5.75% which was rated to have neutral impact on the property shares sector. As known, growth of property was related to interest rate level of banks. With BI rate being settled at 5.75%, it would motivate investors to shift investment to the property sector. Moreover portfolio investment was now in high volatility so as a whole, growth of the property sector would still be prospective till end of 2012.

By BEI data, by year-to-date index of shares of the property sector was the sectored index which rose highest compared to other sectors, posting an increase of 21.33% to the level of 278.16 points. This was the positive sentiment which was predictably supportive to IGHG movement this week in the range of 3,990 – 4,075 with the tendency of limited strengthening.  

Business News - July 20, 2012

Vice Minister of Agriculture: TWO ALTERNATIVES FOR ACCELERATION OF FOOD DIVERSIFICATION

For diversification that has been launched by the government since a long time ago is proven not easy to be realized. What happened is that it is only a socialization without any realization.

Rusman Heriawan, Vice Minister of Agriculture, after opening a Seminar on “Acceleration of Food Diversification” in Jakarta on Tuesday (7/17) offered tow alternatives to accelerate food diversification. Firstly, benefiting from instant noodles industry which has been growing. In noodle product, there is 30% cassava flour content. The government expects that by this way, consumption of food based on locally produced flour will increase.

So, it not necessary to make noodles which are 100% based on cassava flour raw material which are 100% based on cassava flour raw material. Because noodles based on flour raw material has been dominant, it will be difficult for society to accept noodles based on cassava flour raw material. “It is better to insert cassava flour content into instant noodles instead of making something new but unacceptable to the society”.

The second alternative to accelerate food diversification is through movements at regional level. One of them is by establishing a regional enterprise (BUMD) which handles supply chain of local non-rice food products. For example, in East Nusa Tenggara and West Nusa Tenggara, the regional government forms a business enterprise which handles com supply. In Papua, the regional government forms a stateowned enterprise handling tubers supply.

Therefore, if the interest of the society in consuming local food increases, there is already an institution that handles supply.

Not all movements of local food consumption must become a national policy. If it is like that, food diversification will not be going smoothly. “Rice consumption will not decrease, wheat flour consumption will be growing significantly”.

Census data of the National Bureau of Statistics (BPS) shows that consumption of grains-based food of Indonesian population in 2010 and 2011 in the 1^st quarter shows an increase. In 2010 at 310 gram/capita/day (113.16 kg/capita/year) and becomes 316 gram/capita/year (115.32 kg/capita/year) in 2011. This condition is much higher than grains consumption based on Expected Food Pattern (PPH) at 275 gram/capita/day (100.38 kg/capita/year).

Increase of consumption occurs in rice and flour consumption. Rice consumption increases from 276.07 gram/capita/day (100.76 kg/capita/year) to 281.71 gram/capita/day (102.82 kg/capita/year). While, flour consumption rises from 28.33 gram/capita/day (10.34 kg/capita/year) to 29.93 gram/capita/day (10.92 kg/capita/year).

High dependence on rice and imported food, such as wheat, threatens national food security. Moreover, the Indonesian government not only sets food security as target, but also food independence and sovereignty.

To promote food diversification, the government has issued Presidential Regulation No. 22/2009 on Policy on Acceleration of Diversification of Food Consumption Based on Local Resources and Regulation of Agriculture Minister No. 43/2009 on Movement of Acceleration of Food Consumption Diversification.

Alternative sources of basic food in Indonesia are available in very significant number, starting from cereals up to tubers. Even, there have been a diverse number of alternative food products based on local raw materials. Unfortunately, this is still at socialization and model stage, and not yet becomes a mass movement. “The problem at present is that the food products is still at display stage, and not yet at the stage of consumption by the society”.

Business News - July 20, 2012

SUPREME AUDIT AGENCY WILL STILL GIVE UNQUALIFIED OPINION IF THERE IS CORRUPTION CONFESSION

The Supreme Audit Agency (BPK) still gives Unqualified Opinion (WTP), regardless of corruption indication in the ministry concerned. It means that WTP opinion and corruption indication are two different things providing that there is confession from official of the ministry concerned. As WTP opinion is more emphasized on financial management aspect, especially business trips of ministry officials. If the business trip does not prove excessive spending, we consider that the performance of the ministry concerned is clean and efficient. And, if there is corruption indication, as far as it is confessed, WTP opinion will still be given, member of BPK. Ali Masykur Musa, told Business News (6/17).

As preparation to become Chairman of World’s Supreme Audit Institutions Environmental Audit, the Indonesian Supreme Audit Agency (BPK) will increase quality and quantity of audited objects. Audit Result Report (LHP) of a ministry in 2011 consists of several matters, including LHP on Financial Statements and Internal Control System and Compliance with the Law. The definition of Compliance is, for example, official vehicles cannot be transferred from one Directorate General to another. BPK is mainly focusing on accurate and accountable financial statements.

BPK gives Unqualified Opinion (WTP) with an Explanatory Paragraph (DPP) on Financial Statements of the Ministry of Marine and Fisheries (LK KKP) of 2011, like the one in 2010. Opinion on LK KKP has improved from Disclaimer opinion on LK KKP of 2006-2008 and Qualified Opinion in 2009. Concerning asset and asset inventarization, BPK opinion, assessment on LK KKP of 2011 has been fair in presenting all matters that are deemed material. Concerning asset owned by the Ministry of Marine and Fisheries (KKP), particularly after it is separated from the Agriculture Ministry, we have not yet properly documented the various reports. But, most of them have been documented.

Minister of Marine and Fisheries, Sharif C. Sutardjo, expects that KKP will still be given WTP opinion in 2013. Currently, KKP is maintaining is WTP predicate for financial accountability, while for Government Institution Performance Accountability Report (LAKIP), it is given B rating, and result of integrity survey of KKP is 7.46. This is a proof that we are ready for the program, Sharif told Business News (7/16).

As preparation to become Chairman of World’s Supreme Audit Institutions Environmental Audit, the Indonesian Supreme Audit Agency (BPK) will increase quality and quantity of audited objects. Audit Result Report (LHP) of a ministry in 2011 consists of several matters, including LHP on Financial Statements and Internal Control System and Compliance with the Law. The definition of Compliance is, for example, official vehicles cannot be transferred from one Directorate General to another. BPK is mainly focusing on accurate and accountable financial statements.

BPK gives Unqualified Opinion (WTP) with an Explanatory Paragraph (DPP) on Financial Statements of the Ministry of Marine and Fisheries (LK KKP) of 2011, like the one in 2010. Opinion on LK KKP has improved from Disclaimer opinion on LK KKP of 2006-2008 and Qualified Opinion in 2009. Concerning asset and asset inventarization, BPK opinion, assessment on LK KKP of 2011 has been fair in presenting all matters that are deemed material. Concerning asset owned by the Ministry of Marine and Fisheries (KKP), particularly after it is separated from the Agriculture Ministry, we have not yet properly documented the various reports. But, most of them have been documented.

Minister of Marine and Fisheries, Sharif C. Sutardjo, expects that KKP is maintaining is WTP predicate for financial accountability, while for Government Institution Performance Accountability Report (LAKIP), it is given B rating, and result of integrity survey of KKP is 7.46. This is a proof that we are ready for the program, Sharif told Business News (7/16).

Target of WTP predicate can be maintained due to some factors, especially management commitment to improve administrative system and financial statements and human resource quality. Audit Result Report (LHP) on LK KKP in 2011 is, amongst others, executive summary of result of audit on KKP, LHP on LK KKP, LHP on Internal Control System, and LHP on compliance with the laws.

There are some criteria in giving WTP opinion on financial statements, such as suffiency of financial data that can be assessed, compliance with the laws has been in accordance with financial accounting system and accuracy of financial accountability. LK KKP of 2011 has been complete in accordance with government accounting standard and fair in all matters that are deemed material. In every audit, there is always finding for improvement of financial statements. There are three matters that need to be explained by KKP. Firstly, three are assets which have not been re-evaluated, fixed assets whose existence is not found, and fixed assets whose inventarization process is not yet complete. As three is still asset selection work, which ones belong to KKP and which ones belong to the Agriculture Ministry.

Minister of Empowerment of State Apparatus and Bureaucratic Reform, Azwar Abu Bakar, stated his appreciation for the codes of ethics that have been performed by KKP. Even, according to him, KKP has had full awareness in crating an integrity Zone (ZI). He explained that KKP is one of five ministries in Indonesia that have launched Integrity Zone (ZI).

Concrete actions performed by KKP in applying ZI toward a Free Corruption Area (WBK) are, amongst others, integrity signing, reporting of assets of state officials, access to financial statements that has been performed by BPK, and reporting protection system. The aim of bureaucratic reform is to create clean bureaucrats who are free from corruption, collusion, and nepotism (KKN) and who are competent and helpful, Azwar told Business News (7/16).    

Business News - July 20, 2012