Thursday, 22 November 2012

Sunday, 11 November 2012


The soaring price of soy got tofu and tempe makers into trouble some were even on strike for lowered price by stopping to produce tofu and tempe, but the bliss behind the restless price of soy was that soy growers were getting zealous about planting soy.

The Ministry of Agriculture, Suswono in Jakarta on Monday (10/9) stated that the increased price of soy motivated farmers to grow soy, therefore the present farmers’ price of soy Rp 7,000/kg must be maintained.

Moreover in some production centers of soy like Kebumen, the potential of soy production was fairly good, i.e. 2.4 tons/ha. Survey data had it that the average productivity today was posted at 2.5 ton to 4 ton/ha; meaning plantation yields was fairly good, i.e. 1.3 – 1.4 tons/ha. “From research outcome it is visible that plantation yields of soy is potential enough for development” Suswono said.

Based on productivity calculation of at least 2 tons/ha alone and soy price at Rp 7,000/kg, farmers would receive earnings of Rp 14 million/ha. Meaning of production cost was Rp 2 million, growth could make profit of Rp 2 million/ha. “Hence, at the price of Rp 7,000/kg soy cultivation business would be competitive against corn” Minister Suswono was quoted as saying.

The Government was aware that soy business still had to compete with corn, because the two commodities were planted on the same land. Therefore, in order to be self-supporting in soy more space was needed. To procure more land, the Ministry had promised to procure extra land covering 500 thousand ha.

“With just two more years left we would maximize effort to meet the target of self supporting in soy. Moreover price of soy was sufficiently good and there was commitment from the Ministry of Forestry to procure land”.

Moreover Indonesia had the experience of self supporting in soy in 1992. At that time there was protection by the Government, i.e. price incentive by setting soy price at 1.5 times the price of soy. In addition to that the Government through Bulog acted as sustainer of farmer’s price of soy.

Ever since the incentive was non existent and price was no longer stimulating to farmers, production of soy dropped drastically from the previous 1.5 million tons to the present 800 thousand tons. “So one of the stimulators to increase production was attractive price”.

About the Government’s plan to apply Government’s Buying Price (HPP) for soy, the Government was still watching how things were going, at least if there was a HPP price of Rp 7,000/kg because if piece of soy at farmers level were favorable enough, they would be zealous about running soy business. “We are also considering other instruments like once again imposing import tax for soy. At the moment the Government was exempting tax on soy until December” Suswono concluded.

Business News - September 14, 2012


The Government had made several breakthrough to improve people’s welfare. Among them was to stipulate the policy of promoting creative culture, i.e. an economic activity with underlying culture, creativity, craftsmanship, and individual skill. To enhance the above efforts, the Government had set legal umbrella by issuing the Presidential Instruction no. 6 year 2009 On Development of Creative Economy 2009 – 2015. This Presidential Instruction was addressed to two Coordinating Ministers, namely: the Coordinating Minister of People’s Welfare and the Coordinating Minister in Economy, 21 ministers, four non-ministerial Institutional Heads, Governors, Regents and Mayor in all of Indonesia to promote development of creative economy and make it a successful project.

Dody Edward, Director of Development of Export Products and Creative Economy, Director General of National Export Development (PEN) Ministry of Trade on Monday (10/11-2012) underscored the importance of Government’s role in introducing and promoting creative economy to the general public. Dody was expecting that development of creative economy could bring positive impact on the social economic life of the people as well as creating employment, business opportunities, and to promote trading, tourism, and investment in Indonesia. “Our country is rich in natural resources, now the problem is just how to tap them so we could develop industry and promote people’s welfare and well being” Dody was quoted as saying.

Dody saw that the creative work of Indonesians were not only favored at the local market but also widely acclaimed at the international market. Some commodities of the creative industry which were sought after at the international market were among other: fashion products, IT products, Indonesian movies, etc. The unique design, assurance of high quality materials used by the creative industry in Indonesia were highly appreciated and sought after by the consumers in Asia, Europe and US markets.

Dody saw that there was a golden opportunity for players of the creative industry in Indonesia i.e. the distribution network which was widely spread which offered more sales and bigger profit. Considering the great potentials treasured by the creative industry sector, according to Dody, support was called for from the related parties to speed up growth of the creative industry. The intellectuals, for example needed to explore and publicize the new norms applicable in the environment especially those related to science and technology.

Local producers of the creative industry needed to adopt and apply modern technology in the production and distribution process whereby to make products more beneficial to users. On the other hand Government officials were expected to adopt business rules and trading policies which were conducive to progress in progress in management, facilitation and empowerment of local creative industry with emphasis in human resources upgrading, locating of industry and strategic budgeting for the growth of creative economy.

Dody elaborated that considering Indonesia’s geographic condition and wealth of natural resources, and diverse arts and culture and the artistic gift of the people, it became an undeniable fact that the wealth of creative talents was the spring of inspiration for making products of high creative value and strong competitive edge which would eventually bring sustainable progress to the industry and prosperity for the people.

Therefore, in the effort of developing the creative economy, it became indispensable that all endeavors must begin with enhancing creative culture and habit among the people. “We need to step up quality of human resources in the process of transformation to stimulate creative which would propel the creative industry sector according to strategy, direction, and target set” Dody concluded.   

Business News - September 14, 2012   


The Government was now giving full attention on infra-structure building in East Indonesia (KTI) whereby to create new economic growth centers or to make the existing economic enters in that region inter-connected. The Director of Transportation, Ministry of National Development of Transportation, Ministry of National Development Planning/Bappenas Bambang Prihartono in Jakarta on Tuesday (11/9-2012) stated that the Government was planning to prepare new infrastructure projects in East Indonesia to enhance development in that region.

Bambang stated that the Government’s commitment to intensify development process in East Indonesia never ceased. Each year, the government constantly reviewed and improved the development process in East Indonesia. Bambang mentioned there were some strategic issue which was now developing in East Indonesia. In Papua, for instance, the strategic issue which were developing were the problem of infrastructure building, poverty elimination, promotion of food resiliency, and promotion of public service.

In the province of Maluku, Bambang said, beside acceleration of infrastructure building, other strategic issue were expansion of plantation and opening of new ricefields mobile health service at sea, upgrading of human resources, acceleration of fish embankment development, and development of marine tourism. Meanwhile is Sulawesi the strategic issues were: increasing regional connectivity, upgrading of human resources and attainment of Millennium Goals  (MDGs), increase of agricultural productivity and procurement of energy need. “Infrastructure development is most vital in developing new growth centers in East of Indonesia” Bambang remarked.

According to Bambang, to speed up development in East Indonesia, the Government had increased transfer of fund to the region like General Allocation Fund (DAU), Special Allocation Fund, Dividend Fund, Otsus Fund and Adjustment Fund. In addition to that Bambang said, to drum up private investment, The Government tried to increase Government's capital spending in areas where private investment was still low. The Government’s focus of attention was, according to Bambang, was to prioritize infrastructure development in areas where the Government’s capital spending was high as propeller of economy in the region. He added on that to step up development was East Indonesia, the role of Provincial Government was most important whereby to serve a strategic step in national development.

East Indonesia was today in need of marine infrastructure to support connectivity. East Indonesia, which for the most part consisted of water, needed connectivity which was maritime connectivity, which means marine infrastructure. He said that an archipelago like Indonesia needed more sea connections. Bambang also disclosed that development of marine infrastructure needed enormous amount of fund as well as high technology and expertise.

Meanwhile Vice Chairman of the Indonesia Chmaber of Commerce (KADIN) HM Sattar Tabba rated that Infrastructure Development Acceleration Program in East Indonesia was not running well. Fore that matter fair distribution of fund for infrastructure development and well balanced funding for East Indonesia as well as maneuverability in space planning and Presidential Decree for development acceleration for East Indonesia became imperative.

Sattar Tabba saw that investment opportunities in East Indonesia was still wide and prospective. However there were some handicaps felt by KADIN in enhancing development in that region. KADIN, in spurring on infrastructure development in East Indonesia focused more on acceleration of infrastructure which was designed to speed up traffic of goods and passengers. In addition to that also development on infrastructure which connected industrial centers with harbors as well as to strengthen telecommunication networking.    

Business News - September 14, 2012    


Some LSM (Non Governmental Observers) had different views of the Initial Conference of Climate Change in Bangkok (5/9) some were optimistic while some were pessimistic. But nearly all NGO (LSM) saw there was a tendency of justification of the climate issue, which created fear among 6,973,738,433 (data 2011) of the world’s population. “Climate crisis was of the industrial to little doomsday, while financial crisis of the industrial states was the bigger doomsday which was ever dreadful” Sri Ranti of WALHI disclosed to Business News (10/9).

The conference was participated by delegates from Indonesia, i.e. Chairman of the Fiscal Policy Board of the Ministry of Finance and four NGO’s i.e. WALHI, CSF and KIARA. WALHI (the Environmental Organization) among other admitted there were two main differences among LSM/NGO in regard to the effort to reduce the earth’s temperature. “Some LSM were avocation oriented, some were conservation oriented. In fact all LSM were not overlapping in voicing emission reduction, but there was simply no common ground especially in regard to Green Climate Fund (GCF)” Sri Ranti remarked.

Meanwhile at global level, LSM were broadly divided into poles, i.e. those who focused on justice network and those who focused on negotiation, they and those who focused on negotiation, they were bringing messages from the people of the respective countries not just by way of report but also negotiations. WALHI who joined the Climate Talk for the past three years saw the need for a more definitive target in strengthening the climate issue. “All LSM who joined the conference were financed by certain delegation. We are also busy with certain activities, but we from Indonesia have our target which must be synchronized first with other LSM” she remarked.

Beside WALHI, KIARA (people’s coalition for Fishery justices) and KAU (the anti-debt coalition) and Civil Society Forum (CSF) were voicing the same opinion. The activists, before embarking on the main agenda of the conference had their pre-briefing. “We must stipulate a common ground before underscoring the main agenda”.

GCF was an idea or proposition which was only set forth this year. There four LSMs we also seeking for a common platform for GCF was already at regional level, but had not arrived at national level in Indonesia. “NGO are voicing the same opinion because they set forth the same case including this GCF” However, LSM could not always be directly involved in negotiations. There were some parts of discussions which were closed for NGO, only state observers were involved. “Sometime we wasted a lot of time the way it happened in Bangkok. We were often confused because one NGO form abroad came up with one proposition while another NGO came up with another since there was no common ground” Sri Ranti remarked.

Meanwhile KAU saw that the Bangkok conference ended up with less gladdening result. Industrial countries did not make any clear commitment to definite emission reduction, while developed nations, including Indonesia, had no fangs to make any pressure. Indonesia’s leader position as the biggest country in South East Asia should have been more daring and aggressive at that conference. “The faith of the Conference on Climate Change had only to months left, but it seems to still to leave a big question mark” Dani Setiawan of KAU told Business News (11/9).

The COP outcome 16 in Cancun (2010) and Durban (2011) evaded industrial countries away from their historical responsibility as main contributor of gas emission to the glass house effect. They also dominated the conference to re-route the course of discussion to opposite direction, away from the original track to overcome climate change effect.

Commitment of the industrial states was not strong enough to lower gas emission till 2020 as increase of global temperature had come to above 4 degree celcius. “The future of mankind is gloomy, since industrial states easily delay time and came up with excuses like financial crisis keep them from being consistent about reducing gas emission” Dani Setiawan was quoted as saying.

At the climate talk, pollutant countries: the USA, Uni Europe, China, India so freely influenced the discussions. The result was that negotiations were losing their meaning, way beyond the limit of tolerance. America used their political power to influence the meeting nor did America national corporations give their commitment to lower emission seriously. China as one of the top contributor of emission, was advantaged by the powerless negotiations. Uni Europe’s true colors showed in their diplomacy, who persisted to the promise to reduce emission by 20 percent, was now clearly visible. “The deal was even exercised through carbon trading and carbon absorption and storage. A list of solution on climate change was also not clear. They did not do anything to control economic growth and reduce consumption” Dani Setiawan remarked.

The world needed act of rescue at once. Monitoring by NASA satellite was showing melting process of ice in Greenland and high speed, much wider than a few months ago, which was beyond scientist’s calculation. They noted expand of Greenland ice melting widest since satellite monitoring 33 years ago. In tandem with that, report of the National Board of Disaster Management (BNPB) detected increase of tropical cyclone of 878 percent in the past six decades. “The world was tormented by landslides and flood continuously in the past three months. Hundreds of people died and millions of them live in a state of emergency” Dani reported.

In Indonesia, dry season that lasted longer than usual and had brought harvest failure to farmers. In addition to that, many regions in Indonesia, farmers feared shortage of clean water. The syndrome was equally felt in all of the islands. Meanwhile farmers suffered due to extreme climate. “In addition to that many fishermen died in stormy seas. Our record has it there were 86 fisherman who died at sea. The number increased to 149 in 2011 and by August 2012 the victms were chalked up at 186 people” Dani said.

While there was lack of commitment to emission reduction, industrial states were also less supportive to fund raising for adaptation in the post GCF establishment perioed in COP 17 in Durban, which was aimed at mobilizing fund raising for climate change was getting less and less clear. Up till now the mechanism of GCF management was still vague, including the aspects of funding, allocation, direct access mechanism of GCF management was still vague, including the aspects of funding, allocation, direct access mechanism for people, fragile communities, regulations and proper spending of fund.

Rich, industrial countries especially America and Uni Europe only made promises. So far not a single dollar was allocated for GCF While an archipelago country like Indonesia, which was vulnerable to anomalous climate, did not take any initiative to mobilize APBN budget to support people’s adaptive capacity to climate change. Low commitment and global and national level would hindrance effort to step up adaptation capacity of people among developing nations “They are countries vulnerable to climate change”.

Funding by industrial countries was their obligation for the recovery and betterment of the poor people affected by crisis. The funding must not be in the form of money or other conditionalities and might not be used for private investments, big corporations or be used for private investments, big corporations or multi-national companies and must be sustainable. “We don’t have a strong figure like Soekarno (Indonesia’s first President) who dared to go against industrial countries which were now prevalent. Supposedly Indonesia take the lead in the acceleration of GCF, because Head of the Fiscal Policy Dept of the Ministry of Finance represented Indonesia as one of the Board members”.       

Business News - September 14, 2012    


The Governor of Bank Indonesia Darmin Nasution stated that he was dissecting the plan to operate Trustee service to manage forex reserves from export yields. Discussions over Trustee came up after grievances was voiced by companies which were engaged in production sharing contract (KPS) in the oil and gas sector (MIGAS).

According to Darmin Nasution, many parties wished there was Trustee in Indonesia. The status of Trustee was in the Law of Banking, which was essentially depositing forex from export (DHE) in banks. The process of discussing forex from export yields with contract-holder companies in the oil and gas sector was still a long way to go. Generally they complained that there was no Trustee in Indonesia.

Discussions of DHE including Trustee had been going on for six to seven months. For Trustee he expected that the regulations would be released through Bank Indonesia in two or thee months.

Previously it was informed that BI was scheming up a regulation to step up capacity of banking services at home to manage incoming DHE. Among them was Trustee, a body which did not only keep DHE but also managed the forex. The forex reserves, by Trustee management could be used for investments depending on agreement with exporters.

The objective was that domestic banks could be confided to render trustee services and manage DHE. This was done so that DHE which were now deposited in domestic banks would feel at home in Indonesia.

Now Trustee had become a hot issue because the management of forex liquidity had been the focus of criticism by many parties since crisis swept over two continents. One thing was certain that BI’s plan to form a Trustee to manage DHE was worthy of appreciation although the execution was not easy.

In fact the plan was a praiseworthy effort by BI but there were hindrances to the execution like absence of legal protection, poor infra structure and non-existing banking product. Legal umbrella was needed because the way it had been, foreign banks which were entrusted to manage Trustee already had their regulation so the operation was well secured. If the legal factor was north strong, it might pose danger to customers.

Besides, the local banks were rated as not having the right instrument. Trustee had been in operation in the capital market. In the Stockmarket Trustee was the entrusted party, where investors deposited their money first in the appointed bank as trusted bank, and soon to transfer the fund to the related eminent. In this case the legal protection was only the Bapepam and financial institutions.

Previously BI believed that there were still foreign companies or trustees who placed their DHE in their holding companies, not in Indonesia. They were reluctant to place their DHE in Indonesian banks as they were afraid the fund could not be withdrawn. The final objective of Trustee was that the Government would receive report from DHE recipients which declared the amount of products exported.

Today all of the DHE money deposited in local forex banks were usable, but only used for credit and investments while attractive products as being offered by foreign banks were not available. Up to April 2012 last, based on Notification of Exported Goods (PEB) per January 2012 only half of DHE had entered.

Of the total PEB per January amounting to USD 14.6 billion, the amount received by April was around USD 7.4 billion. Most of the exporters who had not received DHE through domestic forex banks were those active in the sectors of palm oil, rubber, coffee, and cacao.

As with oil & gas, the hindrance was DHE accounts entering through trustee bodies abroad. BI coordinated with BP Migas to respond to that matter. There were 21,600 exportes which were identified as not having entered their DHE. In this case BI had sent a letter to Them. Although still not due because export data of January was received in July 2012 at the latest, BI kept on reminding aboit it.

Or the letters sent out by BI, so far there were only 200 exporters who responded and explained. Most of them claimed to have received DHE through domestic forex banks. BI followed up the responses by checking to the banks mentioned by exporters as recipients of their DHE. Still in this case BI had to face the problem of finding exporters’ address as many of them were not accurate.

If the DHE rules were obeyed by importers exporters, it could increase supply of USD at home; Rupiah movement would be more stable. Unfortunately some business players felt that this regulation was not efficient enough. Understandable because BI themselves claimed they were having difficulty in applying Bank Indonesia Regulations (PBI) No. 13/20/PBI/2-11 which obliged exporters to deposit DHE. Among the problems was obstacles by exporters network at international level.

The problem arose because multi-national companies operating in Indonesia had their principal in Indonesia. Meanwhile interbank accounts were spread out. However, generally there were many companies which had reported. Therefore to increase awareness among exporters, BI must continue to step up illumination campaign for exporters who had not or even did not deposit DHE on July 2.

BI Rules (PBI) regulated that exporters were obliged to accept all DHE through Indonesian forex banks at the longest 90 days after PEB. In the event that by July 2, 2012 exporters ignored this PBI, the Central Bank would put administrative sanction from Rp 10 million to Rp 100 million.

The banking circles claimed they were having difficulty in identifying DHE. The point was that exporters could make PEB direct with the Customs Dept while there were exporters who used the (T/T) transfer mechanism so banks were only receiving transferred fund belonging to exporters without submitting documents to banks. By this mechanism banks could not open PEB data and cross-check them against DHE as there was a Law of Customs which prohibited it. Only BI, The Customs Dept. and Central Board of Statistics (BPS) could open data.

Bank could only cross-check PEB documents against DHE provided the transaction was through letter of credit (L/C), the point was that it was compulsory to apply for PEB document. However, transaction by L/C was no longer popular because now nearly 85% of export transactions were done by using non-L/C documents so banks could only publicize DHE policy to their customers.

Word was out that the oil & gas sector was the least receptive to the application of DHE rules. The reason was low confidence of exporters in the security state of the nation so in times of emergency exporters could not carry their money away while demand for oil was always high; besides there was the habit of letting exporters to park their money abroad. That there was no trustee in Indonesia was only an excuse to justify their acts. When Rupiah value reached Rp 9.600 per USD, many exporters sold their dollars to banks.

So the challenge for BI and the banking sector was to try to bring DHE to Indonesia through trustee. That the trustee itself was not ready, it must be made ready because the need for it was pressing. Beside Trustee, domestic banks must also be wise and smart to create attractive products as offered by foreign banks so national exporters would be attracted to deposit their money at home in Indonesia.

 Business News - September 14, 2012


The Ministry of Trade was expecting some understanding among businesspeople in regard to the plan to revise Regulation of the Ministry of Trade Permendag no. 53/2008 on the guidelines for Management and Development of traditional market, shopping centers, and modern shops. The revision plan was more focused on efforts to balance up consumption level of Indonesians. Indonesia ranked first in terms of consumption in Southeast Asia. At global level, Indonesia was in fourth position. “The Government’s target is that by 2014, Indonesian consumption level would drop by up to 95 percent” the Directorate General of Domestic Trading of the Ministry of Trade Gunaryo disclosed to Business News (7/9).

Permendag no. 53/2008 specified on rules of discount for regular prices, discount of fixed prices, discount of special prices, discount of promotional prices, and promotion expenses. The Regulations had their strong influence on modern retail business. Meanwhile there was mounting anxiety that traditional markets would not be able to compete against modern retails who often offered special prices to consumers. “We do not wish to be accused of overacting by the regulation amendment plan, but there is the spirit behind the revision of Permendag. We are only anxious to reduce over consumption” Gunaryo remarked.

The philosophy of Permendag no. 53/2008 was to set up a balance condition in the real condition of national industry who were in uncompetitive condition. While being uncompetitive against modern retail, domestic products were not getting any facility as they deserved. “There are modern shops which fill up one full floor of their shop with foreign brands, while domestic products are placed in the shelves in the dark corners of the shop. This is the sort of condition most undesirable” Gunaryo said.

Meanwhile the Ministry of Trade had prepared two tools to restrict foreign brands and to balance up composition of domestic brands. Meanwhile the local content being mandatory was 80% by the execution was not even maximized. On the other hand, retailers were also afraid that some brands which entered the domestic market in Indonesia could be marketed overseas. “In fact we are not restricting them, but in the revised regulation the Government was not giving unlimited time for imported products to stay in outlets or ships” Gunaryo remarked.

In addition to the above, the revised Permendag Rules also solved scarcity problem of raw materials at home. However if there were really need for certain raw materials which were not available at home, the Government would permit import for such. For example garment products made of special leather. Apparently such raw material were not available at home, so there was eased regulation for import. “There are brands of such products in Indonesia. To uphold brand image, they could not use any raw material there was no other way but to import. In this case the supervisory and appraisal team would decide”.

Meanwhile Chairman of the Industry and Specialty Division, Association of Indonesian Coffee Industry and Exporters (AEKI) Pranoto Sunarto was not worried about the so many foreign brands of coffee business and coffeeshops. In fact Indonesian coffeeshops were not inferior to foreign franchise coffeeshops like Starbucks. As a matter of fact many mall visitors including foreign expatriates were enjoying Indonesian coffee. “We feel sure that Indonesian coffee can compete against foreign coffee. Our coffeeshops are stormed by visitors especially during business hours. To drink coffee in mall has become a lifestyle. The way it has been we never heard of the word tea shop, there is only coffeeshop”. Soenarto told BusinessNews sometime ago.

The Tiam coffee from Malaysia was no threat to Indonesian coffee retailers, because the word Tiam was non existent in franchise business and therefore there was no evident of any violation of intellectual right on that brand. Another example was the word warteg in Jakarta (a word that denotes traditional restaurant) which was found in many streets in Jakarta. The word Warteg was not a proper noun that existed in the domain of intellectual rights (HAKI), it was just a common noun that anyone can use. “The case of Tiam coffee may be regarded as a case of HAKI violation, unless there is any additional word like Lauw brand Tiam coffee which is a Chinese surname, but if only the word Tiam Coffee is used, it is not a violation, just like the way it is with Warteg” Soenarto concluded.

 Business News - September 12, 2012


In Indonesia there were numerous people’s innovative workpieces or creations which were of high sales value. For that matter the people or whoeover created a product must have right of creation, and patent right so their workpieces could not be copied by someone else. Unfortunately people’s awareness and appreciation for intellectual right and the right to claim intellectual right in Indonesia was still low.

In Indonesia the rate of violation of intellectual right (HAKI) was also still high. This was due to low protected system of HAKI and weak control by Government apparatus on the widespread occurrence of intellectual right violation. The Government had done their best to launch illumination campaign for the people about the protection of intellectual right, process of application, and legal sanction to be put on violators.

The Director General of IKM of the Ministry of Industry, Euis Saedah, in Jakarta on Friday (7/9/2012) admitted that the awareness among small and medium industry circles to register their creations were still low so very frequently many cases of dispute busted out. This year the Ministry of Industry set target to register intellectual right of 150 brands and trademarks but only 100 came to apply and only 60 brands passed. “IKM player are not too enthusiastic about applying for HAKI because the procedure of application is quite lengthy and there is a synopsis needed for it” Euis remarked.

And yet according to Euis, the cost for HAKI application was free. Intellectual rights application consisted of copyright, patent right, branding, industrial design, and space planning of integrated circuit. Euis said that she planned to allocate fund of Rp 2 billion to nature local IKM and apply for HKI in 2013. For the most part the fund would be spend on publicizing HAKI to IKM and the importance of patenting their products. Furthermore Euis promised to extend legal assistance for IKM in intellectual rights desputes.

Euis reminded that it was easy for anyone to steal IKM brand in Indonesia as they were not patented. According to Euis copyright was an important matter because someone’s brand could easily be robbed by someone else who would patent the brand. In this case the owner could not use his own name and could not sell his product by that brand. Euis said that the awareness of intellectual right was because IKM never know how to obtain the right. For that matter the Government planned to lauch an illumination campaign to protect IKM from having their brand of creation stolen. The illumination was also meant to motivate IKM small industry to voluntarily patent their product or brand.

HAKI would give legal protection for products invented or branded by the people. Moreover to the businessworld, especially IKM became most important for developing creative economy which was full of competition. She mentioned two benefits offered by HAKI i.e. firstly to give added value to products and be beneficial to other people. Secondly, it would strengthen product competitiveness and at the same time protect every product being released from any attempt of forgery. Hence she expected it would have the impact on economic development which would eventually improve people’s welfare. “I think intensive efforts are necessary to make IKM more concerned about HAKI” she said.

Euis reminded that IKM played an important role in developing people’s economy. The industry proved to be solid and highly resistant to global economic turbulence. Besides, IKM was able to absorb vast labor and evenly spreading people’s income. For that matter, a number of programs had been launched such as pipelining of People’s Business Credit (KUR) stepping up mastery of technology through machinery advancement. Upgrading of human resources quality through training and counseling and quality control as well as food sufficiency must be enhanced whereby to open better access to market.        

 Business News - September 12, 2012


National efficiency was still the hot issue in the discourse of Indonesia’s economy; this issue was directly related to the case of Indonesia’s downfall in rating of competitiveness recently.

The unpleasant news originated from the release of the World Economic Forum (WEF) an Independent organization well known for their annual meeting of global business leaders and political elite of the word, intellectuals, and journalists in Davao, Swiss who rated Indonesia’s economic competitiveness this year in 50th position among 142 nations, falling by 4 grades against last year.

WEF’s release was indeed a heavy blow on the Government of RI. Not only because Indonesia’s competitiveness was way below neighboring countries like Malaysia (25), Brunei Darussalam (28), Thailand (38) or Singapore (2) Not even because Indonesia ranked with third world countries who were mostly poor countries in Africa.

WEF release was so painful because Indonesia had been too overjoyed by some national economic indicators which were perhaps sparklingly bright amidst the world’s gloomy economy. By Semester 1-2012 Indonesia’s Gross Domestic Product accumulatively arrived at growth percentage of 6.3% against same period the previous year.

Even Inflation rate per August was still at safe level, only 4.58% year-on-year. Downturn of competiveness level by WEF also made all other achievements seemed flavorless. Such was perhaps the things that made businesspeople of the national logistics sector feel uneasy.

It seemed reasonable that the Association of Indonesian Logistics (ALI) pied the Government to increase budget for infra-structure in the APBN State Budget by threefold to reduce logistic cost.

Ali felt that to arrive at logistic cost of 10% in 2025, the Government needed to increase allocation of infra structure fund as per next year. The allocated budget for infra structure in APBN at that time was about 2%, way below that of China who allocated fund of around 6% for infra structure.

According to ALI, with additional budget for infra-structure, infra structure development to support logistic activities would also be made faster, so logistics cost could be automatically reduced.

Previously, the Coordinating Minister of Economy Hatta Rajasa disclosed the Government set target for national logistics fund at 10% for 2025, lower than logistics cost today at 14.08%. Today logistics cost in Indonesia was way higher compared to other countries in Asia which was only around 4% - 10%. Therefore infra structure was one of the Government’s priorities.

The national logistics system was today still not efficient, the weak point was connectivity which needed to be developed in order to strengthen competitiveness and improve people’s welfare. Beside increasing allocation for infra-structure, the Government must also withdraw subsidy for oil so the fund could be used for revitalizing transportation armada as well as infra-structure development.

If the subsidy fund was transferred for infrastructure development and revitalization of transpiration armada, it would lower logistic cost in the long run. Human resources was one important aspect to be observed. Indonesia needed personnel who were competent in logistics management, but today trained personnel in logistics were still scarce in Indonesia, which tend to stagnate the logistics operation itself.

Logistics companies frequently seek for personnel from abroad since logistics managers of high quality was still limited in number at home. Logistics personnel needed proper education and training. To be exact, logistics personnel in Indonesia needed certification on logistics so the quality would be well guaranteed whereby to bring progress for logistics business in Indonesia.

About the target to set logistics expenses to become 10% in 2025 as set by the Government, it was considered as realistic enough to assume average annual inflation at 5%, the target was sizable enough. It was still conservative but quite reasonable, because the inflation factor must be considered as well. Provided that the pre-conditions were met, the target would hopefully be met.

The instruments to support the national logistics system in enhancing efficiency in economic activities in economic activities in fact already existed, i.e. through the Masterplan Program of Economic Acceleration and Expansion (MP3EI). The MP3EI program had the logistics betterment as the main agenda.

To illustrate, the selling price of lemon from China was cheaper than that from Pontianak, Indonesia because the transportation cost (including logistics) was lower in China. The price of cement in Papua was twentyfold of the price in Java due Transportation and logistics factors.

Building of airport and seaport as an effort to upgrade transportation system would bring the greatest benefit if the logistics system were also developed. In this case the prioritized factor was not the transportation armada like sophisticated aircrafts and ships, but more on the available good and efficient logistics as supporting factors.

Improvement of the logistics system must be on the hardware and software side which were vital and must therefore be prioritized because Indonesia was way behind other neighboring countries (peers group).

In ASEAN 5, including Indonesia, the Philippine, Thailand, Singapore, Malaysia and Indonesia, in terms of logistics, was most probably lowest by rank. It seemed reasonable to say that Indonesia’s neighboring countries were more ready to face the worst of the chain effect of crisis in Europe compared to four other ASEAN states as their infra structure and logistics were more ready.

Therefore, supportive to implementation of CAFTA which was effective as per 2012, and toward implementation of the ASEAN Economic Community 2015 it was most advisable for the Government to prioritize on building efficient logistic system. The fund in APBN Annual Budget must be increased while strong human resources must be prepared by conducting more systematic training sessions. By these efforts, economic growth of better quality could be enhanced more.    

 Business News - September 12, 2012    


The Moneymarket
In Spite of the continuous depreciation of Rupiah against USD, Bank Indonesia as monetary authority rated such was something natural. BI had their commitment to always remain in the foreign currency market in order to stabilize, because the market must be balanced with inflow of foreign capital through investments. The amount of USD in circulation was still in accordance with market demand and the underlying economic condition.

So far the average exchange rate value of Rupiah against USD was Rp 9,270 BI would maintain Rupiah exchange rate value to keep it from fluctuating too much. Based on BI’s mid-rate (6/9) Rupiah was seen to weaken to Rp 9,592 against the previous Rp 9,588 per USD.

Generally speaking market players were today observing the development of potential deficit of Indonesia’s current transaction as reference in doing transaction. If the threat could be anticipated, most likely investor’s perception would be positive and inject positive sentiment on Rupiah.

Marketplayers were also observing economic growth for the future. It was expected that investment and export could contribute to the pursuit of economic growth 2013 at 6.8%. But BI was pessimistic that economic growth could be lifted any higher because the global economic condition today was still signified by lessened demand in Europe. As BI saw that export was still recovered, they projected Indonesia’s economic growth in 2013 would only be 6.3% - 6.7% amidst optimism of a better global economic prospect.

Somehow BI’s projection was different from Government’s assumption in RAPBN State Budget 2013 of 6.8% due to difference in time calculation based on the latest economic condition. It was expected on the latest economic condition. It was expected that the difference of assumption of macro assumptions between BI and that of the Government would not ignite and debate among marketplayers as it might result in varied economy.

It was noteworthy that Euro the common currency once elevated by 3% of the highest level in two months against USD after the President of Euro Central Bank Mario Dhargi announced to buy bonds. 17 Euro zone member states maintained margin level against most of the 16 world currencies amidst ECB’s optimism that ECB would announce measures to be taken to overcome debt crisis.

Meanwhile Australian USD was exchanged at it lowest value level in more than 7 weeks before release of report which showed increasing unemployment in August. The market responded positively to ECB signal who planned to take significant measures. At least Euro would settle at the present level or perhaps to inch up toward conducting of ECB meeting.

The market was quite shocked to hear announcement of the Central Board of Statistics (BPS) about the increases prices of air transportation, tofu, and tempe which triggered inflation in the month of August 2012 to the point of 0.95%. According to BPS the main uplifted of consumers price index (IHK) in August was increased prices of transportation and seasonal food during the fasting month, Lebaran and new school semester year. The greatest contributor to inflation in August was food (0.35%) and transportation, communication followed by financial services (0.23%).

The only thing was BPS did not worry about inflation level of last August which was rated as relatively controllable because it was only Slightly higher than inflation of August 2011 which was 0.93% based on inflation data of August, inflation of 2012 would not each 5% because inflation rate in the ensuing month would be lower.

High import contributed to downpressing of price at consumers’ level, especially due to up jump of import from countries who treated Indonesia as an alternative export destination country like China. Inflation of 2012 was projected to be only around 4.7% - 4.9% so BI rate was predicted to settle at 5.75% till end of year.

The market would also respond positively to the development of Indonesia’s forex reserves by end of last August which reached USD 109 billion. The figure was an increase of around USD 2.45 billion against that of end of July at USD 106.55 billion. Increase of forex reserves was thanks to income from export especially oil an gas.

In addition to the above, increase of forex reserves also originated from term deposit of foreign currency and good sales of auction of Government bonds. Once Indonesia posted highest forex reserves of USD 114.93 billion, but simultaneous with deficit of balance of payment in quarter II, the position slumped. Downturn of forex reserves was also the monetary cost of Government’s effort to protect Rupiah exchange rate value which once crumbled.

It seemed reasonable that BI projected Rupiah value against USD till end of 2012 to be in the range of Rp 9.200 – Rp 9.400 per USD. Among the reasons was that during the second half of 2012, deficit of current transaction would contract to only around 2% of GDP. This estimate was based on the expectation that the global economic condition and price of export commodity would be better, while being supported by the BI’s policy and the Government.

The subsiding restlessness of the global economy would pull inflow of foreign capital higher which would eventually lift up surplus of capital and financial balance. In 2013 the prospect of Rupiah value would still be influenced by the prospect of global economy. Performance of current transaction was predictably better with support of export performance although import was still high due to high domestic demand.

Inflow of foreign capital especially foreign direct investment (FDI) was expected to increase to sustain surplus of capital and financial balance sheet. Based on performance of balance of payment, BI projected Rupiah exchange rate value in 2013 would be in the range of Rp 9,300 – Rp 9,500 per USD.       

The prediction must be accompanied by caution, including of the prolonged crisis in Europe and economic slowdown in some partner states which might affect export performance. As for this week, Rupiah exchange rate value was predicted to move in the range of Rp 9,565 – Rp 9,615 per USD with a tendency to inch up.

The Capital Market

During closing session last Thursday (6/9), index of IHSG strengthened by 27.505 points or 0.67% to the level of 4,084,836 cheered by the Asian stockmarket. During closing of session 1, IHSG strengthened by 14.770 points (0.36%) to the level of 4,090.122 Meanwhile index of LQ45 rose by 3.393 points (0.49%) to the level of 701.174 Increase of this index of ECB meeting in troubleshooting debt crisis.

And yet during the last session on Monday early last week (3/9) IHSG was closed to rise by 57.617 points (1.42%) to the level of 4,177,948 Meanwhile index of LQ rose by 11.201 points to the level of 706.733 Strengthening of IHSG was driven by buying spree of shares which were cheap. Index managed to break through the psychological level of 4,100.

Again foreign investors were accumulating shares. Local investors were not less passionate to chase shares which were already cheap. Nine shares managed to strengthen, being driven by the buying spree; only one sector was still under pressure, i.e. agriculture the consumer’s sector took the lead in the strengthening process.

In other part of the world, (6/9) shares in Wall street were going by leaps and bound, breaking through the highest level since the fall of Lehman Brothers which ignited the crisis of 2008. The strengthening was triggered by the plan to but promissory notes in Europe by the European Central Bank (ECB).

The President of ECB Mario Draghi had kept his promise of last July to do anything he could to troubleshoot debt crisis in Europe. The Europe Central Bank intended to buy bonds without limit in order to save crisis-entangled European states.

This ECB plan, which was not approved by Brundesbank from Germany planned to buy promissory notes and keep them for a period of three years, naturally by mandate of ECB. ECB also planned to maintain interest level at lowest level of 0.75% to tame inflation as well as to ease credit cost.

Index of Dow Jones jumped up by 244.52 points (1.87%) to the level of 13.292.00 Index of Standard & Poor’s 500 jumped to the level of 1.432.12, the highest position since May 2008, before the global financial crisis swept the earth. Index of Composite Nasdaq skyrocketed by 65.12 points (2.12%) to the level of 8,134.39.

The upjump of index of Dow Jones was triggered by the plan to buy promissory notes in European states by ECB and positive sentiment from data of America’s economy which exceeded expectations, i.e. in the service sector and number of employments.

Movement of index at the global and local stockmarket in the last few months were much influenced by news from Europe. Responding to this, index of S&P had risen by 8% since early July. Meanwhile Asian stockmarkets were open to rise and indicated that index serving as regional reference would book the biggest increase in the past one month.

Bloomberg reported that upturn of the regional shares was in line with ECB’s decision to give room to unlimited bond buying. According to analysts, bond buying plan by ECB was a long term measure to find solution to crisis. The plan was rated as having the potential to minimize continued risk in Europe. They stressed there was no dount about it.

Nearly all stock markets in Asia were already opened last Friday (7/9) after the US stockmarket was closed to be appreciated. Nikkei 225 in Japan rose by 1.89% to the level of 8,844,57; index of Tai-ex in Taiwan rose by by 1.32% to the level of 7,423.19. Index of Kospi at the South Korea stockmarket jumped by 2.13% to the level of 1.921.23. Index of S&P/ASZ at the Australian stockmarket inched up by 0.57% to the level of 4,337.5. Index of Straits Times in Singapore also inched up by 0.87% to the level of 3,015.4. Not less notable FTSE KLCI in Malaysia inch up by 0.16% to 1,620.62. Furthermore index of NZX in New Zealand also rose by 1.19% to the level of 3,737.4.

From the above picture it was visible that Indonesia’s macro-economy which tend to weaken would not shatter investor’s perception since they were focusing attention more on the process of economic recovery in Europe. It seems quite natural if the BEI index was projected to move in the range of 4,090 – 4,130 with the tendency of limited strengthening. Shares of the financial sector, consumers sector and construction was predicted to serve as sustainer of IHSG increase.        

 Business News - September 12, 2012


Expected to operate before Asia Pacific Economic Cooperation (APEC) Summit to be held in September 2013, construction of Nusa Dua – Ngurah Rai – Tanjung Benoa toll road is accelerated.

Head of Communications Center at the Ministry of Public Works, Waskito Pandu, in Bali, Tuesday (9/4), said that the progress up to September 3, 2012 already reaches 32.4% of 32.1% of the target set. It is set that in October, the progress will reach 75%, and in April 2013, it will be inaugurated and will operate in July 2013.

President Director of PT Jasa Marga (Persero), Tbk, Adityawarman, said that the progress of construction of the 10Km-length toll road has reached 24% on August 18, 2012. The company projected that construction of all the pile foundations can be completed by December 2012. “Construction progress has reached 24%. In some sections, construction progress has reached more than 30%, but there is only one section which is only at 18% of completion progress. But, we expected that all pile foundations will be complete by December this year”, he said on Monday (9/3).

According to him, acceleration of toll road construction is maybe because it requires not too large area, namely 5 hectares for construction of entry and exit gates in Tanjung Benoa, near Ngurah Rai airport and Nusa Dusa.

For construction of toll road worth Rp 2.3 trillions, Jasa Marga has received a Rp 1,739 billion fund from a syndicate of banks consisting of Bank Mandiri, Bank Rakyat Indonesia, and Bank Central Asia.

Head of Toll Road Regulator (BPJT) of the Ministry of Public Works, Achmad Gani Gazali, said that land clearance for the toll road can be speeded up land clearance for toll road can be speeded up considering that a major part of the land required is owned by shareholders of the project. “The one which is community land is located near Nusa Dua, and the remaining is owned by other shareholders in the consortium, such as the one in Tanjung Benoa which is owned by PT Pelindo III and the one in Ngurah Rai which is owned by PT Angkasa Pura I. So, the land clearance process should not be difficult”, he said.

The Nusa Dua – Ngurah Rai – Tanjung benoa toll road is managed by PT Jasa Marga Bali Toll, which is a consortium of companies with majority shareholders consisting of PT Jasa Marga (60%), and the remaining shares are owned by PT Pelindo III (20%), PT Angkasa Pura I (10%), Bali Toursim Development Center (1%), PT Hutama Karya (2%), PT Wijaya Karya, Tbk (5%), and PT Adhi Karya, Tbk (2%).

Vice Minister of Public Works, Hermanto Dadak, explained that construction of Nusa Dua – Ngurah Rai – Tanjung Benoa toll road is aimed at reducing traffic congestion on Ngurah Rai – Tanjung Benoa and Ngurah Rai – Denpasar toll roads. The toll road will have a special lane for motorcycles and will be a triple-decker.

With an investment of Rp 2.3 trillions and concession period of 45 year, Nusa Dua – Ngurah Rai – Tanjung Benoa too road will be operated with a preliminary tariff of Rp 10,000 for category I vehicles and Rp 4,000 for category VI vehicles.

The toll road will be constructed simultaneously with construction of Dewa Rutji underpass. Construction of the underpass worth Rp 136.19 billions is expected to reduce traffic congestion on the road from Nusa Dua to Ngurah Rai airport.

Besides the Nusa Dua – Ngurah Rai – Tanjung Benoa toll road and Dewa Rutji underpass, to reduce traffic congestion in the southern part of Bali, the Ministry of Public Works will also construct Jalan Prof. Ida Bagus Mantra road connecting Java and Lombok island.  

Business News - September 7, 2012 


Housemaids (PRT), the most up to date term was pevorative for domestic workers in home who helped employers in their non-profit daily activities.

Member of Commission IX of House Hidayatulloh felt PRT was becoming a significant element who made life easier for individuals especially in their domestic life in the urban areas.

Signification of the one element of life was not ignorable from the nation’s viewpoint considering that there were probably around 11 million of recorded Indonesian citizens who had the profession as housemaids (PRT).

“It seems reasonable if further on housemaids were given an important position in the context of legal protection which acknowledge the role and rights and responsibility of that profession” Poempida disclosed to Business News (4/9).

Member of the Working Committee for the PRT Bill in House stated that the complexity of problems in the PRT profession was basically not different from that of other professions. However the specific nature of PRT was that basically the employers were individuals (famiies) not an organization while the scope of PRT activities embarked on the private zone of the employer.

Definitely PRT had direct access to private or confidential information of the employer as the result of direct interactions in thei daily activities. “Domestic security of the household very often relied on the integrity and responsibility of PRT” Pempida said.

As a profession generally held by the marginal’s, protection for PRT must be given and be managed on the basis of human rights principles; in this case the position of PRT was in the domain of law and constitution of RI.

The process of passing the PRT Bill was somehow dilemmatic in some issues: firstly, the basic mechanism of remuneration referred to the demographic social economy as parameter which could not be generalized in all of Indonesia. Secondly, the mechanism of control of the decision makers. Thirdly, formalization of the PRT profession which needed standardized competence and trainings. Fourthly, the legal process in case of dispute between the PRT and the employer. Fiftly, the career stairway of PRT which was non-existent.

Reactions from those in the position of employers was generally their dislike for formalities and administration formalities as consequences of the implementation of the PRT law in the future.

Commission IX of House had their commitment to answer all of the above challenges by scheming up a Law which was based on the Constitution of the Republic of Indonesia.

“Compilation of references and various simulations of system thinking were the base that I use as reference to be logically and with full sense of responsibility take part in the process of law making of this PRT Law” Pempida concluded.
Business News - September 7, 2012