INDONESIAN CHAMBER OF COMMERCE AND INDUSTRY-CHINA COMMITTEE SHIFTED INVESTMENT TO CREATIVE ECONOMY SECTOR

Indonesian Climber of Commerce and Industry - China Committee (KIKT) has started to shift bilateral trade and investment cooperation between both countries to creative economy sector. Yet, however, KIKT is still co-facilitating China’s investment in other sectors, including mining, forestry, oil & gas, and other sectors. “We see that preliminary in­vestment in creative economy sector is inexpensive. Therefore, we urged Chinese investors to build cre­ative economy industry in Indonesia, particularly films and computer games”, Adi Harsono, Vice Chairman of KIKT, told Business News (11 /19).

China relies on Indonesia’s natural resources in trade and investment cooperation. Commodities, like asphalt, oil, gas, coal, minerals, and forestry products are favorite commodities. But, KIKT should find a strategy so that the investment value is not too high and more reasonable. The film titled “Eat, Pray, and Love, which shooting took place in Bali, has been going global. This is en example of creative economy industry.  We wish that China will also make an in­vestment in the film industry.”

The Indonesian government has supported many Creative economy activitie,. and has been in­creasingly lured by the success of South Korea. The Ministry of Tourism and Creative Economy accommo­dated animation and film industry. “Chinese investors also consider that investment in the culinary sector is very promising. There are many restaurants serv­ing Chinese dishes which are liked by foreign tourists visiting Jakarta.”

The Ministry of Tourism and Creative Economy planned to provide low import duty facility. Devel­opment and competitiveness of national film industry still needs imported film production equipment from overseas. So, with low import duty, film production equipment will help creative economy community. “The Ministry of Tourism and Creative Economy has formulated sixteen creative industry sectors, includ­ing printing industry in the form of reading materials, comics, animation, and other.”

The government has conducted an in-depth study on creative industry since 2007. This is the time when President Susilo Bambang Yudhoyono (SBY) and the Indonesian Chamber of Commerce and Industry (Kadin) group visited creative economy ac­tivities in Korea. Presentation of the Korean Knowl­edge Minister at that time urged President SBY to formulate creative economy of Indonesian version. Korea’s creative industry cannot be released from the awareness and the nationalism attitude of the Korean people on their nation and country. So, when an eco­nomic crisis hit Korea around 1998. Korea’s economy almost reached a lowest point. But, the Korean people immediately moved by contributing jewelry and mon­ey to Korean banks so that the banks were able to maintain economic activities in Korea. “Korea’s econ­omy almost collapsed. But, the banks, with contribu­tion support from the Korean people, have helped the country. Then, they thought about creating an indus­try that does not spend much of state finances. Their government collected the best event organizers and arranged various kinds of creative economy shows, including film industry, musical entertainment, and television drama. So, Korea has started developing creative industry since 1998.”

A French expatriate, Christophe Dorigne Thomson, considers that Jakarta as the capital city of Indonesia is potential to become a big city in the world. Jakarta, like other cities in the world, relies on services sector in accelerating its economy. “Paris is renowned and is familiar not because of the work of the French citizens. But, it is also the perception of foreign people that see the beauty of Paris and promote it from mouth to mouth. SO, there is an increasing number of tourists visiting France. Jakarta could become a big city like Paris, and maybe it is through novels”, Christophe, a novel write titled “Jakarta”, told Business News (11/19).

The novel titled “Jakarta” does not tell about the negative side of Jakarta. On the contrary, it tells about the positive side that describes Jakarta as a big city. The novel tells about a man named Edwin who works as a hired murderer. Edwin who was a gradu­ate of an elite school in France received many job offers. But, due to the tragedy that hit his younger brother, Edwin changed his perception. In the midst of his confusion, he met John who offered him an improper job as a hired murderer. “The figure Edwin is a half fiction figure and half my own experience.”

To Chris, the novel could become a most ef­fective tool to various ideas for many people. The idea was mainly intended to describe the other side of Jakarta. Even though Edwin has traveled to some big cities in the world, like China, India, Japan, Middle East, and Europe, but his long journey ended in Ja­karta. “I see that Edwin’s travel around the world is to describe Jakarta as a new world’s centre in the future.”

The novel with a cover picturing a Durian Weapon getting into a globe is the Chris’ first mas­terpiece. He admitted that he knew Jakarta from In­donesian people living in Paris. Then, he actively in­teracted through the social media, including Twitter and Facebook. “Westerners nicknamed Jakarta the Big Durian”.

NATIONAL LAND AGENCY AND MINISTRY FOR ACCELERATION OF DEVELOPMENT OF UNDERDEVELOPED REGIONS UTILIZE ABONDONED LAND FOR COMMUNITIES

In Indonesia, there are 183 underdeveloped regions. But, in fact, these regencies have many leading commodity potencies that are not yet developed optimally. Helmi Faishal Zaini, Minister for Acceleration of Development of Underdeveloped Regions, stated this matter.

The potency has not been utilized optimally is due to inadequate availability of land, unmanaged potency, lack of infrastructures in production centers, low quality and productivity of output, in optimality of market and capital access.

“In any underdeveloped regions that I visited, I always found abandoned land. Therefore, we cooperate with the National Land Agency to perform agrarian reform. Abandoned land in the regencies are returned to the communities”, he said.

Priority program of the Minister for Accelera­tion of Development of Underdeveloped Regions is District's Superior Product (Prukab) adopting Thailand’s One Village One Product concept. Each regen­cy is given freedom to determine its leading product, then there is a stimulant fund from the Ministry for Acceleration of Development of Underdeveloped Regions for development of the region concerned.

Ministry for Acceleration of Development of Underdeveloped Regions also coordinates with other ministries in building infrastructures, capital access, and marketing access. “Prukab starts from Bangka. “We provide the local community with capital to plant vegetables on 1 hectare of former tin mining reclamation land for each household head. Those who formerly did not have income, now earn income of Rp 2 million/household head”, he said.

Through coordination with the National Land Agency, it is expected that every year in each regency there is 1,000 hectare of abandoned land returned to the community. “The regency shall report to us about the location of the abandoned land. Then, the Notional Lend Agency will arrange the administrative and legal processes of the land concerned. After that, community may choose whether it will be in the form of pinjam pakai (borrow and use) or any other form. The important thing is that the community will have access to land”. Helmi said.

After it is achiever the following program is to increase community capacity and increase of harvest quality. “Many leading commodities originate from underdeveloped regions. A largest part of Indonesia’s coffee and cacao is produced in under­developed regions. If the raw material is good, we will attempt so that the product could go to further downstream processes”, he said.

Head of National Lend Agency, Hendarman Soepanji, said that National Lend Agency cooperates with the Ministry for Acceleration of Development of Underdeveloped Regions for the provision of state land, which is formerly abandoned land, to be utilized by communities. The National Land Agency has the responsibility to provide land and to perform land cer­tification.

Yuswanda Tumenggung, Deputy for Land Administration and Arrangement of the National Land Agency, said that total size of abandoned land identified is 7.2 million hectare. Most of them are former HGU (Cultivation Right) owned by large plantation firms, and some of them are shrimp ponds. There is also land whose location permit is unused.

After a detailed identification, estimated to­tal of abandoned land that can be used is 4.2 mil­lion hectare. “The problem is that to discipline use of abandoned land is not easy as they are spread­ing everywhere”, he said. The disciplining process is also not easy because even though it has been stated clearly by the Law, abandoned land can be taken over by the state, but the administrative process is not easy.

After giving 3 times reminders, there are tens of HGU and location permits taken over by the National Land Agency. Around 50% of HGU own­ers filed lawsuit to the court, and the National Lend Agency loses in almost 50% of the cases. After the land is distributed, it must be clear who obtains the ownership right. “'We should prevent a case like core plasma oil palm plantation. In this case, what hap­pened is not lend distribution, but land reconcentra­tion because the plasma plantation is sold and owned by 1 or 2 parsons”, he said.

Business News - November 21, 2012

BUSINESS CLIMATE OF PULP AND PAPER INDUSTRY INCONDUCIVE

The government has not provided a conducive business climate for the development of pulp and paper industry. “Many government policies on this sector are inconsistent”, said Misbahul Huda, Chairman of Indonesian Pulp and Paper Association.

For exampiu, land provision for Industrial For­est. Many concessions issued by the Government is not yet clear and  clean therefore businessmen have difficulty in out land as they come face-to-face with the local community. Other problem is import of waste paper.

Now, import of waste paper must be verified by Sucofindo and Surveyor Indonesian by applying Technical Verification of Import. The procedure is quite complicated so that importers are unwilling to import waste paper to Indonesia and shifted waste paper import to China and India. Consequently, Indo­nesia’s recycled paper industry could die.

Waste paper is used as raw material for pack­ing paper industry and newsprint industry. Around 70% of its demand must tie imported. “In this situa­tion, there are some pulp and paper industries who reduce production, even there are some who stop their operations, particularly packing paper and newsprint. If this continues, Indonesia could become net import­er of packing paper and newsprint”, Huila said.

Indonesia’s pulp end paper market experienc­es decline of demand. This can be seen from produc­er’s stocks which usually reach 2,000 ton, but now it only reaches 4.000 ton.

Main world’s pulp and paper markets are America and Europe. Almost all pulp and paper indus­tries targeted these two continents. The crisis which is happening at present causes demand from these two continents in decline.

In such condition, China and India started to shift their markets, and Indonesia is one of their tar­get markets. “Our export is declining, and now we come face-to-face with imported paper from China and India”, he said.

China has problem with its domestic market­ing. As the world’s biggest exporter, demand for pack­ing paper in China is very high. Now, China’s export increasingly declines so that demand for packing paper also declines. Consequently, they seek new markets, and Indonesia is one of its main targets", he said.

In good condition, price of pulp could reach USD1,000/ton, while price of paper could reach USD1,400/ton. But, in condition of sluggishness of demand, price of paper reaches USD800 – 850/ton and price of pulp USD650/ton. “This is an abnor­mal price because paper price should be more than USD250/ton if compared to pulp price”, he said.

Other anomaly is decline of paper demand in advanced countries since July. Normally, paper de­mand in advanced countries in July rises sharply due to new school year, and near the winter season pulp and paper producers stop production so they buy pulp and paper from tropical countries. In the third quarter of this year, production declines by 2%-3% if compared to the second quarter.

In addition to the worsening of world’s economy, other factors that cause in demand for Indonesia’s pulp and paper is massive campaign by foreign non-governmental institutions attacking Indonesia’s pulp and paper product as the main source of environmental harming. Refusal from Disney and con­tract cancellation by several companies in Australia are also a form of attack.

“In fact, they were not purely campaigning about environmental saving. They brought the in­terests of business competitors. This is evident that they were rampantly attacking Indonesia’s pulp and paper industry, while pulp and paper industries of other countries are untouched by them”.

Business News - November 21, 2012