HOUSE SUPPORTS STATE-OWNED COMPANIES INVESTMENT PLAN

Commission VI of Parliament supported State Owned companies to invest in the real sector, especially in the effort to promote public service and social welfare of customers through infra-structure development, such as building high quality modest apartments (rusunami, rusunawa) that are affordable. This was among the conclusions of a hearing session of Commission VI of House with the Deputy of Banking and Finance, Ministry of State Owned Companies Affairs with PT Jamsostek, PT Askes, PT Taspen, and PT Asabri at the House of Representative.

Furthermore Commission VI of Parliament requested the Deputy of the Minister of State Owned companies to optimize performance in the aspect of management, operational as well as financial. The objective was to encourage state owned insurance companies to maintain efficiency, efectivity and Good Corporate Governance (GCG) in all business operations.

In anticipating the implementation of Law on National Social Welfare System, Commission VI of House had requested the Ministry of State Owned Companies to synchronize roadmap and scheduling of stipulated of the type of legal status of four state owned insurance companies including the aspects of strategy, measures to be taken, and cost and risk calculation of the entire process.

For that matter, State owned Insurance Companies needed to prepare mechanism of public service for the lower income group and Fund Management expected from the State Budget based on the Law of the National Social Welfare System.

INDONESIA SHOULD IMPLEMENT AIR TRANSPORT MODERNIZATION IN ORDER TO GAIN A SIGNIFICANT BUSINESS POTENTIAL

Indonesia must do modernization of the air transport sector to improve services in order to gain a significant potential in this business sector.

Improvement of equipments, infrastructures, and tariffs should be implemented. The Indonesian air transport business has a very significant market potential because currently less than 4 percent of Indonesian population (230 million people) travel by air.

In addition to that, the Indonesian territory which consists of 17,500 islands also gives contribution to the development of air transport business. Air travel could save time. There are many old equipments that must be replaced.

“We know that transportation in Indonesia needs improvement from time to time. Many of our equipments should be modernized because they were already old”, Freddy Numberi, Indonesia’s Minister of Transport, told Business News.

Improvement and modernization have been implemented by Garuda Indonesia. This company has replaced some of its airplanes and will buy some in the framework of improvement of services.

“Garuda has started to implement modernization. We expect that if this could be done properly, our transportation business could improve”.

Tariff should also be increased, but within a range which is not be a problem to the customers. Air transport tariff in Indonesia per kilometer is the lowest in Asia. And, this will hamper business acceleration in this sector.

“Tariff is actually a separate problem, but we do as much as possible to maintain a reasonable cost/tariff so that if there is an increase in tariff, it would not be too much a problem to the customers”. The trend is that the number of passengers will increase in future.

Regarding attempts to free 37 Indonesian air transports from flight ban to European Union, this matter is still in process.

European Union imposed flight ban on 51 Indonesian airlines in July 2007 due to rampant plane accidents that had caused 250 people dead.

There should be coordination with the European Union so that Indonesia will be able to improve standards of flight safety.

European Union had lifted flight ban on four Indonesian airlines in July 2009. These airlines were Garuda Indonesia, Mandala Airlines, Airfast Indonesia, and prime Air.

Preventing Concentration of Residences and Industries in Shallow Water Areas

Spatial plan that puts residence and industry concentration on the Northern Coast Java (Pantura) is a mistake because placement of residences and industries face to face with shallow waters could damage the sea water which is rich in fish. Mohammad Hasroel Thayib, Head of Board of Experts of Indonesian Environmental Intellectuals Association (Perwaku), told business News.

Spatial plans in Indonesia, until this day, put residence and industry concentration face to face with shallow waters, amongst others, Northern Coast of Kalimantan. While, shallow waters are fertile areas for fish.

Fish could well-developed in shallow waters since mineral content only exists in 50-meter depth with sufficient sunlight, sufficient oxygen, and a large amount of phytoplankton which is sources of food for fish. If the condition of the water in that area is damaged, sea biota could not survive. If we look from above, the sea water along Pantura was dirty. It would be difficult for phytoplankton to survive in such area since the sunlight was prevented by mud. And, phytoplankton is sources of food for the fish. Another effect was that income of farmers in the Northern Coast could decrease.

Residences and industries should be facing deep waters. Fear of abrasion could be prevented by planting mangrove trees along the coasts. “Basically, prevent concentration of residences and industries which is face to face with shallow waters. In North Sulawesi, it doesn’t matter because Pacific Ocean is a deep sea. In Papua and East Kalimanatan, this could also be done. But, not in West Kalimantan, South Kalimantan, and East Sumatera because these are shallow water areas.”

Other than preventing concentration of residence and industries in shallow water, inter-regional spatial plan related to management of river areas must also be modified. For example, the Citanduy River area that flows to Segara Anakan lake that separates West Java and Central Java areas. Because the responsibility of government’s administrative unit is based on rivers, it is difficult to decide who will be responsible if Segara Anakan Lake is polluted due to the Citanduy River flow. Therefore, responsibility of government’s administrative units should be decide based on the river basin, or the river it self.

Economic growth in 2009 expected to exceed 4.3 percent

National economic growth in 2009 is expected to exceed 4.3 percent, Central Bureau of Statistics (BPS) chief Rusman Hermawan said here Wednesday. "Although the official figures will only be made known by February 10, it seems economic growth in 2009 will exceed 4.3 percent," he said. Rusman said economic growth in 2009 was particularly driven by growth in the fourth quarter when exports turned around significantly to positive from negative three months earlier. In the fourth quarter of 2009, the BPS recorded exports grew 23 percent year-on-year but annually they dropped 15 percent.
Source: AntaraNews.com, 3 February

Ministry Seeks Delay in Disposition of Indonesia's State Banks

The Ministry of State-Owned Enterprises has asked Bank Indonesia to give it another two years to comply with the "single presence" policy, which requires that the country's four state-owned banks be merged, shifted to a joint holding company or sold. Parikesit Suprapto, the ministry's deputy for banking and financial institutions, said it will be difficult to comply with Bank Indonesia's deadline of the end of this year. Issued in 2007, the single presence policy is aimed at consolidating the banking sector and improving transparency. It requires any majority shareholder in more than one bank to merge the banks in question, from a joint holding company for them or divest its shares in all but one bank.
Source: thejakartaglobe.com, 3 February

Garuda Moving Ahead with IPO Plan

National flag carrier PT Garuda Indonesia will pick underwriters within two weeks for a planned initial public offering of up to $400 million to be launched by the third quarter, its chief executive said on Wednesday. Emirsyah Satar said Garuda's IPO would help fund its fleet expansion and was on target to be launched either at the end of the second quarter or early in the third quarter of 2010.
Source: The Jakarta Globe, p. 82, 4 February