Inflation Down In May

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

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

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

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

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

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

Ranking of Ten Banks Based on Credit

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

            

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

House Support Stringent Action On Tresspasising Foreign Fisherman

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

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

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

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

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

PLN and PT PAL Collaborate To Build CNG Natural Gas Storage

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

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

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

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

Four Of 12 ASEAN Connectivity Projects Ready To Be Built

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

          

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

           

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

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

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

Forests Concession Not To Be Expanded

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

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

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

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

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

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

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

In 2011 the Ministry of Trade Revitalizes 10 Model Markets

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

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

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

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

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

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