LOW INCOME GROUP TARGET MARKET FOR USED CLOTHES

          Apparently smuggling practices were hard to eradicate because it had become a vicious circle which involved many parties and seving various interests. Smuggling of any commodity used clothes not an exception was done by greedy individuals who whished to reap big income by breaking export-import regulations. Indonesia was losing a great deal from these practices, materially or non materially.

            The criminal act of smuggling was extremely disadvantageous and distorted Indonesia’s balanced life. Loss borne by the state due to smuggling came to trillions of Rupiahs. Beside material loss, smuggling also incurred non material losses like death of the local garment industry which caused mass dismissal of workers, and this was not to mention the germs and bacteria stuck in the used garments. Meanwhile to import used clothes from abroad brought dishonor to Indonesia.

            Chairman of the Association of Indonesian Textile Industry (API) Ade Sudradjat disclosed that imported used clothes were particularly aimed at the marginal group. He stated that used clothes had potential market in Indonesia especially among the low income group, promised no added value to the domestic textile industry. For that matter Ade stated that he fully supported acts by the Tax Dept. in strengthening harbor customs gates to shield off invasion of used clothes. “In terms of health we are most disadvantaged as we have no idea about the hygienic state of the products and we never know who used those clothes before” Ade remarked.

           According to Ade, the invasion of used clothes was a indirect impact of International Fee Trade Agreement. That Free Trade might bing benefit to Indonesia, is should be responded to correctly nad make sure it was beneficial to growth, that Indonesia might enter the international marked. He underscored that if used clothes were allowed to enter Indonesian market it was almost sure to undermine marketing of domestic products; in the end the Indonesian market would be dominated by imported products only.

            He urged related Indonesian institutions, particularly law enforcers to foster collaboration more intensively. Ade rated that this firm and synergic commitment was an effort to crackdown on smugglers who operated in many regions. Indeed to abolish smuggling was not an easy task and needed a lot of patience, indeed it was a hard challenge afield. Therefore law enforcers who were in charge to monitor and control import must never be off guard in screening the goods entering the custom checkpoints. 

            Further Ade said that snuggling did not only disadvantage the state because they evaded taxes but also people’s economy because they robbed market share of the local industry. The smuggled goods was by far cheaper than locally produced goods sold by retailers. Many traders complained because the commodities they sell were outsmarted by smuggled goods. “If this condition were allowed to go on it could kill tax-paying traders” Ade concluded.    

DIRECTOR GENERAL OF TAX DENIES VIOLATION IN GOODS PROCUREMENT

         The Directorate General of Tax claimed there had been no violation in the procurement of information system in 2006 for the said institution. This was because information system equipments worth Rp 12.7 billion procured in 2006 had been distributed to operational units (including tax service centers in the regions) in all of Indonesia.

            Clarification by the Directorate General of Tax was in response to noise in some mass media publication lately about suspected law breaking in the procurement of information system in 2006 at the Directorate General of Tax, as detected by the Board of Financial Examination (BPK).

            According to the Dir. Gen of Tax in their press release on Monday (7/11) when examination was exercised, some documents (receipt) mentioned were not as yet received by the Head office of Tax Dept. so BPK was not sure about the existence of those documents.

            According to discussion between the Dir. Gen of Tax and BPK Examination Board on October 20, 2011, the Dir. Gen of Tax had formed a team in change of physical check up of the said goods. In the process of inspection, the Directorate General of Tax had been cooperative with the Supremen Court to clarify the matter.

APARTMENT LAW UNPROTECTIVE TO CONSUMERS

          Law no. 20/2011 on Apartment was rated as a historical mistake which repeated and did not protect apartment occupants but strengthened developers’ power instead. This was disclosed by lbnu Taji, Chairman of the Association of Indonesian Apartment during session of Overview of Apartment Bill 2011 in Jakarta recently.

            Lbnu stated that supposedly the Law of Apartment served as solution the Law of Apartment served as solution to disputes between developers and apartment communities and not create new and apartment communities and not create new problems instead. According to lbnu Law no. 20/2011 on Apartments was not entirely protective to consumers of Apartments especially in terms of procurement of land and shelter. The existence on the Board of Apartment Undertakers, Association on the Board of Apartment Undertakers, Association of tenants, RT/RW and Management was a historical accident that repeated yesterday.

            The underlying philosophy of the Regulation tend to become too liberal. The Article on gotong royong (Social solidarity effort) and the positive nature of Indonesian identity as implemented in community social activities managed by RT/RW which was formerly included in the Apartment Law, had disappeared from the new law. “Supposedly an RT/RW body is set up in the apartment. Social activities like Integrated Public Service (Posyandu), Health Center (PKK) could not possibly be managed by the private sector, i.e. Apartment Management. In fact we had set this forth five years ago”.

            However, lbnu admitted that there was a plus point in this new Apartment Law. Marketing stipulations and Buying-Selling Commitment Deed (PPJB) which was written in the Apartment Law had made insurance by Guarantor Body mandatory and could only be put in effect if physical construction had been 20% completed; this was regarded as a progress in consumers protection. As know, the root of problem was in the making of PPJB Deed which was not transparent and unbalanced and therefore failed to create peace and comfort to stay in an apartment.

            Meanwhile Chairman of the Housing and Urban Development Evaluation Body Zulfi Syarif Koto stated that he intended to safeguard regulations in PPJB and the Association of Apartment Owners and Tenants (P34SRS).

PERHUTANI’S INCOME ONLY 67 PERCENT OF TARGET

           Crisis in America and Europe apparently affected income target of Perum Perhutani which was only 67 percent by November 2011. Bambang Sukmananto mentioned income target of Rp 4 trillion by end of year was hard to attain. Last year Perhutani’s income was Rp 2.4 trillion.

            “What is there to say, economic climate is bad. Oud export is definitely affected. Perhaps of the Rp 4 trillion target only Rp 3 trillion could be met” Bambang stated on Tuesday (22/11). He stated that the market condition made it impossible for the company to maintain the profit figure.

            “But for Perhutani it’s no problem because we plan take quick action, we would enhance efficiency” The setback most strongly felt according to Bambang was export of Gondorukem to America and Europe. “But we plan to quickly shift destination to China who is also a competitor in exporting Gondorukem; although they also produce a great deal, market opportunity for Perhutani in China is still there” Bambang remarked.

            Although the global market was not favorable this year, Bambang was optimistic it would get better by next year. “We would prudently set target for next year, at least it should be the same as this year” he said.

            About the company’s plan for the future, Bambang added, Perhutani would continue to build derivative Gondorukem factory in Pemalang, and Bandung and Plywood factory in Kediri. “We will exercise investment because this year the climate is prospective Rp 300 billion is allocated for the three factories with target capacity of 48 thousand cubic meter per year and 17,500 thousand per year for derivatives of Gondorukem” Bambang was quoted as saying.

Ministry of Marine and Fisheries: SHIP ASSISTANCE PROGRAM HIGHLY TRANSPARENT

        The Ministry of Marine and Fisheries performs restructuring of fishing fleets, including constructing of lnka Mina vessel in 2010. Construction of the ship is based on budget submission (DIPA) where tender process id done through planning and supervisory consultant and realization of physical construction of ship. We are wiling to be monitored by anyone, including the press and non-governmental institutions. This is an era of transparency and ship construction process. Let the public report to us if there is an indication of violation, Balok Budiyanto, Director of Fishing Vessels and Fishing Gears of Ministry of Marine and Fisheries, told Business News.

        The restructuring program is not independent from the realization of three development pillars, namely pro poor, pro job, and pro growth. Construction of fishing vessel with a capacity of over 30 GT is intended to increase productivity of fishermen fishing boats. Fishermen welfare is the emphasis of the program. United States President, Obama, is willing to donate Rp 6 trillions for poverty elimination in Indonesia. So, we must be more responsive in eliminating poverty.

     The construction of fishing boats is initiated by the Central Java Governor in a meeting with Indonesian President. Governors all over Indonesia in February 2-3, 2010 at the Cipanas Palace, agreed to submit proposal for ship assistance. The capacity of the ship proposed is of a capacity of over 30 GT so that catch rate will be optimal. President Susilo Bambang Yudhonono responded positively and followed-up with 1,000 units of ship assistance from 2010 to 2014. The result has not been 100% evident, as until now, the program has been going on for only a year. Business feasibility will be apparent in 3-4 years.

         Based on monitoring and evaluation of the program, it is recorded that 41 ships have been operating, and 39 out of them have submitted production data. Two ships in Manokwari Regency and Sorong Municipality not yet submitted production data as they are still on the seas. While, five ships are not yet optimal as they are awaiting completion of document, including fishing license (SIPI). But ships which are awaiting completion of document, including fishing license (SIPI). But ships which are already operating, such as in Indramayu, have successfully increased their catch rate. All fishermen earn an income has increased to Rp 4 millions perform an inspection and hear directly from Joint Business Group (KUB) of Fishermen and Indonesian Fishermen Association (HNSI).

          Five ships that have not been operating as of November 2011 is because they not yet obtained SIPI for ships with a capacity of 30 GT. Operational delay occurs in Kota Baru Regency, South Kalimantan; Ende Regency, East Nusa Tenggara; Southeast Maluku Regency, Merauke Regency, Papua; and Pesisir Selatan Regency, West Sumatera. In addition to SIPI, fishermen are waiting for the completion of process of ship documentation arrangement by other institutions, such as measurement certificate, dead of ship registration (grosse akta), and nayigation equipment. Meanwhlie, fishermen in Pesisir Selatan Regency are facing operational cost problem. Regarding operational cost problem, they will partner with other businessmen. But, it does not mean transfer of ships to the businessmen. With the partnership, fishermen will obtain capital for operations. And, the catch can be sold to the businessmen concerned.

         The restructuring program has mobilized 46 ships up to November 2011, and 39 ships among them have submitted production data. The number will continue to increase, and it is predicted to in crease to 60 ships by end of 2011. The ship construction program is already in accordance with Presidential Instruction No. 01/2010 on Acceleration of Implementation of National Development Priority of 2010. Provision of 30-40 GT ships is funded by APBN-P of 2010. Meanwhile, allocation to regions and budget for ship provision highly depend on readiness of the regions concerned. The central government, in this case the Ministry of Marine and Fisheries, only allocates the budget. The cost of one ship reaches around Rp 1.5 billions which is used for construction of ship’s hull, engine, fishing gears, devices, equipment, consulting service, and cost of administration. The central government allocates the budget, and the technical matters are handled by the regional government.

          The mechanism of allocation of ship construction is proposal from Head of Provincial, Regental/Municipal Fisheries and Marine Agency to the Central Government, Afterwards, the Central Government allocates budget to work units (saker) of Provincial, Regental/Municipal Fisheries and Marine Agency. The Agency recruits planning and supervisory consultant on ship construction in accordance with fishing gears required by fishermen. Requirements of candidate ship operator are, amongst others, establishment of Joint Business Unit (KUB) or Fishermen Cooperatives KUB must have experience in ship operation.

           Hendra Pudiansyah from Indonesian Fishermen Association (HNSI) stated that the ship assistance program has been oriented toward bottom-up system. The government has accommodated aspirations of fishermen and coastal communities. Designation of location has been based on some points which are significant for improvement of welfare of fishermen. Considerations, like availability of fish resources, fisherman density, availability of seaports or fishermen centers, and other. Fishery centers can be used for place of mooring of ships with a capacity of over 30 GT, Hendra told Business News.

           And, there is also priority for minapolitan area so that the beneficiary target will not be missed considering that fishermen has formed a KUB or fishermen of fishing vessels and shall be able to take good care of the vessels.   

TAYN BRIDGE IN WEST KALIMANTAN TO BE CONSTRUCTED IN MID DECEMBER 2011

             Sei Tayan bridge in Sanggau Regency, West Kalimantan, is teady to be constructed. Construction will be started in mid December this year.

            The cost of the bridge construction is Rp 740 billions, and 90% of this amount is loan from the Chinese government. Construction of the project will take 900 days. “Maybe it can be completed earlier than that as there is no problem in land clearance like other projects”, said Director General of Highways, Ministry of Public Works, Djoko Muejanto after witnessing the signing of contract for construction of the bridge between China Road and Bridge Corporation PT Wijaya Karya and Tayan Bridge Project Work Unit in Jakarta on Monday (November 21).

            Tayan bridge is highly strategic as it is related to the development of Kalimantan as it us related to the development of Kalimantan as part of BIMPEAGA (Brunei Indonesia Malaysia Philippine-East ASEAN Growth Area) and ASEAN Highway as well as access in the south side of Kalimantan which has been broken. It is expected that the bridge having a length of 1,420 meters can become promoter of economic growth in the area. Moreover, West Kalimantan is one of national energy production centers (lumbung energi nasional).

            Plan on construction of Tayan bridge was initiated in 2002. The bridge,, which is located in Tayan Hilir subdistrict will connect Tayan City with Piasak, Sanggau Regency, West Kalimantan. The bridge is over Kapuas river. The first bridgen of 280 meter length and the second of 1,140 meter length pass through Tayan island.   

TO GRAB ASEN MARKET OPPORTUNITY

           Among the objectives high on the priority list in ASEAN’s collaboration masterplan was vision and blueprint for post 2015, with focus on distribution of development especially in regard to small business (UKM). Achievement in the execution of blueprint for ASEAN economic community was in the first pillar namely single market and regional production base, followed by the fourth pillar i.e. integration with the global economy, and the second pillar i.e. a highly competitive region. Meanwhile the third pillar, i.e. evenly distributed development still needed attention.

            The Government of RI was expecting that through leadership at the ASEAN 2011, Indonesia could increase per capita income. Beside augmenting the nation’s economy, Indonesia could contribute to the betterment of the world’s community. Indonesia must be able to benefit from the ASEAN market, for which competitiveness of Indonesian products especially small business (UKM) and micro must be promoted. ASEAN’s internal collaboration was of utmost importance for the members.

            Deputy Minister of Marketing and Business Network, the Ministry of Cooperatives and UKM, Neddy Rafinaldy stated that Indonesia’s UKM must strengthen characteristics and identity of products whereby to be competitive at the global market. According to Neddy, all player of ASEAN KUKM agreed to develop synergy through socializing (silaturahmi) such participation in expo’s. Now synergy had been attained, but members agreed to foster it toward ASEAN Economic Community (AEC) 2015. “Around 25% of products in circulat in ASEAN are Indonesian products and ASEAN is a potential market. Definitely Indonesia’s UKM must be able to grab the opportunity” Neddy remarked.

            UKM was as important factor to establish an inclusive and fair distribution in ASEAN, more than 96% of business units in ASEAN were small business (UKM) representing 99% of business in Indonesia, Singapore and Thailand. Data of ASEAN secretariat had it that UKM employed around 50% to 96% of workers, the investment constituted around 30% to 53% of total GDP and contributed around 19% to 31% of ASEAN’s total export. Furthermore, The Board of AFTA noted that intra – ASEAN trading posted an increase of 31,2% of the total USD 376,2 billion in 2009 to become USD 519,7 billion in 2010.

            Neddy underscored that UKM played an important role in ASEAN including Indonesia. The way it had been, UKM had proved their strong resistance against crisis and remained to be dynamic. For that matter Indonesia must involve UKM and make sure UKM was benefiting from ASEAN collaboration whereby to build and ASEAN which was inclusive, evenly distributed and strong and highly resilient.

            He further stated that Indonesia would open market access to national business people including UKM. Furthermore Indonesia would intensify dialogue with trade partners and draw investments from dialogue partners like the USA, Australia, India, Japan, Korea, China, Russia and New Zealand. Indonesia would enhance the role of ASEAN in East Asia, and the role of ASEAN after 2015. The Government of RI was continuing to discuss how to enable businesspeople to benefit from trade agreements signed so far and to maintain sustainable development.