BUMN TO JOIN CONSORTIUM FOR SUNDA STRAIT BRIDGE PROHECT

The Sunda Straits Bridge Project (JSS) would be executed, but the investor structure would be changed, with the entry of State Owned Companies (BUMN) and the private sector. “The Sunda Straits bridge would be executed but by involving BUMN” Djoko Kirmento, Minister of Public Works disclosed in Jakarta on Friday (19/11).

PT Grehe Banten Lampung Sejahtera (GBLS) as initiator of JSS would remain to be main investor collaborating with two provincial Governments, i.e., Banten and Lampung. So although the private compo­nents would be reduced with involvement of BUMN, the name of company to undertake the project re-Maimed the same.

Separately Jusuf Kalla stated his opinion that the private sector might build a JSS project worth Rp 100 trillion, as long as not all of them was guaranteed by the Government. “If the entire project was totally guaranteed by the state, in case of wrong design or mismanagement, who would bear the loss? That must not happen” Jusuf Kalla said.

About the discourse that the project which connect Java and Sumatra would by financed by APBN State Budget, JK had no objection to it. “This project is the private idea isn't it? I agree, as long as the private sector would bear the consequences. It would be better as long as the stets don't have to bear the consequences. The case is different from electricity subsidy, it must be guaranteed. But this JSS project is high risk project, the consequences would be tremendous.

Business News - November 19, 2012

PROVINCES IN JAVA CONTRIBUTED 57.52% TO GDP

According to the Central Board of Statis­tics (BPS), Indonesia’s economic structure in quar­ter II/2012 was still dominated by provinces in Java (West, Central, East Java) which contributed 57.52% to GDP followed by Sumatra 23.83%, Kalimantan 9.26%, Sulawesi 4.75% and the rest 4.64% by other provinces.

In Java, the provinces which contributed most was Greater Jakarta (DKI) 16.20%, East Java 14.86%, West Java 14.24% and Central Java 8.24%. Meanwhile in Sumatra 3 provinces which contributed most were Riau (7.00%) North Sumatra (5.23%) and South Sumatra (3.08%). In Kalimantan, the province which contributed most was East Kali­mantan (6.11%) while in Sulawesi the province which contributed most was South Sulawesi (2.41%).

In terms of expenditure, the component of Formation of Gross Fixed Capital (PMTB) based on constant price 2000 was having increase tram Rp 164,1 trillion in quarter II/2012 to Rp 169.0 in quar­ter III/2012 or growing by 2.94%. The component of Household Consumers Expenditure was also posting increase from Rp 356.8 trillion in quarter II/2012 to become Rp366.4 trillion in quarter III/2012 or grow­ing by 2.71%.

Other GDP components which posted down­turn was Government’s consumption expenditure from Rp 49.1 trillion in quarter II/2012 to Rp 49.0 trillion in quarter III/2012 a downturn of 0.07%. Export of goods and services from Rp 306.7 trillion in quarter II/2012 to Rp 306.1 trillion in quarter III/2012, a downturn of 0.21%, and import of goods and services from Rp 258.3 trillion in quarter III/2012, a downturn of 8.36%.

To calculate on the basis of marketprice, the Gross Fixed Capital Formation (PMTB) rose from Rp 672,0 trillion in quarter II/2012 to become Rp 704.3 trillion in quarter III/2012, and Household Consump­tion Expenditure also rose from Rp 1,097.1 trillion in quarter II/2012 to become Rp 1,163.2 trillion in quar­ter III/2012.

Other GDP components which were also posting downturn was Government Consumption Expenditure from Rp 184.3 trillion in quarter II/2012 to become Rp 178.8 trillion in quarter III/2012, ex­ported goods and services from Rp 499.9 trillion in quarter II/2012 to become Rp 491.4 trillion in quarter III 2012. The same applied to Goods and Services from Rp 545.4 trillion in quarter II/2012 to become Rp 504.5 trillion in quarter III/2012.

Growth of GDP in quarter III/2012 compared to same quarter of 2011 supported by Gross Fixed Capital (PMTB) amounting to 10.02% and Household Consumption Expenditure 5.68%., while ether GDO components which were pasting downturn were Government Consumption Expenditure which went down by 3.22%. Export of goods and services also dropped by 2.78% and import of goods and services dropped by 0.54%.

Accumulative economic growth up to quar­ter III/2012 compared to same period of 2011 all GDP components were posting increase in terms of expenditure. The biggest increase was in Gross Fixed Capital Formation (PMTB) rising by 10.77% followed by import of goods and services 6.04%, Household Consumption Expenditure 5.29%, Government Consumption Expenditure 5.29%, Government Consump­tion Expenditure 2.93% and exported goods and ser­vices 2.21%.

The main source of economic growth in y o y basis per quarter III/2012 was Household Consump­tion Expenditure 3.12%. The next biggest contribu­tion was Gross Fixed Capital Expenditure (PMTB) 2.43% Other components posting downturn were ex­ported goods and services down by 1.38%, Govern­ment Consumption Expenditure dropped by 0.26% and imported goods and services down by 0.02%.

Structure of GDP by expenditure in 2011 or 2012 posted no notable change. GDP structure by expenditure in quarter III/2012 was still dominated by Household Consumption Expenditure which gave the biggest contribution (54.79%) followed by Gross capital Formation Wfv11731 33.18%. Exported goods and services was 23.25%, Government Consump­tion expenditure 8.24%. Meanwhile imported goods and services was posted at 23.76%.

 

Business News - November 19, 2012

HAJ PILGRIMAGE MANAGEMENT NEEDS IMPROVEMENT

Chairman of Commission VIII of House, Ida Fauzyah rated that the management of haj pilgrims this year was relatively better in spite of still some hindrances which should have been anticipated by the Government. For example in terms of sleeping accommodation many things were not in accordance with contract, and there were concentration of pilgrims which did not meet security requirements. This was disclosed after meeting with the Government of South Kalimantan Rudy Arifin.

According to Ida Fuziah, what needed to be improved in services for pilgrims were security service by pilgrims as crime was still prevalent there. One of the reasons was low security-personel to pil­grims ratio which had caused Indonesian pilgrims be the victims of thieves while some were even molest­ed. So the problem was low police-to-pilgrims ratio.

As with travel agents it was necessary to reform travel bureaus specializing in handling haj pilgrims. Many haj pilgrims had been cheated by fraudu­lent travel agents and the victims numbered 1,500 pilgrims. The cases were cheating which were acts of crime. Therefore the Ministry of Religion must fol­low up the case and take legal actions involving the Police not overlooking the act of punishment-and- re­ward for those involved.

In terms of health, haj candidates needed overall preparation so as soon as they arrived in Mecca they could perform their rituals earnestly and sol­emnly.

Illumination and publication was necessary for the people who wished to apply for Haj pilgrimage. If they intended to go on pilgrimage the regular package way, they had to sign in to the Ministry of Religion. Meaning they had to register by the right procedure not to be cheated by anyone who prom­ised to arrange faster quota. There were many cases where Haj applicant wished to go on pilgrimage the fastest way and not to wait for too long but ended up in paying high price without getting the right service as they deserved to get.

Furthermore the Government must announce to the public which travel agent rendered extra ser­vice end which agency merely masqueraded. In fact the masqueraded travel agents had no formal opera­tion permit as formal pilgrimage organizer, they were mostly nothing but regular travel agents. The Government was expected to announce as means of sanc­tioning.

The Supervisory Team of Haj Organizer in House was expecting trans-sectoral coordination be­tween the Ministry of Religion and Ministry of Health to discuss health service plan like assigning doctors on duty who were scarce. Honorarium for specialist doctors should not be the same as that for standard doctors the way it was happening now. This was dis­closed by member of Pilgrimage Supervisory Team of House Eva Kusuma Sundari to the press.

Other problems in pilgrimage organizing af­fairs the worst being was insufficient supply of tents by the Government of Saudi Arabia in Mina. This forced pilgrims to sleep like pack of sardines, they could not even straighten their legs or change posi­tions. We were not expecting pilgrimage trips which tolerated bad service, public service must be prepared as early as possible.

Furthermore Eva underscored that the Ministry of religion must play effective diplomacy to demand better service for pilgrims to the Government of Saudi Arabia. We expect that Commission VIII of House could firmly set a benchmark of service standard to serve as reference. Therefore it was necessary to scheme up a standard of improvement comprehensively by the Ministry of Religion. House must prepare a checklist of what was done and what must be done in due course.

Business News - November 19, 2012

GOVERNMENT URGED TO SHORTEN DISTRIBUTION CHAIN OF F&B

Performance of national food & beverages in­dustry today had been disheartening. The fact that F&B industry had not been contributive to the maxi­mum was evident in the rating of competitiveness which was still low. One of the reasons why com­petitiveness of national F&B industry was low was the long distribution chain and high distribution cost. The long distribution chain and high logistics cost put Indonesia’s rating of competitiveness way below Ma­laysia, Brunei Darussalam and Thailand.

To quote report of the Association of Indo­nesian F&B producers (GAPMMI), Indonesia’s com­petitiveness was in the 50th position way below main competitors like Malaysia in 25th position, Bru­nei Darussalam 28^th, and Thailand 38th. Chairman of GAPMMI Adhi S Lukman in Jakarta disclosed in Ja­karta on Tuesday (13/11/2012) that a long and timely distribution system made logistics expenses high. The long distribution chain factor jacked up product price up to 15% which lowered competitiveness of Indone­sian F&B products. Adhi mentioned that in Southeast Asia increased product price was only 7%, in Japan and Malaysia even only 5%.

The low competitiveness of F&B products accounted for deficit in Indonesia’s trade balance. Lest year trade deficit in F&B sector came to USD 908 million. Data of GAPMMI had it that up to May 2012, trade balance in F&B trading posted deficit of USD 170 million, lower than in the same period of previous year at USD 362 million. Adhi reminded that in the free trade ere Indonesia was sitting duck to other countries. The point was that Indonesia’s vast population posed as the biggest market for F&B prod­ucts of other countries. “If imported F&B products were let to flaw in, our deficit would be even wider.” Adhi remarked.

Adhi mentioned that a number of problems which hindrance the national F&B products were among others poor infra-structure which accounted for high logistics cost, undersupply of raw materials, and weak tariff barrier for imported products. The point was to strengthen competitiveness of Indonesia’s F&B products it was necessary to ensure sustainable sup­ply of high quality raw materials whereby to produce high quality and affordable products. Adhi added on that Indonesia’s import tax was liberal, i.e. only 6% to 8%. And yet other countries were protecting their own F&B products by imposing high import tax, for example China 9.1%, Korea 12.1% and India 13%.

Furthermore Adhi disclosed that today around 40% of F&B products in circulation in Indonesia today came from ASEAN countries. Of that 40% around 30% F&B products at the value of Rp 3 billion to Rp 4 billion originated from Malaysia. According to Adhi, the products from Malaysia were mostly light snacks and coffee, He saw that Malaysia’s market share of F&B products in Indonesia was notably high because Indonesia and Malaysia had similar culture and same preference. According to Adhi, Indonesia must be ready to compete or collaborate within ASEAN Free Trade or even any country at all. He rated that Indonesia had great potentials in F&B industry. Fortunately Indonesia excelled in terms of food raw materials. At home in Indonesia, local F&B products still command­ed over the market. In the future ha said, Indonesian F&B producers must build market networking and develop business in ASEAN. “The market potential of ASEAN is great, and this is a golden opportunity to grab” Adhi concluded.

Business News - November 19, 2012