Indonesia Q1 GDP growth seen at 4.4 pct y/y -survey

By Emmy Zumaidar

JAKARTA, May 21 (Reuters) - Indonesia is expected to report on Monday that the economy grew about 4.4 percent in the year through the first quarter, supported by record low interest rates and relative political stability, a Reuters survey showed.

But five economists surveyed on Friday said growth was narrowly focused, with private consumption the major contributor while investment and exports were still lacklustre.

The government is due to release gross domestic product data for the first quarter on Monday at 0630 GMT.

The survey shows that economic growth hardly picked up since the fourth quarter, which had expanded 4.35 percent from the year earlier.

The growth rate would also be too low to create enough jobs to counter unemployment, which is likely to be a key issue along with the economy in the country's first direct presidential election on July 5.

However, economists said the shallow growth was likely to prompt the central bank to keep domestic interest rates at historic lows, despite a weaker rupiah, to try to boost economic activity.

That could be a relief to bankers, car dealers and property developers, whose first-quarter financial performances have been among the strongest in recent years because of low rates.

"Several indicators of the real sector's performance have shown better numbers in the first quarter, such as sales of motorcycles, cars, and cement and electricity consumption," Citibank economist Anton Gunawan said.

Economists said relative political stability during the quarter had boosted consumer confidence.

The deadly bombings and violent street protests that have hit Indonesia in recent years were largely absent in the quarter and campaigning for April 5 parliamentary elections was peaceful.

The Jakarta stock index reached a historic high of 824.5 points last month due in part to expectations the low rates, currently at 7.32 percent for benchmark central bank paper, would boost corporate profits.

CHRONIC UNEMPLOYMENT

But over the long term, the private consumption that accounts for 70 percent of GDP will not be enough for Indonesia to maintain current growth rates, let alone raise them to at least the six percent needed to deal with the country's unemployment woes.

GDP growth of 4.1 percent last year created new jobs for just 1.6 million people, compared with 5.2 million who entered the labour market in which 40 million were already either unemployed or underemployed, a finance ministry document showed.

Investment has also been far from encouraging, economists said.

Imports of capital goods dropped 6.2 percent in the year through the first quarter. Foreign investment approvals remained weak during the quarter.

Judging from the expected modest first-quarter performance, Indonesia is likely to post full-year growth of 4.5 percent, an earlier survey showed.

The government has forecast growth of 4.8 percent this year.

Novus eyes proposed higher Medco takeover bid

SYDNEY, May 24 (Reuters) - Australia's Novus Petroleum Ltd said on Monday it was assessing a proposed hike in a takeover offer by PT Medco Energi Internasional Tbk , Indonesia's largest listed oil and gas firm.
Medco said on Friday it may raise its bid for Novus by nine percent to A$1.90 a share, pending successful completion of negotiations with an international bank for financing.

Last month, Novus's independent directors recommended shareholders accept a rival A$345 million ($241 million) bid from management buyout group Sunov Petroleum Pty Ltd, in the absence of a higher offer.

Medco's current A$1.74 a share cash bid values Novus at A$320 million, while the new bid would be worth A$350 million.

Novus shares rose three cents to A$1.90 in early trading.

Medco expects to give an update on the offer by May 31, though Novus said it hoped to obtain the information earlier.

Sunov raised its bid to A$1.85 a share cash in late April from A$1.77 a share and extended its offer until June 3.

Novus shares added 1.6 percent in early trade to A$1.90 in a flat overall market. ($1=A$1.43)

Wow indonesian firm will buy Australian energy company! should be good for the indonesian economy though :)


cheers

Monday May 24, 6:10 PM

Indonesia's economy up nearly 4.5 percent on local spending

Indonesia's economy grew 4.46 percent in the first quarter of 2004, slightly above expectations due to strong consumer spending.

But the economy is still growing at a slower pace than other Asian nations, reflecting subdued exports and moribund investment.

The official Bureau Of Statistics said Monday that Indonesia's economy grew 3.54 percent compared to the previous quarter. Economists polled by Dow Jones Newswires had forecast the economy would grow by 4.32 percent on year and 3.02 on the quarter.

"The economic growth during the first quarter was mainly driven by household consumption," said La Ode Syafiuddin, a deputy chairman of the bureau. Households spent 5.71 percent more in the quarter compared to the same period of last year.

Economists expect the economy will grow 5 percent this year, in line with government targets. The economy grew by 4.10 percent last year.

"The 5 percent growth forecast for this year is intact, but it's not as robust as other Asian countries," said Song Sen Wun, a regional economist at G.K. Goh Research Pte. Ltd.

The economy remains overly reliant on consumption spending, analysts say. With interest rates expected to rise later this year, in line with an expected tightening of U.S. monetary policy, the economy could be on shaky foundations, they add.

Foreign investment remains in the doldrums, which is holding Indonesia back from attaining a potential growth rate of 6 percent or more, according to multilateral agencies such as the International Monetary Fund.

Just for your info, Susilo Bambang Yudhoyono and Yusuf Kalla (a presidential-VP pair) are promising an average GDP growth of 6.6% from 2005-2009.
That sounds like a lofty goal...though probably achievable with sound policies and increased spending on infrastructure.

guys, the rupiah slumped to 9260 or something today..and the JSX fell 15 points..
I'm getting a bit worried about macro stability now...

Shouldnt be worried about JSX, because JSX is now up 5 points and still at the best ever points in the lifetime, remember last year JSX was up 70% making it the best perfomer after thailand, now JSX is still up 9%, so its still at their best pace.

About rupiah, its just because US want to increase their interest rate as many other asian currencies also fell...including the aussie dollar and thai baht, I think this level is still comfortable though, as Bank Indonesia predicted its just temporary. Indonesia macro stability 2003/2004 is still very stable, as you know our GDP is higher than expected in the 1st quarter, but we still need to create more legal reform and security to the investment otherwise our GDP will only stuck below 7%

cheers

Sales of Motorcycles Skyrockets in Indonesia

JAKARTA, May 26 Asia Pulse - Sales of locally produced motorcycles in the country surged by an unexpectedly high rate of 42.36 per cent year-on-year to 1,176,560 units in the first four months of this year, producers said.
Chairman of the association of motorcycle producers (AISI), Ridwan Gunawan, yesterday saidthe increase was predicted only by 10-15 per cent because of fears of market instability, with the legislative election early in April to be followed by the presidential election in July.

Gunawan said the unexpected rise in demand caused problems in supply from AISI members.

Based on data at AISI, production totaled 1,174,390 units in the January-April period this year, up from US$40.94 from the same period last year.

Last year, the country produced 2.81 million units of motorcycles with sales totaling 2.82 million units (not including sales of imported products).

Indonesia is third largest market and producer of motorcycles in the world after China and India.

(ANTARA)

Jakarta expects to revise up '04 asset sales target

JAKARTA, May 26 (Reuters) - Indonesia expects to revise up its 2004 budget asset sales target to 15.4 trillion rupiah ($1.67 billion) from an earlier plan of 10 trillion rupiah, a senior finance ministry official said on Wednesday.
"We expect (total) asset sales in the 2004 budget to increase to 15.4 trillion rupiah from 10 trillion rupiah," Anggito Abimanyu, head of the finance ministry's fiscal analysis unit, told Reuters.

Such a move means much-needed capital inflows might increase and boost the sagging rupiah currency since a large portion of assets under the programme are bought by foreigners. Assets being sold include government-owned banks and firms.

The higher revenue should also help ease pressure on the budget in the wake of higher oil prices.

Shouldnt be worried about JSX, because JSX is now up 5 points and still at the best ever points in the lifetime, remember last year JSX was up 70% making it the best perfomer after thailand, now JSX is still up 9%, so its still at their best pace.

About rupiah, its just because US want to increase their interest rate as many other asian currencies also fell...including the aussie dollar and thai baht, I think this level is still comfortable though, as Bank Indonesia predicted its just temporary. Indonesia macro stability 2003/2004 is still very stable, as you know our GDP is higher than expected in the 1st quarter, but we still need to create more legal reform and security to the investment otherwise our GDP will only stuck below 7%

cheers
What do you think of rising oil prices? That could be a threat too...fuel subsidies will skyrocket...although income will also increase. But I've heard that the government will lose overall from rising oil prices. It's because we still import fuel from Middle East...if only we produced them.....

Yeah, since march Indonesia imported oil because of the production is below 1Million barrel per day, Hopefully pertamina and BP are starting their oil exploration soon, there are many oil fields but because of lack of investment...they never get a chance to be explore...sigh


cheers

May 26 (Bloomberg) -- The Indonesian rupiah pared losses on speculation the central bank bought the currency to ward off inflation arising from higher oil prices.

An acceleration in inflation from a weaker rupiah may mean the central bank will have to raise interest rates, which it has been cutting to stimulate economic growth.

``Bank Indonesia probably doesn't want the rupiah to weaken,'' prompting it to buy the currency, said Ari Rahman, a currency trader at EXCO Nusantara Indonesia in Jakarta. ``The central bank wants the currency to be more stabilized for the economy.''


---

finally, rupiah is recovering....central bank will take action today ! good news.

cheers

Yeah, since march Indonesia imported oil because of the production is below 1Million barrel per day, Hopefully pertamina and BP are starting their oil exploration soon, there are many oil fields but because of lack of investment...they never get a chance to be explore...sigh


cheers
I'm not talking about crude oil, i'm talking about fuel...apparently we import 70% of Fuel from Saudi Arabia because we don't produce them...(we produce fuel from crude oil) :)

Bambang to seek growth that benefits 'the small people'
If elected, the front runner says he will make economic recovery the top priority in his first 100 days in office

By Shefali Rekhi

INDONESIA'S economy might be improving, but this has not translated into a 'feel good' factor among the people on the ground.


The result: a disconnect between the rosy macroeconomic indicators and what ordinary folks feel about the country's economic growth, said Mr Susilo Bambang Yudhoyono, the front runner in the race for the Indonesian presidency on July 5.

'There is something artificial about the prosperity we are seeing now,' the former general and Cabinet minister noted, pointing out that much of the nascent recovery is because of increased consumer spending.

There is also a 'disconnect', he said.

'The macro indicators are not mirrored in the microeconomic picture. People are complaining that the costs of basic education have risen sharply.

'So have the costs of telephone calls, electricity, construction materials. Clearly, the big numbers are not reflected down to the small people.'


Watch Channel i news clip here

Mr Bambang was delivering a talk on his vision for shaping his country's future as part of a series of lectures on Indonesia's presidential election, organised by the Institute of Defence and Strategic Studies and The Straits Times.

Asked by several members of the audience at the Shangri-La Hotel what he planned to do to promote business, draw investors and boost growth in the country, he said Indonesia needed to push for a growth rate of 7 per cent a year, up from its present growth rate of 4.5 per cent, to improve the welfare of its people.

The four key planks he outlined in his speech for economic recovery were: infrastructure, human resource development, easier availability of credit and legal reforms.

With a view to attracting foreign investors, he is also promising to make state-owned enterprises efficient, make the tender processes more transparent, cut red tape and significantly improve labour laws. Steps would also be taken to boost security and maintain stability in the country.

Mr Bambang has his task cut out for him. Elections have stymied the rate of recovery of an economy that was hit by the 1997 financial crisis.

Foreign investors have been shying away and export growth rates have been slackening, though regional economies have been doing far better.

To change that, Mr Bambang wants to pump more money into public works, which could include improving utilities and housing, improving rural-urban linkages as well as helping key areas in the rural zones to ensure better agricultural harvest.

'Infrastructure development is key,' he said.

'Economic growth simply cannot take off if everyone spends too much of their time stuck in traffic.'

From his speech, it was not quite clear how his government would fund these plans.

But Mr Bambang's plan to push for growth with a human face showed up in his commitment to reform education and health care services and to make sure the gains are shared by many instead of a few.

His government will improve the national curriculum, increase the ratio of teachers to students and spend more on libraries, he said.

Local governments will be encouraged to improve training facilities for workers and there will be more money spent on building clinics and subsidising some medical facilities.

There will also be a concerted effort to improve civic education to foster a spirit of unity in the country.

Small and medium enterprises - the avenues for more jobs - will get softer credit or cheaper loans.

'I say this because I am constantly haunted by the faces at campaign rallies,' Mr Bambang said.

'It is for them that I aim to make economic recovery my No. 1 priority in my first 100 days in office.'
http://www.straitstimes.com.sg/asia/story/0,4386,253007,00.html?

Bank Rakyat Indonesia Books US$150 MLN in Q1 Profits

JAKARTA, May 28 Asia Pulse - The state-run Bank Rakyat Indonesia (BRI) managed to book Rp1.38 trillion (around US$150 million) in profits before tax in the first quarter of 2004.
BRI President Rudjito said the bank's profits after tax during the said period amounted to Rp1.1 trillion, which is a 46.6 per cent increase compared to the profits after tax in the corresponding period of 2003.

The profits, he added, consisted of Rp3.79 trillion in interest earnings, and Rp1.21 trillion in interest costs, bringing the net interest income of the bank to Rp2.58 trillion.

According to Rudjito, the profit was earned as the result of BRI's commitment to stay focused on the development of micro-, small- and medium-sized businesses, so that the credit portfolio of BRI in this business sector reached 86.23 per cent.

"The achievement was also the result of the increasingly conducive business climate in the country," he said.

Compared to the first quarter of 2003, BRI in the first quarter of 2004 managed to raise its credit portfolio by Rp10.28 trillion (25.89 per cent) from Rp39.69 trillion to Rp49.96 trillion.

The increase has also boosted BRI's loan deposit ratio (LDR) from 57.18 per cent to 65.99 per cent.

BRI also managed to collect Rp75.71 trillion in third-party funds, a 9.1 per cent increase or Rp6.31 trillion compared to the Rp69.41 trillion in the first quarter of 2003.

The bank's CAR increased substantially from 14.83 per cent in the first quarter of 2003 to 23.99 per cent in the first quarter of 2004.

This was apparently the result of a Rp3.56 trillion increase in equity from Rp6.55 trillion by the end of March 2003 to Rp10.10 trillion by the end of March 2003.

Rudjito said the first quarter of 2004 financial account has already been reviewed by Public Accountants Prasetyo, Sarwoko & Sanjaya-Ernst & Young.

Rudjito also said his side planned to issue Rp1.3 trillion in dividends on profits gained in the second semester of 2003.

"This will be decided at a shareholders general meeting on May 31, 2004, and the amount to be distributed will be more than 50 pct of the profits gained in the second quarter of 2003," he said.

Friday May 28, 7:30 AM

Henry Walker Gets US$1.2 Bln Indonesian Coal Contract

ADELAIDE, Australia (Dow Jones)--Australian mining contractor Henry Walker Eltin Ltd. (HWE.AU) said Friday it was awarded a US$1.2 billion contract by Indonesia's PT Kaltim Prima Coal, a unit of PT Bumi Resources (BUMI.JK).

The company said it will provide mine infrastructure development and supply coal mining services over 10 years at the Bengalon project in eastern Kalimantan.

"Bengalon is the largest contract secured in the history of Henry Walker Eltin and will underpin profitable, long-term growth from HWE Mining," the company said in a statement.

"The project is budgeted to generate a return on assets employed exceeding 20% over the 10-year life of the contract," it said.

Singapore Press Hldgs To Sell Chinese Daily In Indonesia

SINGAPORE (Dow Jones)--

Singapore Press Holdings Ltd. (S37.SG) - the island state's biggest publisher - Thursday said it will print and sell the Lianhe Zaobao, its Chinese language daily, in Indonesia from June 1.

It will start with an initial daily circulation of 5,000 copies, which will be available in Jakarta and other parts of Indonesia, where Zaobao has a strong following of Indonesian Chinese readers, SPH said in a statement.

"Indonesia's economy is intimately linked with that of Singapore. With more than 10 million Indonesian Chinese living in close proximity from us, this is a timely opportunity for Zaobao to extend its reach to Indonesia, said Robin Hu, executive vice president of SPH's Chinese Newspapers Division, which also publishes the evening Chinese dailies Lianhe Wanbao and Shin Min Daily News.

The new venture is in line with its strategy to broaden Zaobao's presence in the region and boost its circulation, SPH said, adding that advertisers will also benefit from the wider reach.

Launched in March 1983, Zaobao is also circulated in Brunei, Hong Kong, Vietnam and major cities of China like Beijing and Shanghai.

Jakarta stock index ends higher on rph, blue chips

JAKARTA, May 27 (Reuters) - Jakarta stocks finished higher on Thursday, partly helped by relative stability in the rupiah currency and gains in some bluechips such as Telkom and Gudang Garam .
The Jakarta Composite Index rose 1.44 percent or 10.31 points to 728.31 in moderate trade with an estimated turnover of 570.5 billion rupiah ($61.57 million).

"Although the rupiah remains weak, stability is more important. That's the primary concern among investors recently," said Arwani Pranadjaya, technical analyst at Mandiri Sekuritas.

In late afternoon trade the rupiah currency was at 9,265/9,310 to the dollar, slightly weaker than Wednesday's level, but during the day it showed less volatility than on Tuesday, when it hit the lowest level in 19 months.

Indonesia's largest telecommunication firm, PT Telekomunikasi Indonesia Tbk, was the top contributor to the gain in the overall market, with its shares rising 2.08 percent to 7,350 rupiah.

Cigarette maker Gudang Garam posted a 4.06 percent gain to 14,100 rupiah, while shares of second largest telecommunication firm PT Indonesian Satellite Corp Tbk jumped 3.9 percent to 4,000 rupiah.

Some analysts had said the central bank's position of maintaining efforts to keep lowering domestic interest rates was a positive factor, as any rate increases would shift money away from the stock market.

Looking ahead, Pranadjaya said trading in the Jakarta bourse next month could be seeking direction from the campaign for president which starts June 1. The election is July 5. ($1=9,265 rupiah)

Surabaya Stock Exchange Reports Improvement of Performance

JAKARTA, May 28 Asia Pulse - The Surabaya Stock Exchange reported an operating profit of Rp169 million (US$19,900) in 2003 as against a loss of Rp7.13 billion in 2002.
The operating profit exceeded its target of Rp28 million in 2003, its management said yesterday.

The SSX, however, still reported a net loss of Rp144 million in 2003 though declining from Rp4.3 billion in the previous year.

The net loss in 2003 was caused by tax of Rp655 million deferred from 2002, it said.

The improvement in its financial performance in 2003 was attributable to growing bonds transaction.

SSX handles transactions of state bonds valued at Rp337.64 trillion in 2003, or a 157 per cent rise from 2002.

Indonesia Timah sees Q2 tin output up 10 pct on Q1

By Karima Anjani

JAKARTA, May 28 (Reuters) - Indonesia's PT Timah Tbk expects its tin output to be 10 percent higher in the second quarter compared with the first, but will continue to face problems securing raw materials, a company official said on Friday.

The world's largest integrated tin producer would improve output from only 6,246 tonnes in the first quarter -- a 47 percent year-on-year drop -- but would fall well short of the 14,243 tonnes produced in last year's second quarter, he said.

"Conditions are different from 2003. Getting raw material was easier then, compared with this year," the Timah official said.

State-run Timah is competing for resources on tin-rich Bangka island with up to eight small-scale smelters, which sprung up in response to Indonesia's ban on ore exports and to tempting multi-year highs in tin prices.

A global shortage of tin, used in the electronics, plating and chemical industries, has driven the price of the metal to 14-3/4-year highs around $9,400 a tonne for three-month delivery on the benchmark London Metal Exchange (LME) -- around double what it cost a year ago.

The Timah official predicted the company's tin output this year would be lower than 2003's reported 45,906 tonnes, but he declined to give a detailed full-year forecast.

Industry analyst CRU has said world tin consumption exceeded output by 15,000 tonnes last year and estimated the supply gap would widen to 20,000 tonnes this year.

The Timah official said the rise in second-quarter output would help the company catch up with delayed shipments of tin to Japan, South Korea, Taiwan, Hong Kong, Europe and the United States.

"There has been some improvement, but we have not yet fully recovered," he said. "If we had, that would mean we have plenty of stocks -- and we don't."

He added: "We've been negotiating with some of our customers as prices are high. Some of them preferred to postpone the contracts for a period of time. Both of us are benefiting, because then we don't need to deliver as much," he added.

Timah's tin sales were 8,253 tonnes in the first quarter of 2004 versus 10,717 tonnes in the same period last year. Tin has been traded at an average price of $6,651 a tonne this year, Timah said in its first-quarter results statement.

Mandiri posts 12.6% increase in profit

The Jakarta Post, Jakarta

The net profit of state-owned Bank Mandiri, the country's largest bank in terms of assets, surged by 12.6 percent during the first quarter of this year, despite a 27 percent decline in interest revenue.

The bank said in a statement on Friday that it had posted a net profit of Rp 1.74 trillion (US$193 million) in the first three months of the year, up from Rp 1.54 trillion in the same period last year, even though its income from interest dropped to Rp 5.17 trillion from Rp 7.08 trillion.

A summary of its financial report attributed the surge in profit to lower costs, thanks to a sharp decline in the central bank's benchmark interest rate, which fell to a six-year low.

Mandiri, which has 730 branches and 2,071 automated teller machines, said that expenses for interest, or costs of funds, were down by 50.9 percent to Rp 2.62 trillion from Rp 5.34 trillion.

The bank said its third-party funds declined by 8.2 percent to Rp 172 trillion, as part of its attempt to reduce its costs.

The bank also announced that during the first quarter, its total assets declined by 8 percent to Rp 239.38 trillion from Rp 259.56 trillion a year earlier.

The bank's capital adequacy ratio rose to 29.8 percent from 26.6 percent, far higher than the 8 percent minimum requirement set by the central bank. Mandiri's return on equity fell to 34 percent from 36.7 percent.

By the end of March, the bank's gross lending had risen by 11.6 percent to Rp 76.65 trillion from Rp 68.67 trillion a year earlier, but little change from the Rp 75.94 trillion at the end of last year.

Mandiri also reported that its gross non-performing loans rose to 8.4 percent from 6.6 percent, as it had to spare a provision to cover bad loans, some of them belonging to pulp and paper company PT Kiani Kertas. The bank bought the loan from the Indonesian Bank Restructuring Agency in 2001.

Bank Mandiri is included in the government's 2004 privatization program, which aims to raise around Rp 5 trillion in proceeds to help finance the state budget.

But a senior official at the Office of the State Minister of State Enterprises said on Thursday that the sale of another 10 percent stake in the publicly listed Bank Mandiri may have to be delayed into next year due to the current unfavorable condition in the financial market

Indonesian Shares End Higher; Gains In Asian Markets Help

JAKARTA (Dow Jones)--Indonesian shares ended higher Friday led by buying in cement and tobacco blue chips, boosted by gains across Asian markets after Wall Street's rally overnight, dealers said.

"It was, however, a mild buying," said a trader with a local securities firm, adding that lingering rupiah concerns spurred profit-taking, offsetting earlier gains.

The Jakarta Stock Exchange's main index ended up 5.677 points, or 0.8%, at 733.990, slightly down from an intraday high of 734.586.

Gainers led decliners 55 to 37, with 73 stocks unchanged.

Volume was 1.1 billion shares valued at 738 billion rupiah ($1=IDR9,290).

Cigarette maker Gudang Garam jumped IDR350, or 2.5%, to IDR14,450 on expectations of higher first half sales.

Cement maker Indocement Tunggal Prakarsa climbed IDR125, or 8.5%, to IDR1,600 on bargain-hunting.

Dealers said investors continued to buy banking blue chips on expectations that the central bank won't increase interest rates.

Heavyweight Bank Mandiri rose IDR25, or 2%, to IDR1,275 after the bank said its first quarter net profit rose 9.7% on year to IDR1.1 trillion.

Bank Rakyat Indonesia gained IDR25, or 1.5%, to IDR1,700 after the company said late Thursday its first quarter net profit rose 46% on year.

Shares of Indonesian Satellite Corp. fell IDR25, or 0.6%, to IDR3,975 on profit-taking. The stock rose 3.9% Thursday.

Profit-taking also hit shares of Bank Central Asia, which declined IDR25, or 0.6%, at IDR3,700.

Dealers said they expect the market Monday to trade flat to slightly higher on further bargain-hunting.

Indonesia to Sign Contract in June for LNG Supply to US West Coast

JAKARTA, May 28 Asia Pulse - Indonesia's Oil and Gas Executive Board (BP Migas) said it hopes to sign a contract in June with U.S. Sempra Energy for the supply of 3 million tons of liquefied natural gas (LNG) to the U.S. West Coast.
Both sides will send delegations to a meeting early June to follow up on previous agreement, an officials of BP Migas Djoko Harsono said after a meeting with legislators in a hearing yesterday.

Chief of BP Migas Rachmat Sudibjo said, the most reasonable price of LNG supplied to Sempra Energy is US$4 per MMBTU as LNG price in the West Coast fluctuated sharply.

(ANTARA)

Indonesian receives E&Y World Entrepreneur award

JAKARTA (JP): Indonesian entrepreneur Djoenaedi Joesoef, founder and president director of PT Konimex, a Surakarta-based private pharmaceutical company, has been awarded the Ernst & Young (E&Y) World Entrepreneur of the Year, Bisnis Indonesia reported on Monday.

Djoenaedi was chosen because of his extraordinary spirit, vision and commitment in building his business.

"Under his leadership, Konimex has become one of the biggest pharmaceutical firms and a pioneer in offering medicine in four-tablet packets at an affordable price," Ernst & Young said in a statement.

Djoenaedi received the prestigious award over the weekend along with 30 other finalists in Monte Carlo, Monaco.

Since 1967, he has been actively involved in various companies in pharmaceutical, cosmetics, education and banking sectors, and is an advisor to the Indonesian Business Institute as well as the Association of Indonesian Pharmaceutical Companies. He is also the President Commissioner of ABN Amro investment management and was a member of the overseeing committee of the former Indonesian Bank Restructuring Agency (IBRA).

Meanwhile, noted Filipino businessman Tony Tan Caktiong, director of Jollibee Foods Corporation, also received the E&Y World Entrepreneur of the Year 2004.

Together, the 31 businessmen employ more than 375,000 people at have a combined profit of US$28 billion.

John Arnold, E&Y Indonesia program director, said the award scheme gave an opportunity for businessmen to network among world-class entrepreneurs.

--------------------------------------------------------------------------------

Exports rise in April

Exports increased in April by 2.7 percent from the previous month as increasing demand for non-oil and gas commodities offset a decline in oil and gas exports, the Central Statistics Agency (BPS) reported on Tuesday.

In its monthly report, the BPS said that exports in April stood at US$5.21 billion, up from the $5.06 billion posted in March -- supported by a 3.9 percent rise in non-oil and gas exports.

The increase in non-oil and gas exports from $3.87 billion in March to $4.02 billion in April may have had something to do with robust global demand in line with the improving world economy, said BPS chief Soedarti Surbakti.

"That offset a 1.4 percent decline in oil and gas exports from $1.20 billion to $1.18 billion," she added.

The BPS also reported a rise in imports to $3.16 billion in April from $3.13 billion the month before, with non-oil and gas imports increasing by 5.2 percent to $2.29 billion from $2.18 billion.

Oil and gas imports fell by close to 9 percent to $863.8 million from $949.2 million the previous month. -- JP

Indonesia April trade surplus $2.05 billion

JAKARTA, June 1 (Reuters) - Indonesia recorded a trade surplus of $2.05 billion in April, against $2.44 billion in the same period last year, the statistics bureau said on Tuesday.
A Reuters survey of 11 research houses produced a median forecast for the April trade balance of $2.07 billion.

Following are Indonesia's official trade figures:

April 04 April 03 Mar 04
(in billions of dollars)
Exports 5.21 5.06 5.07
Imports 3.16 2.62 3.13
Surplus 2.05 2.44 1.94

Weak rupiah, political tension send stocks tumbling down

Jakarta shares plunged on Friday amid lingering worries of the sharp depreciation in the value of the rupiah against the U.S. dollar and rising political tension ahead of next month's presidential election.

The Jakarta Stock Exchange Composite Index fell by 2.9 percent, or 21.105 points at 697.937, which was slightly higher than its intra-day low of 689.536.

Falls led gainers 87 to 14, with 57 stocks unchanged. Volume was at 1.3 billion shares valued at Rp 1.3 trillion (US$137.57 million).

Traders said that foreign investors sold shares heavily after the rupiah tumbled to around Rp 9,540 per dollar at one point during the day. Suspected central bank intervention managed to lift the local unit, and closed at Rp 9,465, little changed from Wednesday's close of Rp 9,470. The local financial market was closed on Thursday for a public holiday.

The rupiah has been the worst performing currency in the Asia region, falling by around 11 percent so far this year. A sharp drop in the value of the rupiah would hurt companies as it would be more expensive to import raw materials and costly to repay maturing foreign debts.

Concerns over the domestic political situation, high global crude oil prices and losses in many Asian markets after Wall Street's fall overnight added to the negative sentiment.

"There was heavy selling," said a trader with Paramitra Securities as quoted by Dow Jones.

"Some investors may be thinking it's time to play it safe and switch out of Indonesian assets," Paula Komarudin, who helps manage the equivalent of $1.1 billion in assets at PT Manulife Asset Management, was quoted by Bloomberg..

Bluechip telecommunications firm PT Telkom and bank shares led the Friday fall in the local stock market, the fourth consecutive drop this week.

Telkom, the country's largest telecom firm and the largest counter in the exchange, dropped by 5.5 percent, or Rp 400 to Rp 6,850 per share. Telkom had a $424.3 million debt in US dollars, more than a third of its total debt.

Meanwhile, Bank Mandiri, the largest bank in the country, plunged 6.3 percent, or Rp 75 to Rp 1,125.

Dealers attributed the selling of banking shares to the central bank's plan to increase the reserves requirement for commercial banks to defend the rupiah.

In addition to economic factors both at home and overseas, the rupiah has been badly affected by rising political tension at home as the month-long campaign for the country's first direct presidential elections began on Tuesday, resulting in worries about possible clashes among political supporters.

Nervous companies continued to buy dollars on fears the local unit would continue to decline amid the political uncertainty.

"Local companies continued amassing dollars as they expect the rupiah to remain under pressure ahead of the July presidential election," a dealer said. "Bank Indonesia seems to be the main dollar supplier today."

Indonesian Minister Predicts US$1,000 Per Capita GDP by Yr-End

JAKARTA, June 4 Asia Pulse - Chief economics minister Dorodjatun Kuntjoro Jakti predicted that the country's per capita Gross Domestic Product (GDP) will exceed US$1,000 toward the end of this year, nearing the level in the period preceeding the Asian economic crisis of 1998.
Dorodjatun said economic growth reduced the number of poor people to 15.1 per cent of the population in 2003, down from 15.7 per cent in the pre-crisis years and 27.1 per cent in 1999 when the crisis was at its worst.

He told delegates to mid term review meeting of donor consortium Consultative Group on Indonesia (CGI), although sluggish compared with 20 years ago, economic growth was more equitable, resulting in a reduction in the number of people living below the poverty line.

He said this year the government set aside Rp18.7 trillion (US$2.07 billion) to cope with poverty in the country.

(ANTARA)

Indonesian Rupiah Has Biggest Gain in Two Years on Plan to Boost Reserves


Indonesian Rupiah Rises Most in Two Years on Reserve Regulation

June 7 (Bloomberg) -- Indonesia's rupiah had its biggest gain in two years as central bank Governor Burhanuddin Abdullah said he may force lenders to set aside up to 10 percent of deposits as reserves, cutting the level of cash they can use to buy dollars.

``Every player and especially the banks have to prepare more rupiah for the new regulations, strengthening the rupiah against the dollar,'' said Adi Santoso Budi, chief dealer in the Treasury department at state-owned PT Bank Tabungan Negara in Jakarta. It ``will be effective in the short term'' in boosting the currency.

The rupiah rose 1.7 percent to 9,333 versus the dollar as of 1:05 p.m. Jakarta time, its biggest advance since June 10, 2002.

The plan to boost reserves comes after Abdullah on Wednesday said the central bank wants to raise the rupiah to 9,000. It fell that day to a more than two-year low of 9,595 on concerns violence between supporters of rival presidential candidates would mar elections next month. Abdullah said today that the decision to soak up banks' surplus cash will help arrest a rupiah slump.

The central bank bought the rupiah Wednesday, Halim Alamsyah, director of economics research and monetary policy, said that day.

Some investors may sell the currency ahead of elections in which President Megawati Soekarnoputri is being challenged by former generals Wiranto and Susilo Bambang Yudhoyono. Thousands of Megawati's supporters battled police, throwing rocks and torching cars, when she failed to win the presidency in October 1999.

A voting official and another man were killed in the easternmost province of Papua as they delivered equipment for elections in April this year, Agence France-Presse reported.

`Pre-Election Uncertainties'

``The pre-election uncertainties are probably causing some domestic money to go out,'' said V. Anantha-Nageswaran, Singapore- based regional head of investment consulting at Credit Suisse Private Banking, owned by Credit Suisse Group.

The rupiah's 9.8 percent decline this year may make it ``quite long-term attractive,'' Anantha-Nageswaran said.

Governor Abdullah said the central bank will absorb 40 trillion rupiah ($4.9 billion) of excess funds should it raise lenders' reserve requirements to 10 percent of deposits, preventing a collapse in the value of the currency.

Lenders now place 5 percent of rupiah deposits with the central bank as reserves. Bank Indonesia said last week that it would raise the requirement within two weeks.

``I don't think there will be a currency crisis in Indonesia,'' said Philip Wee, analyst in Singapore at DBS Group Holdings Ltd., Southeast Asia's biggest bank by assets.


http://quote.bloomberg.com/apps/news?pid=10001097&sid=aYz71em5qOxg&refer=world_currencies

Malaysian mobile phone operator Maxis eyes regional expansion

Malaysia's leading cell phone operator Maxis Communications said Monday it aims to expand to regional markets _ possibly India and Indonesia _ within two years.

"Our balance sheet is strong, we are on the lookout," Maxis Chairman Megat Zaharuddin Megat Mohamad Nor told reporters following the company's annual shareholders meeting.

Megat Zaharuddin said Maxis was actively studying opportunities to expand its operations to other countries in Asia. He cited India and Indonesia as among the potential targets.

The next two years could be "the best time to get into regional market cheap," he said.

Megat Zaharuddin said Maxis would prefer to retain management control in its planned overseas expansion, but declined to provide further details.

Maxis is Malaysia's biggest mobile phone carrier in sales, subscriber base and market share. The company has 4.9 million subscribers _ more than 40 percent of Malaysia's current mobile phone market.

Analysts say the mobile phone market in this country of 25 million people will reach a penetration rate of 60 percent in 2006, compared to the current rate of 45 percent. This could spur many local telecommunications companies to expand overseas to sustain growth.

Jakarta shares finish higher on rupiah, oil price

JAKARTA, June 7 (Reuters) - Jakarta stocks finished higher on Monday on a technical rebound and positive sentiment from a slightly stronger rupiah currency. Gains in some key regional bourses and a lower oil price also helped.
The Jakarta Composite Index gained 0.41 percent to 700.785 points in relatively heavy trade with estimated turnover of 867.22 billion rupiah ($92.95 million). Gainers outnumbered losers 42 to 31 while 76 shares were unchanged.

"A stronger rupiah is one of the factors today, while a relatively lower oil prices also helped the market," said Christine Salim, the head of research at Samuel Sekuritas Indonesia.

A stronger oil price would have a negative impact for Indonesia, which -- while it is Asia's only member of OPEC -- has been a net oil importer in recent months.

Some strengthening in the rupiah against the dollar helped exchange rate sensitive shares such as carmaker PT Astra International Tbk , which gained 2.75 percent to 5,600 rupiah.

Many banking shares also ended in positive territory, rebounding from their heavy losses last week after the central bank announced it would increase banks' minimum reserve requirements.

Looking ahead, some analysts expected the market would likely remain lethargic as investors stay sidelined during the election period to avoid any unnecessary risks.

Indonesians will go to the polls to cast their vote in the first-ever direct presidential election on July 5 and might have to return for a runoff in September if no candidate obtains a majority.

Senin, 07/06/2004 16:48 WIB
Indef: Platform ekonomi capres dinilai terlalu ambisius dan tidak realistis

JAKARTA (Antara): Indef menilai program dan platform ekonomi pasangan Capres dan Cawapres saat ini terlalu ambisius dan tidak realistis.

Tim Indef yang terdiri dari M. Fadhil Hasan, Bustanul Arifin, Iman Sugema, dan Aviliani mengungkapkan hal itu di Kampus Universitas Paramadina Jakarta, Senin.

Indef mencontohkan dalam target pertumbuhan ekonomi, pasangan Wiranto-Solahuddin Wahid menetapkan pertumbuhan ekonomi 7%-9% selama 2005 hingga 2009. Pasangan Megawati-Hasyim Muzadi sebesar 6,8% per tahun. Pasangan Amien Rais-Siswono sebesar 6,3%.

Pasangan SBY-JK menetapkan pertumbuhan ekonomi sebesar 7,6% pada masa pemerintahan. Sementara pasangan Hamzah Haz-Agum Gumelar tidak mencantumkan target pertumbuhan ekonomi secara kuantitatif.

Menurut M. Fadhil Hasan, target pertumbuhan ekonomi yang ditetapkan para capres-cawapres itu akan sulit dicapai jika hanya menggunakan langkah-langkah konvensional seperti yang dilakukan saat ini.

"Pertumbuhan ekonomi kita saat ini baru 4,8%, pertumbuhan investasi belum signifikan, ekspor tidak ada tanda-tanda mengalami peningkatan besar, konsumsi tidak bisa diandalkan karena kita juga harus bayar utang," kata Fadhil.

Dari sisi penciptaan lapangan kerja, pasangan Megawati-Hasyim menetapkan penciptaan lapangan kerja untuk 12,9 juta orang atau sekitar 2,5 juta per tahun. Pasangan Wiranto-Solahuddin Wahid menetapkan penciptaan lapangan kerja untuk 3,2 juta orang per tahun.

Pasangan SBY-JK menetapkan tingkat pengangguran mengalami penurunan dari 9% menjadi 5%. Pasangan Amien Rais-Siswono menetapkan penciptaan lapangan kerja untuk 3,5 juta orang per tahun. Sementara pasangan Hamzah Haz-Agum Gumelar belum menetapkan angka pasti.

Menurut Fadhil, angka-angka tersebut tidak realistis jika dihubungkan dengan kondisi saat ini di mana angka pengangguran justru mengalami peningkatan.

"Dalam tiga tahun terakhir angka pengangguran justru mengalami peningkatan, sulit untuk tiba-tiba dapat menyerap tambahan itu," katanya.

Dia menyebutkan, untuk menyerap sebanyak 280.000 tenaga kerja diperlukan peningkatan pertumbuhan ekonomi sebesar satu persen.

"Karena itu untuk dapat merealisasikan angka-angka yang ditetapkan pasangan capres dan cawapres itu diperlukan tingkat pertumbuhan ekonomi yang sangat fantastis," kata Fadhil.

The JSX index finally rebounds, reach over 700 points

http://ichart.yahoo.com/w?s=^JKSE

The Jakarta Stock Exchange (JSX) on Monday gave until the end of this month for telecommunications firm PT Telkom and cement giant PT Semen Gresik to submit their audited 2003 financial reports, or risk being suspended.

The JSX also extended the deadline to June 11 to trading company PT Wicaksana Overseas and textile company PT Apac Citra Centertex to submit their 2003 financial reports.

"The bourse is giving another chance to these companies to submit their reports," the exchange said in a statement, but did not provide clear reasons why it had granted the dispensations to the companies.

But the exchange suspended the trading of shares in six companies as they had failed to submit their audited accounts by the June 6 final deadline.

The six firms are engineering company PT Texmaco Perkasa Engineering, construction company PT Bukaka Teknik Utama, property company PT Bhuwanatala Indah Permai, packaging firms PT Wahana Jaya Perkasa and PT Siwani Makmur, and chemical firm PT Eterindo Wahanatama.

Telkom has been unable to submit its audited financial report on time as it has faced difficulties in finalizing the previous year's financial report. It took more than a year for the company to finish its 2002 account, which had been earlier rejected by the U.S. Securities and Exchange Commission due to deficiencies. The 2002 report was completed in February of this year. Telkom, which is the largest counter on the JSX, is also listed on the New York Stock Exchange.

A Telkom spokesman earlier told this paper that the company was aiming to finalize the 2003 financial statements in the fourth week of June.

Meanwhile, Semen Gresik, Indonesia's largest cement maker, had also been facing difficulties in finalizing its 2002 financial report, which in turn affected the completion of the 2003 report, due to problems with its rebellious West Sumatra-based subsidiary PT Semen Padang.

Listed companies are supposed to submit their 2003 audited financial reports to the JSX by March 31. But some 35 firms failed to meet the initial deadline, forcing the exchange to extend the deadline a couple of times. The JSX previously warned the companies that they could risk being suspended or even delisted from the exchange if they could not meet the final June 6 deadline.

A JSX official previously admitted that the exchange was in a difficult position as regards the imposition of tougher sanctions against Telkom and Semen Gresik due to their large size.

Meanwhile, bellweather Telkom shares fell Rp 50, or 0.7 percent, to Rp 6,800 after its American Depositary Receipts fell US$0.1 to $14.60 in New York on Friday.

Shares in Semen Gresik declined by Rp 100 to Rp 9,000 amid overall weak market sentiment.

Zakki P. Hakim, Jakarta - 2004-06-10 18:19:45

China's automotive company Great Wall Motors (GWM) plans to set up a car manufacturing plant in East Java in a joint venture with Indonesia's state-owned heavy equipment maker PT Bharata, according to a senior official at the Ministry of Industry and Trade.

Director General of Metal, Machinery, Electronics and Miscellaneous Industry Subagyo told reporters on Wednesday that the venture would initially focus on manufacturing cheaper multipurpose vehicles (MPVs) with a price tag of below Rp 100 million (US$10,793) per unit.

Subagyo said the value of the investment involved "trillions of rupiah" (hundreds of millions of U.S. dollars), and that GWM expected to start the project at the end of this year.

"After entering the market with MPVs, they might launch pick-ups," he said.

He said that a memorandum of understanding between the two companies was expected to be signed in August during a visit to China by Minister of Industry and Trade Rini MS Soewandi.

Subagyo said GWM might use Indonesia as its base for expansion to other Southeast Asian countries.

GWM is a holding company specializing in the manufacture of pick-up trucks in China, with an annual production of 100,000 units, and claiming to hold a more than 50 percent domestic market share. GWM exports 3,000 units annually to the Middle East, West Asia, North Africa and South America according to its website.

Reports said that GWM also aims to penetrate the U.S. market in around October by offering compact Sport Utility Vehicles (SUVs) and pick-ups with appealing prices of between $9,000 to $15,000 per unit.

Industry analyst Suhari Sargo said that there was still ample room for new players to enter the domestic car market considering the relatively low ratio of car ownership in the country.

"So I believe the automotive business will keep growing," Suhari said, adding that MPVs currently dominate about 70 percent of the local car market share. A couple of Japanese carmakers here have already started selling cheaper MPVs with a price tag of less than Rp 100 million per unit.

Suhari said the car ownership ratio in Indonesia was about one car for 35 people. In Malaysia, the ratio is 1:8, while in Thailand it is 1:15.

According to data from the Association of Indonesian Automotive Manufacturers (Gaikindo), new car sales reached 354,482 units last year, a 12 percent increase from the previous year's 217,763. Gaikindo targeted sales to reach 385,000 this year.

Suhari also said that the Chinese carmaker could make a strong debut in the local market despite the fact that Chinese motorcycle makers had earlier failed to compete with their Japanese rivals here.

He pointed out that the Chinese automobile industry was far more advanced than the motorcycle industry.

He added that the failure of Chinese motorcycles to penetrate the local market as also due to the fact that the bikes were imported by general importers who lack the commitment to after-sales service.

"Now, Chinese cars have competitive features compared to established global brands," he said, while also acknowledging that the cars would still need some time and a strategy to gain the trust of the Indonesian people.

Nissan Motors To Boost Indonesian Production Tenfold

JAKARTA (Dow Jones)--Nissan Motor Co. (7201.TO or NSANY) plans to increase its production of cars in Indonesia tenfold over the next five years, the Japanese company said in a news release Tuesday.

Nissan said it hopes to produce 30,000 units a year by 2009, up from a current annual output of 3,000. Nissan produces cars in Indonesia through its unit, PT Nissan Motors Indonesia.

The company has partnered with Intentia International, a consultant, to help streamline its operations in Indonesia, the release said.

Indonesia's car market is growing amid strong consumer spending. In May, total vehicle sales increased 41% on the previous year to 39,955 units. In 2004, experts expect Indonesians to buy around 400,000 vehicles, up from 353,000 last year.


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Indonesia to Sign LNG Deal With China on June 25

JAKARTA, June 15 Asia Pulse - Indonesia will sign an agreement in late June to sell five million tons of liquefied natural gas (LNG) to China's Zheijiang and Shandong provinces.
"The Memorandum of Understadning (MoU) is expected to be signed on June 25 in Surabaya," Energy and Mineral Resources Minister Purnomo Yusgiantoro said here Monday.

But Purnomo did not say from which gas field the LNG would come.

Meanwhile, a source at the state oil and gas policy agency (BP Migas) said the LNG to be supplied to China may come from the Tangguh field in Papua and the Bontang field in East Kalimantan.

China's state oil and gas company Petrochemical Corp (Sinopec Group) would compete with two other companies, China National Offshore Oil Corp (CNOOC) and China National Petroleum Corp (CNPC), to win the tender to build an LNG terminal in Shandong province.

The terminal would have to be finalised in 2006 to hold three million tons of LNG a year, and the capacity could be increased to up to five million tons to meet market demand.

In addition to Indonesia, other LNG suppliers to China that would be using the LNG terminal in Shandong would be Yemen, Russia and Iran.

Sinopec has signed an agreement with National Iranian Gas Export Company (NIGEC) and National Iranian Oil Company (NIOC) to import some five million tons of LNG annually.

CNOOC which dominated the local market in China was also planning to build an LNG terminal in Zhejiang province.

The company was expected to spend US$2 million on the construction of a loading terminal, power generators and a pipeline in the province. The project is scheduled to begin in 2008.

(ANTARA)

Indonesia's Astra auto sales jump 46 pct in May


JAKARTA, June 11 (Reuters) - Indonesia's biggest auto distributor, PT Astra International Tbk , said on Friday its total vehicle sales in May, including exports, jumped to 22,347 units from 15,302 in the same month last year.
Astra, 39.4 percent owned by Singapore's Jardine Cycle & Carriage Ltd , said in a statement its domestic vehicle sales last month jumped to 19,713 units from 11,971 in May 2003.

Domestic auto sales in May by members of the Association of Indonesian Automotive Industries (Gaikindo) jumped 41 percent from a year earlier to 39,955 units, the company said.

Astra raised its 2004 auto sales outlook last month following robust domestic performance so far this year boosted by election spending, inexpensive models and favorable financing.

Its 2004 growth target for domestic auto sales was raised to 15 percent rather than 10 percent from 147,074 units last year.

The company's President Budi Setiadharma said if the elections run smoothly, auto sales in the world's fourth most populous country could reach 420,000 units this year, the highest since the Asian financial crisis in the late 1990s.

More ppl buy cars. More loan money comes from japanese goverment.
*sigh* I dont like this scheme.

Indonesia May Local Vehicle Sales +41% On Yr, +0.3% On Mo

JAKARTA (Dow Jones)--Sales of new vehicles in Indonesia jumped 41% on year in May to 39,955 from 28,272 in the same month a year ago, the Indonesian car assemblers' association Gaikindo said Monday.

It added that new vehicle sales in the country rose 0.3% in May from 39,841 in April.

Falling interest rates in Indonesia have helped motor vehicle sales in the country.

The benchmark one-month weighted average rate of Sertifikat Bank Indonesia notes has fallen to its current 7.33% from nearly 12% in early January 2003.

Gaikindo said market leader PT Astra International (ASII.JK) sold 22,347 vehicles, including exports, in May. Its sales rose 46% from 15,302 in the same month a year ago, and nearly 1% from 22,127 in April.

Singapore's Jardine Cycle & Carriage Ltd. (C07.SG) owns a 35% stake in Astra.

Indonesia To Discuss LNG Cooperation With Other Producers

JAKARTA (Dow Jones)--Indonesia will discuss with other major liquefied natural gas producers the possibility of helping each other with supply if any of them are unable to meet obligations to buyers, Indonesia's Mines and Energy Minister Purnomo Yusgiantoro said Monday.

The meeting will be held in December to coincide with an energy investment conference in Jakarta, and officials from Qatar, Malaysia, Oman and Brunei will attend, he said.

"We never know when a force majeure will happen," he told reporters. "If a force majeure happens, which causes one of these countries to be unable to meet supply to buyers, other countries will help."

Indonesia is a major natural gas exporter. But its reputation as a reliable supplier came into question in 2001 when Exxon Mobil Corp. (XOM), the second largest natural gas producer in Indonesia, had to shut production in Aceh province for five months because of rising security risks from a rebellion movement.

Gas output from Exxon Mobil's field is also declining as reserves there have been exploited since the early 1970s.

Also, the development of new natural gas fields remains slow due to unclear energy regulations.

In the first quarter of this year, Indonesia had to buy a cargo containing 125,000 cubic meters of LNG from Oman.

It may need to buy around four additional cargoes later this year, officials from the upstream oil and gas watchdog BP Migas said last week.

Three companies set coupons for rupiah bonds

JAKARTA (Dow Jones): Three Indonesian issuers Tuesday announced the coupons on their rupiah-denominated bonds, which have maturities ranging from one year to six years.

Plantation company PT Tunas Baru Lampung has set a 14.75% fixed coupon on its Rp350 billion ($1=IDR9,415) five-year bond. The coupon will be paid quarterly until the bond expires June 24, 2009.

Cement maker PT Semen Baturaja said its Rp200 billion bond will carry a fixed 13.875% coupon, which will also be paid quarterly until the debt matures June 22, 2010.

Meanwhile, financing company PT Tunas Financindo Sarana has assigned a 10% fixed coupon - also to be paid quarterly - on its Rp350 billion bond, which will expire July 22, 2005.

All three companies completed their bookbuilding exercises recently.

Another two Indonesian companies that are issuing bonds, oil and gas company PT Medco Energi Internasional and the world's largest instant noodle maker PT Indofood Sukses Makmur, haven't decided on their coupons. (*)

The rapid expansion of modern retail outlets like hypermarkets and minimarkets in big cities may have forced many traditional grocery stores to close down, creating huge job losses, according to a preliminary finding of the Central Statistics Agency (BPS).

The latest 2003 National Labor Force Survey (Sakernas), published by BPS, reported that jobs in the retail sector during the year declined by 7.42 percent to 4.24 million from 4.58 million in 2002.

"Our preliminary hypothesis is that the growing number of hypermarkets and minimarkets probably contribute significantly to the declining trend," Aden Gultom of the BPS workforce sub-directorate told The Jakarta Post on Tuesday.

Aden, who had been involved in the survey, said that the BPS was now in the process of reevaluating the finding. The agency does not clearly define what it considers a traditional grocery store.

But Bambang Widianto, a director at the National Development Planning Agency (Bappenas), said that the decline in jobs in the retail sector was probably related to the overall poor business and investment climate in the country, prompting many businesses to close down and discouraging new investment.

During the past few years, modern retail outlets have been mushrooming in the country particularly in the capital city of Jakarta and its surrounding areas, taking advantage of the strong domestic consumption, which has been the main engine of economic growth.

The number of convenience stores, for example, increased to 100 in 2002 from only 45 in 2000, while the number of supermarkets including minimarkets rose to 802 from 737, according to AC Nielsen data.

Hypermarkets, which are relatively new in Indonesia have experienced the highest growth, rising to 37 in number in 2002 from 27 in 2000. But the data also suggests that the number of traditional grocery stores also increased to 1.89 million from 1.88 million in the same period.

The condition in 2003 may have changed particularly as modern retailers took more aggressive expansion steps. From 1998 until the first five months of this year, five large format stores (including hypermarkets and those that require membership) have opened around 54 outlets.

French company Carrefour has been seen as the most aggressive (and probably the most successful) in expanding its hypermarket business in the country.

Carrefour started the hypermarket business here in 1998, opening its first outlet in Kuningan, South Jakarta, selling no less than 50,000 goods varying from screwdrivers, clothes, televisions, meat and fruit to fresh-from-the-oven pastries.

Other modern retailers operating in the country include Matahari, Makro, Alfa, Hero, Clubstore, Tops, Super Indo, and Indomart. Indomart has successfully penetrated residential areas.

Industry experts have said that the mushrooming of modern retail outlets is part of the changing lifestyles in big cities as occurred in other countries.

But some critics have lambasted the government (which benefits from taxes and foreign and domestic investment figures) for failing to protect traditional stores. They say that many in fact had violated government regulations.

The Jakarta administration has issued Bylaw No. 2/2002 on private markets in Jakarta, which regulates pricing policies, minimum distance from traditional markets and cooperation with informal businesses.

The bylaw stipulates that minimarkets must not price their goods at rates far lower than those in grocery stores in the area and must be located outside a radius of 0.5 kilometers from traditional markets.

Meanwhile, hypermarkets must stock nine basic needs supplied by small enterprises through a partnership program, and must be located outside a radius of 2.5 km from traditional markets and must provide space for informal businesses, including street and sidewalk vendors, in up to 20 percent of its area.

Indonesia's Tax Revenue Reaches US$9.1 BLN as at June 7

JAKARTA, June 16 Asia Pulse - Indonesia's state income from taxes as per June 7, 2004 stood at Rp85.7 trillion (US$9.1 billion) or some 37 percent of the target amount of Rp233 trillion set in the 2004 State Budget, the country's top tax official said.
Hadi Purnomo, director general of taxes at the Finance Ministry, said here Tuesday the June 7 figure represnted a 105-percent increase compared to a correspoding period in 2003.

Speaking at a hearing with the House of Representatives (DPR)'s budget committee, he also gave a breakdown of the amount of taxes collected until June 2004.

He said of the total amount of Rp85.7 trillion, Rp44.6 trillion came from income tax in the non-oil/non-gas sector, Rp8.2 trillion from income tax in the oil and gas sector, Rp29 trillion from value added tax, Rp3.2 trillion from land and building tax, Rp0.7 trillion from other taxes.

"As there is still much time ahead, I think we will certainly reach the income taget for the whole year of 2004," he added.

Hadi said in the period between January and June this year his office had paid Rp10.5 trillion in tax restitutions.

"The amount of tax restitutions is quite high," he said.

(ANTARA)

Hero Supermarket to build four hypermarkets in 2004

JAKARTA (Dow Jones): PT Hero Supermarket, an Indonesian retailer, Wednesday said it plans to build four new hypermarkets this year to boost sales.

"We also plan to build another 16 pharmaceutical shops and small-size convenience stores," Hero President Ipung Kurnia told reporters.

He said the company will spend around Rp200 billion ($1=IDR9,390) on its business expansion plans.

He didn't provide any other details.

In 2003, the company's sales rose 24% to Rp3 trillion. However, falling margins at supermarkets reduced the retailer's operating income to Rp43 billion from Rp48 billion.

The company closed some loss-making shops last year and opened new ones. The new shops include several hypermarkets, pharmacies, and convenience stores.

--------------------------------------------------------------------------------

Indonesia consumer confidence rises-c.bank survey

JAKARTA, June 16 (Reuters) - Consumer confidence in Indonesia's economy improved in May, helped by relatively peaceful political conditions in a long election year, but people stayed pessimistic on inflation, a central bank survey showed.
The survey of 2,900 households in nine major cities, received by Reuters on Wednesday, showed households more optimistic on their income prospects, on the possibility the rupiah would strengthen, and on the supply of goods and services improving in the next six to 12 months.

Bank Indonesia said the consumer confidence index rose to 91.5 in May from 90.7 a month earlier.

But the survey also showed Indonesians expected consumer prices to increase, which could lead to higher interest rates. The survey also found chronic unemployment problems continued to be a pressing issue.

Inflation in Southeast Asia's biggest economy rose a higher-than-expected 6.47 percent in the year through May.

"The relatively good social and political conditions during the elections period appeared to have increased consumer confidence on the current economic conditions and the prospects in the next 6-12 months," the survey said.

Indonesia held parliamentary elections in April and a presidential vote is scheduled on July 5. A run-off vote in September will be necessary if none of the five candidates gets a majority.


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Kompas 17/6



SIAPA pun presiden terpilih kelak, apa pun upayanya, pengangguran lima tahun ke depan dipastikan masih akan menghantui negeri ini. Angin surga yang diumbar para calon presiden dan calon wakil presiden jika terpilih untuk membuka lapangan seluas-luasnya, hanya isapan jempol. Apalagi, tim ekonomi para capres pun hanya mengandalkan sektor informal seperti usaha mikro kecil menengah dan program padat karya sebagai tumpuan untuk memberikan lapangan kerja bagi penganggur terbuka yang sudah mencapai 11 juta orang dari 40 juta penganggur di negeri ini.

BERDASARKAN estimasi pengamat ekonomi Lin Che Wei, pada tahun 2004, jika ekonomi hanya bertumbuh 4,50 persen, maka tambahan lapangan kerja baru hanya 1,40 juta lapangan kerja. Sementara, jumlah angkatan kerja baru diperkirakan bertambah 2,13 juta orang dan saat itu sudah ada pengangguran terbuka sebanyak 10,83 juta orang.

Pada tahun 2005, jika pertumbuhan ekonomi mencapai lima persen, maka akan tercipta 1,80 juta lapangan pekerjaan baru. Perkiraan angkatan kerja baru yang lahir 2,16 juta orang dan jumlah pengangguran terbuka 11,19 juta orang.

"Tahun 2006, jika pertumbuhan ekonomi mencapai 5,5 persen akan tercipta 1,70 juta lapangan pekerjaan baru. Saat itu jumlah angkatan kerja baru yang lahir 2,18 juta orang dan jumlah pengangguran terbuka 11,63 juta orang," kata Che Wei.

Tahun 2007 pertumbuhan ekonomi diperkirakan mencapai 5,9 persen. Dengan pertumbuhan sebesar itu, tercipta 1,90 juta lapangan pekerjaan baru. Pada saat itu lahir 2,21 juta angkatan kerja baru dan jumlah pengangguran terbuka mencapai 11,90 juta orang.

Tahun 2008 pertumbuhan ekonomi diperkirakan mencapai 6,4 persen dan akan menciptakan 2,20 juta lapangan pekerjaan baru. Saat itu ada 2,23 juta angkatan kerja baru dan 11,98 juta pengangguran terbuka. "Jadi, tahun 2008 pertumbuhan ekonomi telah berhasil menyerap angkatan kerja baru yang lahir, namun tetap saja belum mampu menanggulangi pengangguran terbuka yang ada," ujar Che Wei.

Menurut Che Wei, tahun 2009 ketika ekonomi diestimasikan dapat tumbuh sampai tujuh persen dan menciptakan 2,40 juta lapangan kerja baru, pengangguran masih tetap belum dapat diatasi. "Pada tahun 2009 jumlah angkatan kerja baru yang lahir mencapai 115,95 juta orang dengan pengangguran terbuka 11,79 juta orang," katanya.

Melihat masih beratnya persoalan pengangguran di Indonesia sampai lima tahun ke depan tersebut, yang harus diperhatikan pemerintah adalah tenaga kerja mayoritas di sektor informal. "Sektor informal adalah sektor yang tidak berbadan hukum, tetapi ada 60 juta orang yang bekerja di sektor ini. Jadi perlu dicari cara bagaimana agar sektor informal bisa bergeser menjadi sektor formal," katanya.

Menurut Che Wei, ada kontradiksi antara penanganan masalah pengangguran melalui keberpihakan pada sektor informal dengan komitmen para calon presiden untuk menegakkan hukum. "Penegakan hukum berarti sektor informal harus dikejar-kejar dan ditertibkan. Padahal, di sana justru banyak lapangan pekerjaan yang tercipta. Hukum memang seperti pedang bermata dua, maka harus digunakan dengan baik dan jangan digunakan untuk membasmi sektor informal melainkan hukum untuk melindungi usaha mereka," katanya.

"Seharusnya dalam mendorong sektor informal menjadi sektor formal, pemerintah harus benar-benar memberikan insentif, termasuk pajak. Sebab, dengan berubahnya mereka menjadi sektor formal, berarti pemerintah dapat pemasukan dari pajak. Sedangkan bagi sektor formal sendiri, keuntungannya adalah mereka lebih leluasa dalam mengembangkan usaha, apalagi jika ingin mengekspor," ujarnya.

Sektor informal, kata Che Wei, bukan melulu usaha kecil dan menengah (UKM). "Dengan banyaknya perhatian pemerintah kepada UKM, maka tumbuh banyak UKM jadi-jadian. Bukan pelaku usaha, tetapi mengaku UKM hanya demi mendapat kucuran kredit," katanya.

Dikatakan, sektor informal adalah sektor yang padat karya, namun nilai tambahnya (value added) kecil. Sebaliknya, sektor formal tidak padat karya, namun nilai tambahnay sangat besar. "Jika kita mendorong sektor informal menjadi formal, maka nilai tambah yang akan diperoleh masyarakat jadi sangat besar," katanya.

Hal yang terpenting, menurut Che Wei, para calon pemimpin mendatang harus bisa mendapatkan fokus yang tepat apa yang akan mereka kerjakan. "Platform ekonomi yang dirancang oleh orang-orang yang paling mengerti permasalahan dan dikemas dalam bahasa sederhana, kunci keberhasilan tim ekonomi capres," katanya

UNTUK mendapatkan suara dari rakyat, para capres tampaknya masih mengandalkan sektor UKM untuk menyerap tenaga kerja di Indonesia.

Benang merah platform yang disampaikan tim ekonomi dari empat calon presiden, yakni Dradjad Wibowo (Amien Rais-Siswono Yudo Husodo), Sofyan Djalil (Susilo Bambang Yudhoyono-Jusuf Kalla), Sri Adiningsih (Megawati Soekarnoputri-Hasyim Muzadi), dan Harry Azhar Azis ( Wiranto-Salahuddin Wahid) menunjukkan hal itu.

Dradjad Wibowo mengatakan, masalah pengangguran merupakan prioritas utama pemerintahan Amien Rais-Siswono. Stabilitas ekonomi makro belakangan ini membaik dan keberhasilan reformasi politik telah mengurangi risiko bisnis di sektor riil. Pertumbuhan ekonomi pun merayap naik mendekati angka lima persen.

"Namun demikian, risiko pertahanan keamanan dan ketertiban, ketidakpastian hukum, perburuan rente oleh birokrasi, risiko sosial, dan rentannya sektor keuangan masih lumayan tinggi. Sehingga sektor riil belum cukup menarik bagi investasi dan gagal menciptakan pekerjaan yang memadai," ungkap Dradjad.

Disebutkan, pada tahun 2003 tingkat pengangguran terbuka sudah mencapai 10,13 juta jiwa (9,85 persen), padahal pada tahun 1996 masih 4,29 juta jiwa (4,86 persen). Ini belum termasuk pengangguran terselubung yang diperkirakan mencapai 40 juta jiwa. Tanpa terobosan kebijakan ekonomi, tingkat pengangguran terbuka tahun 2005 diperkirakan akan naik menjadi 11,19 juta (10,45 persen), dan pada tahun 2009 akan menjadi 13,53-15,74 juta jiwa (11,6-13,5 persen).

Dikatakan, dengan tetap menangani permasalahan ekonomi yang lain, seperti besarnya beban utang negara, kebijakan ekonomi akan lebih difokuskan pada penciptaan pekerjaan.

"Seluruh ramuan kebijakan, mulai dari stabilisasi ekonomi makro, konsolidasi fiskal, pembenahan tata niaga, strategi industri, sampai pada kebijakan sektoral, disusun dengan tujuan akhir menciptakan sebanyak mungkin pekerjaan. Target realistis yang hendak dicapai adalah menurunkan pengangguran terbuka sampai di bawah ambang psikologis 10 juta jiwa, yaitu menjadi 9,3 juta jiwa atau delapan persen pada tahun 2009," kata Dradjad.

Pada tingkat teknokratis, kebijakan ekonomi akan diarahkan pada peningkatan rasio penciptaan pekerjaan, yaitu perbandingan antara jumlah pekerjaan baru dengan pertumbuhan ekonomi. Peningkatan pertumbuhan ekonomi akan dilakukan secara integral untuk memperbaiki keadilan ekonomi.

Guna menekan pengangguran hingga 8 persen, target pertumbuhan ekonomi rata-rata periode 2005-2009 adalah 6,3 persen per tahun, dan target rasio penciptaan pekerjaan neto harus naik dari 0,25 persen menjadi 0,35 persen.

Pemerintahan Amien-Siswono akan menjadikan APBN sebagai stimulus bagi penciptaan pekerjaan. Jika konsolidasi fiskal berhasil menciptakan APBN yang kembali memiliki kemampuan stimulasi yang memadai, maka stimulasi pertumbuhan dan pemerataan ekonomi dilakukan terutama melalui perbaikan kesejahteraan pegawai negara dan proyek padat karya.

Upaya lain, akan dikembangkan suatu skema insentif magang, yaitu insentif fiskal bagi perusahaan-perusahaan yang menampung lulusan baru, memberikan pelatihan luar sekolah, atau meningkatkan pengetahuan dan kemampuan para pekerja atau pencari kerja. Untuk mendukung pembiayaan, pemerintah dapat menerbitkan Surat Utang Negara yang dikaitkan dengan program atau proyek tertentu.

Sementara itu, Sofyan Djalil, anggota tim ekonomi Susilo Bambang Yudhoyono-Jusuf Kalla, mengatakan, perbaikan dan penciptaan kesempatan kerja juga merupakan agenda dan program ekonomi utama, di samping program ekonomi lain. Disebutkan, ada 18 kebijakan nyata yang akan dilakukan untuk menciptakan kesempatan yang luas. Tim ekonomi SBY-Jusuf Kalla juga akan memformulasikan APBN yang memberikan prioritas penciptaan lapangan kerja melalui pertumbuhan ekonomi yang berkelanjutan.

Hal yang terlebih dahulu dilakukan pemerintahan SBY- Jusuf Kalla, menurut Sofyan, yaitu membangun kepercayaan dengan menciptakan landasan yang kuat untuk memajukan perekonomian, serta menumbuhkan kepercayaan terhadap kemampuan bangsa sendiri. Kedua, menciptakan kepastian hukum, peraturan, dan rasa aman untuk berusaha dan bekerja. Kemudian merevitalisasi hubungan industrial tripartit yang mendorong terciptanya lapangan pekerjaan yang luas dan menyejahterakan.

"Tak kalah penting adalah tetap menjaga pertumbuhan ekonomi yang memadai, di samping terus meningkatkan akses rakyat terhadap pendidikan dan layanan kesehatan. Revitalisasi pertanian dan kelautan serta aktivitas ekonomi pedesaan dan wilayah pesisir juga akan dilaksanakan," ujarnya.

Langkah lain, beberapa kebijakan diupayakan untuk mendorong pelaksanaan reformasi di sektor agraria, meningkatkan kuantitas dan kualitas infrastruktur. Menerapkan kebijakan fiskal yang ditargetkan dengan lebih tepat dan bertanggung jawab seperti menata utang luar negeri untuk pembiayaan APBN.

"Pengembangan industri yang memiliki daya saing adalah poin penting untuk menyediakan kesempatan kerja. Demikian juga mendorong perkembangan usaha mikro dan menengah. Peningkatan mekanisme pasar yang efisien dan peran Indonesia dalam kerja sama ekonomi antarnegara juga patut dilaksanakan," katanya.

Ditambahkan, kebijakan-kebijakan tersebut akan mampu menciptakan peluang dan kesempatan kerja yang luas. Akses pencari kerja tidak hanya ditentukan oleh kesempatan yang ada, tapi juga ditentukan oleh kualitas dan daya saing pencari kerja. Karena itu, kebijakan yang dibuat dapat meningkatkan pendayagunaan kapasitas produktif yang selama ini masih menganggur dan pembukaan usaha atau investasi baru.

Sri Adiningsih mengungkapkan, untuk menyerap angkatan kerja baru serta pengangguran terbuka, pemerintahan Megawati lebih menekankan pada pemberdayaan UKM. "Berdasarkan data Badan Pusat Statistik (BPS), pada tahun 2000 jumlah tenaga kerja yang terserap UKM sebanyak 70,40 juta orang. Pada tahun 2003 tenaga kerja yang terserap UKM 79,00 juta orang. Artinya, dalam tiga tahun UKM sudah menciptakan sembilan juta lapangan pekerjaan," katanya.

Pemberdayaan UKM akan dilakukan dengan lebih banyak menyalurkan kredit ke UKM. "Kita juga akan menggenjot pertumbuhan investasi terutama untuk membangun infrastruktur. Kita tahu bahwa pembangunan infrastruktur sangat banyak menyerap tenaga kerja," ujarnya.

Menurut Harry Azhar Azis dari tim ekonomi capres Wiranto-Wahid, timnya telah mempersiapkan dua pendekatan untuk mengatasi pengangguran. Yakni, program padat karya karena biaya pekerja di sektor ini relatif kecil tetapi daya serap pekerja relatif tinggi. Program padat karya bisa dilakukan dengan mengucurkan dana perbankan ke sektor pembangunan infrastruktur.

Jadi makin jelas, pengangguran akan terus menghantui negeri ini karena para capres cuma bertumpu pada sektor informal.(ETA/ELY/OTW/TAV)

Chile Approaches Indonesia On LNG Deal - Official


ANTOFAGASTA, Chile (Dow Jones)--Chile has approached Indonesia regarding a purchase of liquified natural gas from the Southeast Asian country, Indonesia's Director General of Energy and Mines told reporters Wednesday.

While so far "there are only intentions" and no formal talks, Chilean officials have sounded out the possibility of a major deal, Simon Sembiring said.

As "we still have space for production, it depends on how much the Chilean government wants per year," he also said.

During a recent state visit to Indonesia, Chilean President Ricardo Lagos said Indonesia had offered to help fill the gap left by the shortfall in natural gas piped in from Argentina.

Chile's eastern neighbor in late March began rationing gas exports to Chile, leading government authorities and industry to scramble for more costly alternative fuels to generate roughly a third of Chile's electricity.

Lagos has since begun to work on lessening Chile's dependance on Argentine gas.

The plans include construction of a $400-500 million LNG terminal by 2008. Indonesia in December sealed a major deal to export LNG to the Pacific coasts of the U.S. and Mexico, ending Bolivia's hopes of a similar deal.

Separately, Indonesia's mining sector stands to benefit from the Chinese government's efforts at cooling its searing economic growth, Sembiring said.

With coal and tin output in China set to decline and Chinese consumption for both of those products strong, Indonesia's coal and tin stand to gain in export markets, he added.

Sembiring spoke on the sidelines of a the Asia-Pacific Economic Cooperation group's meeting on mining that Wednesday began discussions on barriers to trade and sustainable development issues in the northern Chilean port of Antofagasta.

It is the first such meeting among APEC mining ministers. Delegates from Australia, Brunei, Canada, Chile, China, Indonesia, Japan, South Korea, Malaysia, Mexico, Papua New Guinea, Peru, the Philippines, Russia, Taiwan, Thailand, the U.S., and Vietnam are present at the meetings.

Mandiri and BNI Interested in Monorail
oleh : dan
Wed Jun 6, 2004

JAKARTA (Bisnis): Bank Mandiri and Bank Negara Indonesia said that the two banks were interested in financing the project of Jakarta Monorail with the total investment of US$630 million. The project had been started this week.

The President Director of Bank BNI Sigit Pramono admitted that he had met the President Director of PT Adhi Karya, the contractor of the project, to talk about the prospect of the financing. But he said that the discussion was still at the very preliminary step so that there had not been any commitment on this.

"We should see the prospect first, because it is the first project in Indonesia. We need some in depth study before deciding on whether we need to participate in financing the project," he told Bisnis Indonesia in Jakarta yesterday.

Pramono said that if the study would conclude that the project was prospective, BNI would like to give some loans.

"Because the fund needed by the project is huge so that it needs a syndication to meet the need," he said.

The Corporate Director of Bank Mandiri, Sholeh Tasripan, also said the same thing. He said that the project of Jakarta Monorel was huge so that it also needed huge funding.

"But of course we need to carry on a study on this. This is a new transportation means for Indonesia. It is different with the toll road, in which we already know the prospect," he said.

The President Director of Bank Mandiri, ECW Neloe, said that he did not know that there had been an application of such project financing.

The data got by Bisnis Indonesia showed that the project of Jakarta Monorail would need some fund of US$630 million or around US$23.3 million per kilometer.

Among the fund needed by the project, the own capital of the developer was US$150 million, and the rest would came from the banking loans.

Some foreign banks such as Banca Intessa (Hong Kong), Asian Development Bank, DBS (Singapore), and AON Risk Services Center were ready to give some loans for the project. (htr/ya)

ASIA OIL:Indonesia Still Benefits From High Crude Prices

By Tom Wright
Of DOW JONES NEWSWIRES

JAKARTA (Dow Jones)--Indonesia may recently have become a net importer of crude oil, but Asia's only OPEC member remains one of the few economies in the region to benefit from soaring global energy costs.

That's because the country's hefty shipments of natural gas - it's the world's biggest exporter - more than compensate for its slip into the crude-importer category in recent months.

While high crude prices could destabilize many Asian economies, Indonesia is one of only a few - including Malaysia and Brunei - that don't rely heavily on imported energy.

"Indonesia recently became a net importer of crude oil. However, Indonesia remains a significant net exporter of natural gas, and thus still benefits from the surge in global energy prices," Merrill Lynch said in a report.

Oil prices, around $30 a barrel at the end of 2003, have been climbing steadily this year, with Nymex crude oil futures this month hitting $42.45, the highest in the 21 years since the contract was launched. August Nymex crude oil futures were trading at $38.81 a barrel late Monday in Asia.

Domestic supply bottlenecks caused by problems attracting investment here meant that in March for the first time Indonesia imported more crude oil than it exported - a striking embarrassment for a member of the Organization of Petroleum Exporting Countries.

But with high revenues from gas sales to energy-hungry Asian nations such as Singapore, Japan and South Korea, Indonesia's oil and gas exports totaled $1.18 billion in April, according to the most recent figures available, outweighing the month's total imports of $863.8 million.

It's A Gas

As gas prices rise in tandem with crude oil's climb, Indonesia should reap hefty profits as a net energy exporter, the World Bank said in a recent report.

Indonesia's oil-and-gas industry had net exports last year of $2.24 billion, the World Bank estimates. That amount should jump in 2004, the bank estimates, with every $1 increase in oil prices adding $78 million to net exports.

"This further implies that higher oil prices have a positive impact on the economy as a whole," the report added. The bank forecasts Indonesia's economy will grow 4.5% this year, just below the government's 4.8% target.

To be sure, the status of crude oil importer presents problems for the country, not least that it could undermine Indonesia's role in OPEC.

Crude production has been declining due to Indonesia's failure to set clear investment laws for the sector, industry executives say. Many foreign oil companies have put off exploring for oil here until things become clearer.

The country already can't meet its daily OPEC output quota of 1.2 million barrels a day, producing just under 1 million b/d. That makes Indonesia one of the few OPEC members that don't overproduce. As a result, exports fell to 448,000 b/d in March, while imports grew to 484,000 b/d. Indonesia remained a net importer in April.

Output should get a boost later this year when a number of new oil developments come on line, the government says. Energy ministry officials expect Indonesia will be a net crude exporter for the whole of 2004. Nonetheless, Indonesia's dwindling output has diminished its influence within OPEC, spurring some critics, such as former oil minister Ginandjar Kartasasmita, to call for the country to leave the grouping.

Currency traders have also cited crude output problems as adding to negative sentiment toward the rupiah. The currency is near 26-month lows, largely due to growing political uncertainty ahead of July's first-round presidential election, and an exodus of global funds from emerging markets.

Subsidies A Drag

Still, fears that high oil prices could hurt Indonesia's economy and markets are unfounded, given the windfall profits the country will make from high gas prices, the World Bank said. Indonesia holds about one-fifth of global market share for gas and ranks sixth in production.

"The authorities already have enough things to worry about," said World Bank economist Bert Hofman in Jakarta. "But losing from an oil price increase is not one of them."

Concerns over the effect of high oil prices on the government's finances are also overblown, the bank said.

The budget will suffer because of higher subsidies on fuel oil, the government acknowledges. The government estimates it may have to raise its 2004 budget subsidies to 46 trillion rupiah ($1=IDR9,405) assuming an average oil price of $32 a barrel, from the currently forecast IDR14.5 trillion at $22 a barrel.

Indonesia still subsidizes fuel costs after attempts to raise prices met widespread street protests last year. Indonesia is a net importer of oil products from countries such as China because of its limited domestic refining capacity.

But higher government revenues from gas sales would more than compensate in the budget for increased subsidy costs, according to the World Bank. A $1 increase in oil prices would help reduce a forecast IDR24.41 trillion budget deficit this year by IDR100 billion, it said.

The government would have gained a lot more if it had moved faster to reduce fuel subsidies, Hofman said.

The economy and budget could face problems from the rupiah's fall if this feeds through into higher inflation and interest rates, the bank said. But this has little to do with oil prices, it added.

Huh?
Indonesia is a Net energy exporter?
I tot Indonesia have to import processed oil from other country coz we dont have the facility?

Its the largest LNG exporter, Indonesia built the pipeline from Kalimantan to Singapore and all around Indonesia, senhen maybe what you mean is oil? Indonesia have oil refinery in Singapore and North Indonesia.

cheers

Watchdog details IMF mistakes in Indonesia crisis

WASHINGTON, June 22 (Reuters) - The International Monetary Fund did not offer the best advice when it stepped in to help resolve Indonesia's economic crisis in the late 1990s, according to an independent report published on Tuesday.
The Independent Evaluation Office -- the IMF's monitoring body -- said other than technical errors, the fund failed to understand the nature of the problems and made mistakes in the way policy advice was developed and delivered.

"The initial question posed by this paper was: "Did the IMF offer the best advice?" The argument ... is that it did not," said the report's author Stephen Grenville, Australia's former deputy reserve bank governor and a consultant to the IEO in 2002-03.

The IMF put together a $43 billion rescue package in November 1997 as Indonesia's currency crashed and exposed a fragile economy and flimsy financial system.

The extent of the Indonesian crash took economists and analysts by surprise after three decades of 7 percent annual growth, no serious economic imbalances and healthy foreign reserves.

The IEO report said the content of the loan program was based on the view that the situation was not serious and could be easily restored.

It forecast gross domestic product in 1997 would grow 5 percent, with more positive growth in 1998, even as GDP declined by 13 percent and a capital account crisis unfolded.

The report said initial technical errors occurred before the IMF arrived in Indonesia when the government sharply reduced currency in circulation and bank reserves, which left the financial system starved of liquidity.

The IMF, however, failed to pick up on the mistake when it moved in to help Indonesia.

"It is surprising that the IMF, when it arrived on the scene, did not identify the error with base money, which would have led it to the liquidity support problem and would have highlighted the problems in the financial sector: after all, base money and the financial sector health are the IMF's area of core competence," the report said.

But more seriously was the fund's misreading of capital flows, the report said.

It said large capital outflows were inevitable and the debilitating fall in the exchange rate, the drop in GDP and the collapse of the finance sector followed directly from this.

Grenville argues that a "realistic" approach for Indonesia in October 1997 would have been to try the combination of higher interest rates and foreign exchange intervention and to have a fall-back plan if it did not work.

"Whether there was a mix of policies that could have avoided serious damage to the economy is debatable -- and unknowable," said Grenville. "But if there was to be chance of containing the situation, policy had to be responsive and open-minded," he added.

The report said the IMF is not designed to be "nimble footed." In crisis, IMF staff make short visits on tight predetermined timetables and have to be responsive "to detailed and often ill-informed policy interventions from around the board table in Washington", said Grenville.

The report said the IMF had learned from its experience in Indonesia, but the lessons came too late to halt the rapid deterioration of the country's economy at the time.

The reason why i dont trust IMF....


cheers

The reason why i dont trust IMF....


cheers

I totally agree with David

IMF = I'M Finished or I'M F****d or I'M Fired

TOKYO, Japan (Dow Jones): Mitsubishi Heavy Industries Ltd. and Sumitomo Corp. said Thursday they have received a roughly Y6 billion order from the Indonesian government to build a railcar depot just south of Jakarta.

The project is financed by a loan from the Japan Bank of International Cooperation, the two companies said.

The order calls for the two Japanese companies to design and build a maintenance depot and carriage yard for rolling stock serving residents of the great Jakarta area.

Construction on the project is slated to start next month. The target for completion is July 2007. (*)

this is for train or monorail?

this project is reffering to KRL train... for some trains they (KAI) used to park the car inside Bogor Station, until the "Kereta Hantu" accident happened, PT KAI doesn't have sufficient space to park their trains inside Train Depot. That's why, a new depot will be built to fulfill the demands. :)

Correct me if i'm wrong :bash:

oh
thats good news
yeah
i saw many trains being parked at bogor train station
with indonesia weather condition
train can not be parked without roof for too long, i guess.

yeap this is for Jabotabek train. as a matter of fact the project would've started 2-3 years back.

Not sure if this news fits here, but well.. ehem.. so every pirateable item will have cukai (goverment tax seal) on it so can be easily distinquisable from real and not real. hahahaha. most pirated item can be spotted easily by just looking at them. it is the POLICE FORCE that can not distinguish them. many of them is too low educated and old fashioned.

they better spend some money for educating the police force. uh, wait, spend money instead of gaining income.. ups.. sorry2.. less income for them.

i heard from my friends during that new copyright law raid. the police force can rarely distinguish between original and pirated software. even original software seller getting caught. only those able to pay ransom can walk free.

so just how long before the 'cukai' seal getting pirated too? hehehehe. cukai works on cigarette because quality is everything.


Semua Barang Rekaman akan Dikenai Cukai
Kamis, 24 Juni 2004 | 19:07 WIB

TEMPO Interaktif, Jakarta:Pemerintah mengusulkan mengenakan cukai pada seluruh barang rekaman seperti kaset, compact disc, video compact disc, digital video disc, dan laser disc. “Ini untuk mencegah pembajakan,” kata Direktur Jenderal Bea dan Cukai, Eddy Abdurrachman, dalam rapat kerja komisi anggaran DPR di gedung parlemen, Kamis (24/6).

Menurut sebuah survei, seperti dikutip Eddy, saat ini 90 persen barang rekaman adalah bajakan. Ini, katanya, merugikan kepada industri rekaman. Karena itu, Indonesia masuk dalam daftar surga pembajakan oleh Amerika Serikat.

Jika usulan ini disetujui DPR, maka pemerintah menambah jumlah barang kena cukai. Selama ini, barang yang sudah dikenai cukai adalah rokok, alkohol, dan minuman beralkohol. Eddy mengutip UU No 11/1995 tentang cukai yang menyatakan penambahan barang kena cukai diatur melalui peraturan pemerintah setelah disetujui DPR.

Dengan dikenakan cukai terhadap barang rekaman, kata Eddy, maka pemerintah akan mempermudah mengadakan pengawasan terhadap barang-barang tersebut. Pasalnya, barang yang sudah dikenai cukai akan dilengkapi pita cukai yang akan memudahkan identifikasi dilapangan. “Sehingga barang yang tidak ada pita cukainya dikategorikan ilegal,” katanya.

Meski tujuannya mencegah pembajakan, penggunaan cukai kepada barang rekaman akan meningkatkan penerimaan negara. Survei yang dilakukan Departemen Keuangan menunjukan jumlah penerimaan negara yang cukup signifikan.

Jika diasumsikan, setiap produk rekaman itu dikenai cukai Rp 750 dan pada tahun pertama menyumbang 30 persen penerimaan negara, dari barang ini mencapai Rp 98,41 miliar. Jika 40 persen barang rekaman itu sudah dikenai cukai, pendapatan akan meningkat menjadi Rp 122,35 miliar. Jika 50 atau 60 persen, penerimaan negara meningkat menjadi masing-masing Rp 146,29 miliar dan Rp 170,2 miliar.

Selain penerimaan negara dari cukai, pajak pertambahan nilai juga akan terdongkrak oleh pengenaan cukai terhadap barang ini. Saat ini, kata Eddy, baru 10 persen dari barang yang ada yang sudah dikenakan PPN. “Sehingga penerimaan dari pajak ini juga akan meningkat pula,” kata Eddy.

Anggota panitia anggaran belum menanggapi atas usulan pemeriintah ini menurut ketua panitia anggaran Abdullah Zaini, pembahasan soal ini akan dilakukan pada 12-13 Juli 2004 oleh rapat panitia kerja.

Jakarta stocks end up on window dressing, rupiah

JAKARTA, June 25 (Reuters) - Indonesian shares finished higher on Friday as some brokerages dressed up their portfolios towards the end of the second quarter and a relatively stable rupiah also encouraged investors, analysts said.
The Jakarta Composite Index jumped 1.53 percent to 720.23 points in moderate trade with turnover estimated at 563.77 billion rupiah ($59.87 million).

"Some fund managers were dressing up their portfolios at the end of the second quarter. This has been going on for the past few days," Fitri Murniawati, an analyst at BNI Sekuritas, told Reuters.

Blue chip shares such as PT Telekomunikasi Indonesia Tbk and PT Unilever Indonesia Tbk -- the two largest firms on the bourse in terms of market capitalisation, were the key contributors this session.

Telkom gained 3.5 percent to 7,400 rupiah while Unilever jumped 4.05 percent to 3,850 rupiah.

The world's largest noodle marker, PT Indofood Sukses Makmur Tbk , announced a modest dividend on Friday as well as naming its new president director. Its shares closed unchanged at 675 rupiah.

Some analysts said the U.S. Federal Reserve's likely decision next week to raise interest rates, as well as uncertainty surrounding Indonesia's July 5 presidential election, could weigh on the market.

The rupiah currency was 9,414/9,420 in late trade relatively stable from its morning level.

what was rupiah value when JSX is around 800 point?
8700 or 8400? cant really recall.

it was 8500 rupiah, after the election and the cabinet is perfomed, we will see 900 points. :D

cheers

900 points? you wrong mate.
it'll be 1000 points. hehehehe.
woah maybe i should buy some shares now, considering the bargain price hehehe.
*call up my broker*

Whats your stocks on JSX? i got telkom and indofood (650 rupiah/very cheap!)

cheers

hahaha
dont have right now
i was thinking to invest on stock a year a go, thats why i am following the stock market
but then i am too busy to do buy hehehe
yeah telcos and indofood is a good buy.

For JSX stocks, i advice on Gudang Garam, Indofood and Indosat. Telkom face delisting this end of the month!

cheers

Anthony Salim Takes Over as Indofood CEO
June 25, 2004 06:35 PM,
Laksamana.Net - Shareholders of the world’s biggest instant noodle producer PT Indofood Sukses Makmur on Friday (25/6/04) appointed Anthony Salim as the company’s new chief executive officer, replacing Eva Riyanti Hutapea.

Salim has been acting CEO since Hutapea resigned in December, apparently due to differences with the Salim family, the controlling shareholder of the company that boasts annual sales worth about $2 billion.

Indofood’s shareholders also increased the company’s board of directors to 10 from 8 members, as part of an effort to reverse its declining share of the domestic market for instant noodles, Dow Jones reported.

The entry of new producers offering low priced instant noodles over recent years has reduced Indofood’s market share to about 80% at present from 95% in 2000.

Hutapea, who had been Indofood's chief executive since 1996, was credited for helping the company to survive the Asian financial crisis of the late 1990s when the Salim Group went bankrupt.

She also won kudos for turning around Indofood’s image after the Salim Group was attacked as a corrupt crony conglomerate of ex-dictator Suharto.

Local media reports have said Hutapea resigned because of a conflict with the Salim family, which controls Indofood through Hong Kong-based First Pacific Company.

The dispute reportedly centered on Indofood’s huge flour milling subsidiary Bogasari, which Anthony Salim was under pressure sell to raise cash for the acquisition of more local food brands.

Hutapea was said to be upset by the high price that Indofood has to pay for flour from Bogasari, compared to cheaper imported flour. But plans to sell Bogasari stalled because it was founded by Salim’s father Liem Sioe Liong, who attaches considerable emotional value to the mill.

In addition to noodles, Indofood’s main products are flour, edible oils and fats, food seasonings, baby foods and snack foods.

The company has installed capacity to produce 13 billion packs of noodles and 3.6 million tons of flour annually. It also owns the largest distribution network in Indonesia, which helps maintain its dominance of instant noodle sales.

Hutapea was earlier this week appointed one of the new commissioners of PT Indonesian Satellite Corporation.


http://www.laksamana.net/vnews.cfm?ncat=41&news_id=7190

Wiranto fokus pada kesempatan kerja dan investasi

Mulai hari ini, Bisnis Indonesia menurunkan artikel tentang visi-misi atau platform ekonomi lima pasangan capres-cawapres yang berlaga di pilpres 5 Juli secara berurutan berdasarkan nomor urut dari KPU, yang ditulis oleh tim ekonomi para pasangan itu.
Permasalahan besarnya pengangguran, buruknya perkembangan investasi, dan rendahnya pertumbuhan ekonomi merupakan permasalahan ekonomi yang menjadi perhatian utama capres-cawapres Wiranto-Salahuddin Wahid.

Strategi ekonomi Wiranto, yang telah disatukan dengan platform ekonomi Partai Golkar, mengajukan pendekatan jalur ganda (dual tracks) dalam mendorong investasi dan menciptakan kesempatan kerja.

Pendekatan pertama adalah memfasilitasi dan mendorong perkembangan usaha kecil dan menengah (UKM) dan pembangunan infrastruktur pedesaan yang bersifat padat karya. Jalur kedua, adalah memfasilitasi dan mendorong perkembangan investasi mulai dari pemanfaatan sumber daya alam (SDA), terutama migas dan pertambangan, selanjutnya sektor industri manufaktur yang membutuhkan restrukturisasi yang mendalam, dan pembangunan infrastruktur berskala besar.

Dalam waktu 2-3 tahun ke depan diharapkan dua jalur ini akan mengalami kovergensi dan bersinergi untuk menghasilkan perekonomian yang berdaya saing tinggi dan kesempatan kerja yang luas serta upah yang semakin baik.

Perbankan nasional sebenarnya sudah cukup aktif dalam memfasilitasi aliran kredit bagi perkembangan UKM, namun jangkauannya terbatas, karena pada umumnya UKM tidak cukup bankable. Adalah tugas pemerintah, termasuk pemda, bekerjasama dengan perbankan dan LSM, untuk mengembangkan berbagai program dalam memperbaiki akses UKM kepada kredit perbankan.

Lebih jauh peranan lembaga keuangan yang mempunyai kekhususan dalam keuangan mikro (microfinance) perlu diperbesar, seperti BRI dan PNM (Permodalan Nasional Madani), dan ditambah keberadaannya, sehingga jangkauannya semakin luas untuk mengembangkan kegiatan ekonomi berskala mikro. Peran pemerintah adalah memfasilitasi, memperkuat hak kepemilikan dan menghapuskan berbagai kendala yang menghambat perkembangan keuangan mikro ini.

Pengembangan infrastruktur pedesaan berkala kecil, seperti irigasi, sumber air bersih, dan jalan desa, serta kegiatan off farm akan dapat menciptakan kesempatan kerja yang besar bagi masyarakat pedesaan. Mekanisme DAK (Dana Alokasi Khusus) dapat dikembangkan untuk mendorong pembangunan infrastruktur pedesaan.

Selanjutnya, akses yang lebih baik pada input produksi tanaman pangan, seperti pupuk dan bibit unggul, serta kredit sangat penting untuk meningkatkan produksi tanaman pangan. Tambahan lagi pemberdayaan petani dan nelayan untuk lebih sehat, terdidik dan produktif akan memperbaiki taraf kehidupan mereka.

Dalam jalur kedua, prioritas pada investasi di kegiatan migas dan pertambangan sangat potensial tidak saja dalam memberikan devisa dan penerimaan pemerintah, tetapi juga dalam memicu perkembangan investasi yang lebih luas di sektor lainnya. Sayang sekali pada saat harga minyak dan komoditas pertambangan cukup tinggi, kinerja sektor ini mengecewakan.

Tak kompetitif

Permasalahannya adalah struktur perpajakan yang tidak kompetitif, peraturan yang tumpang tindih, dan kelambanan birokrasi dalam memecahkan permasalahan yang bahkan bersifat rutin, seperti pengembalian biaya (recovery cost) dalam kegiatan eksploitasi minyak dan gas.

Perbaikan rezim perpajakan, antara lain dengan memberikan insentif bagi investor, dan perbaikan dalam bekerjanya birokrasi, terutama di BP Migas dan di tingkat pemda, akan dengan cepat mendorong investasi dan produksi migas dan pertambangan. Langkah serupa dapat dilakukan untuk investasi perkebunan dan agribisnis pada umumnya.

Restrukturisasi industri manufaktur memerlukan upaya lebih besar karena BPPN menjual asetnya tanpa terlebih dahulu direstrukturisasi. Tambahan lagi pola persaingan internasional yang berubah, antara lain dengan perkembangan Cina dan dihapuskannya kuota tekstil, membutuhkan program restrukturisasi yang luas dan mendalam.

Karena itu fokus dalam kebijaksanaan restrukturisasi industri perlu dilakukan dengan prioritas pada industri yang berbasis pada SDA, berorientasi ekspor, menyerap tenaga kerja banyak, serta industri pendukung (supporting industries) yang penting peranannya dalam menarik investasi. Industri tersebut direstrukturisasi tidak hanya dalam aspek keuangan, untuk mengurangi beban utang dan memperbaiki cash flow, tetapi juga dalam kemampuan teknologi dan peningkatan produktivitas.

Untuk itu, kerjasama antara pemerintah, dunia industri dan perbankan sangat diperlukan guna menciptakan sinergi dan nilai tambah tinggi (value creation). Langkah lainnya adalah penciptaan hubungan industrial yang lebih kondusif dengan memperbaiki peraturan perburuhan yang prokesempatan kerja dan probisnis.

Dalam jalur kedua ini termasuk juga pengembangan infrastruktur berskala besar, seperti pembangkit listrik, telekomunikasi, jalan tol dan pelabuhan. Sedapat mungkin investor swasta difasilitasi dan didorong untuk berpartisipasi aktif. Untuk itu peraturan harus dibuat sejelas mungkin dan pengembaliannya (return) cukup menarik bagi investor.

Begitu pula praktik penggelembungan biaya (mark-up) harus diminimalkan. Sumber pendanaan jangka panjang, seperti lewat dana pensiun, perlu untuk dikembangkan untuk dapat memfasilitasi penerbitan obligasi bagi pembangunan infrastruktur.

Dengan strategi, kebijaksanaan dan program tersebut maka diharapkan perekonomian akan dapat tumbuh 5%-6% dalam tahun pertama dan kedua, 6%-7% dalam tahun ketiga, serta 7%-8% pada tahun keeempat dan kelima. Demikian pula tingkat pengangguran akan dapat ditekan di bawah 5%.

Dukungan kuat dari DPR, melalui koalisi Partai Golkar dan PKB, akan memperkuat dan mempercepat proses perubahan perundangan, seperti insentif pajak dan reformasi perpajakan pada umumnya. Keberhasilan kebijaksanaan pemerintah dalam masa demokrasi ini sangat bergantung pada dukungan DPR.

Begitu pula banyaknya pimpinan daerah dan DPRD berasal dari Partai Golkar akan sangat membantu dalam mensinkronisasikan kebijaksanaan pusat dan daerah. Kombinasi antara pengalaman, profesionalitas, dan kekuatan dukungan politik memberikan kemungkinan yang tinggi untuk berhasil.

Oleh Umar Juoro
Tim Ekonomi Wiranto-Salahuddin Wahid

PT Pal Indonesia Wins Ship Building Order From Italy's Cube Spa

JAKARTA, June 25 Asia Pulse - State-owned shipbuilding company PT PAL Indonesia has received an order from Italy's Cube SpA to build a 18,500 DWT dry cargo vessel, PAL President Adwin H. Suryohadiprodjo said.
Adwin said the Italian company will use the merchant ship for operation in the Mediterranean sea.

PT PAL is to complete the building of the ship in 1.5 years, according to a contract signed yesterday in the East Java capital of Surabaya between Adwin and Cube SpA chairperson Beneto Costa

PT PAL already built two similar ships for Germany in 1999. Earlier PT PAL said Turkish shipping company Geden Lines has placed order for two units of 50,000 DWT Double Skin Bulk Carrier (DSBC) under a contract signed earlier this month.

Double Skin Bulk Carrier ordered by the Turkish shipping company is the largest ever built by PT PAL, Adwin has said.

(ANTARA)

is PT PAL like one of the largest company that builds ships??

i mean in the world? ehhehe forgot to add that

Govt opens tender of 10 oil, gas blocks

Fitri Wulandari, Jakarta

The tender process officially began on Monday for 10 oil and gas block acreages, and offer a better production split and incentives for investors.

Iin Arifin Takhyan, director general of oil and gas at the Ministry of Energy and Mineral Resources, said the incentives and higher production split were aimed at luring investors.

The 10 oil and gas acreages being offered are the Lhokseumawe block in Aceh province, Ujung Kulon in Banten, East Java's Northeast Madura III, Northeast Madura IV, Northeast Madura V, East Nusa Tenggara Rote I, Rote II, Maluku's Babar and Selaru, and Manokwari in Papua province.

Interested investors can obtain bidding information starting from July 6. Bidding documents must be submitted by Sept. 30.

Bid winners will be announced in October, followed by the signing of contracts.

Iin said that major oil and gas investors such as U.S. ExxonMobil Oil Indonesia and PT Caltex Pacific Indonesia had shown interest in three of the blocks, namely Northeast Madura III, IV and V.

"The Java area is considered a hot spot because there are more new oil and gas findings," Iin said.

The government is offering a higher production split of 35 percent for oil and 40 percent for natural gas for the following blocks: Rote I and II, Babar, Selaru and Manokwari. The government is offering a higher split because these acreages are located in remote areas.

"This is a very generous offer," Iin said.

Investors normally get a 15 percent revenue split from oil investment, and 30 percent from gas.

The government is also offering fiscal incentive for the development of the Lhokseumawe, Ujung Kulon, Rote I and II, Babar, Selaru and Manokwari blocks.

Iin did not provide details on this, only saying that the incentive was aimed at luring investment in developing gas fields amid high demand for natural gas.

Bidding for the 10 blocks was supposed to start last year, but the government delayed it as the Ministry of Finance wanted to impose value-added tax on the importation of equipment used in oil and gas exploration.

The Ministry of Mineral Resources and Energy has said that the tax plan was opposed by oil and gas companies as it would increase the cost of exploration work while there was no guarantee the results would be successful.

The companies currently pay the tax only after commercial production.

Iin said his office was continuing talks with the Ministry of Finance, but it would not hamper the tender of the oil and gas blocks.

The government will open a second round of bidding for another 10 oil and gas blocks later this year.

Indonesia has been struggling to boost investment in the oil and gas sector, chiefly to lift sagging oil production.

Current oil production reaches 1.072 million barrels per day, including condensate which is lower than the output quota set by the Organization of Exporting Petroleum Countries (OPEC).

Indonesia is the only Southeast Asian country that is a member of OPEC.

dunno.. but i do know that PT PAL has a lot of high tech machinery that is never used.
those machinery was bought when they have foreigner working there. local worker just dont have the skill to use the machine.

is PT PAL like one of the largest company that builds ships??

not in the world, but surely in Southeast Asia, South Korea is the largest ship builder in the world

cheers

Businessmen Hope New Indon Govt Will Boost Property Dev't

JAKARTA, June 29 Asia Pulse - A new government which will be set up after presidential elections on July 5 and Sept 20 will hopefully encourage labour-intensive property development, a real estate developer company director said here Monday.
A lot of people will get job if the next government supports the development of a growing property sector, Summarecon Agung (BSE:SMRA) director Johannes Mardjuki said.

The development of property business will influence the growth of other industrial sectors, he said.

The publicly-listed Summarecon Agung will build new clusters of homes, a housing complex and office-houses on 400 hectare land in Serpong, West Java, beginning late this year.

Johannes expressed confidence property sector will continue to increase until 2006 or 2007.


(ANTARA)

It is good for PT PAL to start getting more projects. I wish all the state enterprises in Indonesia could be abolished and be transferred to and managed by private sector. That way, all these enterprises can be rid of corruption and be competitive. I for once think Garuda should be privatized soon.

INDONESIA MAY EXPORT RISE 5,60% TO 5.50 BILLION US

JAKARTA, July 2 Asia Pulse - Indonesia's exports in May 2004 slightly rose by 5.60 per cent to US$5.50 billion from US$5.20 billion a month earlier, the central bureau of statistics (BPS) said.
Non-oil/non-gas exports increased 3.20 per cent to US$4.15 billion and oil/gas exports rose 13.79 per cent to US$1.18 billion, the board's chief, Soedarti Surbakti said on Thursday.

Crude exports rose 29.02 per cent to US$597.5 million, oil product exports 17.06 per cent to US$179.1 million and natural gas exports 0.44 per cent to US$568.1 million, she said.

Overall, exports in the January-May 2004 period went up 2.21 per cent to US$25.71 compared to the same period last year.

The exports consisted of oil/gas exports worth US$6.06 billion and non-oil/non-gas exports worth US$19.65 billion.

The bulk of non-oil/non-gas exports in the January-May 2004 period came from machineries/electrical appliances worth US$3.11 billion, with vegetable fat and oil trailing behind with US$1.59 billion.

Over the period Japan was the biggest market for Indonesia's non-oil/non-gas exports, buying US$3.14 billion worth of commodities.

The United States came in second with US$2.94 billion, followed by Singapore US$2.10 billion and China US$1.04 billion.

Meanwhile, imports in May 2004 fell 6.81 per cent to US$3.22 billion from US$3.46 billion in the previous month.

Cumulatively, imports in the first five months of 2004 rose 24.38 per cent to US$16.88 billion from US$13.57 billion in the same period last year.

"The increase was fueled by oil/gas imports which rose 33.04 per cent and non-oil/non-gas imports which moved up 21.83 per cent," she said.

Japan was listed as the biggest supplier of non-oil/non-gas commodities to Indonesia in the January-May 2004 period with US$2.04 billion, followed by the United States US$1.29 billion, and China US$1.17 billion.

(ANTARA) C

I think this year, we will reach 70 Billion dollars exports, our trade surplus reached 30 billion dollar last year.:okay:

cheers

Since the topics related within 2 threads (business & railway), I posted on both..


MHI and Sumitomo Corporation Receive First Order
For Rail Transport System Project in Indonesia



Tokyo, June 24, 2004 -- Mitsubishi Heavy Industries, Ltd. (MHI) and Sumitomo Corporation will sign an agreement today with the Directorate General of Land Communications (DGLC), Ministry of Transportation of Indonesia, for construction of a railcar depot. The project is financed by a yen loan from the Japan Bank of International Cooperation (JBIC). The order is worth approximately 6 billion yen.

The order calls for a new depot to be constructed on 26 hectares of land in the Depok district about 30 kilometers south of Jakarta. Facilities will include a maintenance depot and carriage yard for rolling stock serving residents of the greater Jakarta area. The full turnkey order encompasses civil engineering and construction work, laying of railroad track, installation of systems for power supply, signals and communications equipment, and maintenance and other on-site machinery. The construction will get under way in July this year with a target completion date of July 2007.

The railway network in and around Jakarta has been steadily improved and expanded with Japan's financial assistance; however, the need for a new railway depot has become an urgent priority as the numbers of railcars have remarkably increased. The completion of the new depot at Depok is expected to enable a dramatic improvement in the network's maintenance and management capacity.

The Depok project represents the third railcar depot order received jointly by MHI and Sumitomo to date. Earlier the two companies completed a depot in conjunction with the Line 2 project in Manila, the Philippines, also backed by a yen loan, and they also constructed a depot as part of the EDSA Metro Rail Transit (MRT) Line 3 project. The latter railway transportation project, worth approximately 50 billion yen, called for total system development and construction, including civil engineering.

MHI has vast experience in chemical and power plants in Indonesia, but this marks its first order from that country in the railway segment. Today MHI is concentrating its efforts into winning orders for large-scale railway projects throughout Southeast Asia, and on the strength of this latest order it will target other rail transport system projects in Indonesia.

Sumitomo, which will supply signal equipment, has a solid record of experience in the field of railway transport systems in Indonesia. The company has delivered more than 500 railway cars to Indonesia's national rail operator.

Within Jakarta's rail transport network, a project to electrify and expand the Bekasi Line to a double-double track is now in the detailed design phase; the project is to be financed under a special yen loan arrangement. A number of large-scale railway system projects are currently planned, including the Jakarta MRT project, and it is expected that these projects will be realized in the future. High expectations are also held for a large number of railway projects of major scale planned outside the greater Jakarta area: for example, conversion to double track along the Java North Line.


About Sumitomo Corporation
Sumitomo Corporation (SC) is one of the world's leading traders and distributors playing a key global role in the exchange of a wide range of goods, services and technologies among nations and cultures, operating 132 oversea offices in 73 countries. Over the year, the scope of its business has expanded from that of a trader to become investor, financier, and expediter of ideas. For financial year ended March 2004, Sumitomo Corporation had total trading transactions of 9,197 billions of yen, gross profit of 501 billions of yen and net income of 66,612 millions of yen respectively.

For more information, please visit the SC website(http://www.sumitomocorp.co.jp).


About Mitsubishi Heavy Industries
Mitsubishi Heavy Industries, Ltd. (MHI), headquartered in Tokyo, Japan, is one of the world's leading global heavy machinery manufacturers, with consolidated sales of 2,373 billion yen in fiscal 2003 (year ended March 31, 2004). MHI's diverse lineup of products and services encompasses shipbuilding, steel structures, power plants, chemical plants, steel plants, environmental equipment, industrial and general machinery, aircraft, space rocketry and air-conditioning systems.

For more information, please visit the MHI website (http://www.mhi.co.jp).

Review - Oil & Gas: Investment Surge Forecast
July 25, 2004 11:39 PM,

Laksamana.Net - Energy and Mineral Resources Minister Purnomo Yusgiantoro is predicting oil and gas investment will reach $7.49 billion this year, up 41% from $5.305 billion last year.

“Recent achievements in the oil and gas sector point to the increase, even though there are still several problems that have to be resolved together with stakeholders," he was quoted as saying Wednesday (21/7/04) by the Bisnis Indonesia daily.

Of this year's investment, $779 million is expected to come from exploration, $2.097 billion from development, $3.931 billion from production costs and $685 million from administrative costs.

Indonesia aims to sign 27 oil and gas contracts this year, compared with 15 contracts last year.

Although Indonesia has the world's 16th largest proven oil reserves and should therefore be enjoying huge profits handsomely from high world oil prices, the country’s production has slumped over recent years due to declining output at ageing fields and falling investment in the sector. This year the country became a net oil importer for the first time.

Indonesia’s oil production is presently at about 1 million barrels per day, well below its quota of 1.27 million from the Organization of Petroleum Exporting Countries.

Despite declining oil production, prospects are brighter in the gas sector. The Energy and Mineral Resources Ministry’s director of processing Erie Sudarmo said gas investment has amounted $112.6 million since the sector was liberalized a year ago.

That investment comprises $51 million from the development of natural gas distribution networks and about $61 million from the construction of liquefied petroleum gas (LPG) production plants and reception terminals.

"The investment will increase in the future when government regulations on the oil and gas downstream sector have been issued," Sudarmo was quoted as saying by The Jakarta Post daily.

President Megawati Sukarnoputri is yet to sign a draft regulation on the deregulation of the oil and gas downstream sector, which is due to come into effect by November 2005.

The Oil and Gas Supervisory Agency (BP Migas) recently predicted that state revenue from the oil and gas sector will reach almost $11.3 billion this year, compared with $10.5 billion in 2003.

BP Migas head Rachmat Sudibyo said the higher world oil price was compensating for Indonesia’s declining output.

He said state revenue should increase further over coming years following the discovery of two new oil and gas fields: the Jabung block in Jambi province operated by PetroChina, and the Pangkah block offshore northeastern Java operated by Amerada Hess.

Auto Sector Moves Forward
July 31, 2004 03:59 PM,

Laksamana.Net - In a week of positive news in the development of the automotive sector, Japan's Suzuki Motor Corp announced it will make Indonesia its major global production center for production of all-purpose vehicles (APV), Antara reported.

Managing Director Shinzo Nakanishi said the company is expanding production facilities outside Japan, and Indonesia has been chosen to become the production center for APV cars. He did not provide any details on the investment required.

PT Honda Prospect Motors plans to increase exports of its Honda Stream cars by 18% in 2004 to 1,680 units. Sales and marketing general manager Jonfis Fandy said expanded exports had began in June with shipments to Malaysia. Last year, its entire exports of 1,421 units were made to Thailand.

Fandy said the company had invested $100 million over the past two years to build a new factory for the vehicle’s production, also producing components including engines, cylinder blocks and transmission components.

Component maker Ingress Corp Bhd meanwhile said it expects its Indonesian operations to start contributing significantly to revenue in the next two to three years, Malaysia’s Business Times reported.

Executive vice-chairman Rameli Musa of the Malaysian-based company said Indonesia will be Ingress' centre for growth in the long term as it has a good market base, with total industry volume (TIV) expected to reach 400,000 units this year. He said Suzuki’s decision to locate its APV production center in Indonesia was one reason for the enthusiasm.

Ingress' initial entry into Indonesia this year was rewarded with contracts to supply mouldings to Mitsubishi and sash to Suzuki. Supply has begun for the Mitsubishi project, while mass production for the Suzuki product has just started. Musa said the company is talking to other carmakers to supply parts, saying that Isuzu was one potential partner.

"Not only are we marketing to car manufacturers, we are also targeting existing vendors of the manufacturers in the hope of forming alliances or acting as a Tier-2 vendor to these companies," he said.

In the only bad news for the sector last week, PT Hyundai Indonesia Motor said it has postponed plans to produce its Hyundai Matrix car model in Indonesia. President Jongkie D. Sugiharto said the company, which currently imports the models, had planned to increase investment to produce the car domestically, but its principal Hyundai Motors in South Korea has asked for a postponement.

Review - Private Enterprise: Confidence Soars
August 1, 2004 11:41 PM,

Laksamana.Net - Consumer confidence in current economic conditions and future prospects showed marked increases in June in a number of studies released last week.

The Danareksa Research Institute (DRI) said in its latest survey, the consumer confidence index rose from 97.7 at the beginning of the year to 100.7 in June - a level of confidence not seen for two years.

It said consumers were also confident of further economic recovery in the second half of this year, as indices gauging sentiment on job creation and family income prospects for the second semester rose 1.4% and 3.3% to 103.4 and 111.3, respectively.

Confidence in the government also improved in June, with the government index rising to 119.1 from 111.9 in the previous month, reported The Jakarta Post .

The research center concluded that the government would be able to maintain security (up 3.7%) and fairness (up 6.2%), stabilize prices (up 12.3%), improve public facilities (up 4.8%) and maintain growth momentum (up 6.6%) during the second half of this year.

One day prior to the release of the DRI survey, the central bank also announced its findings on current consumer confidence and said the June index reached its highest level in three years.

The Bank Indonesia survey showed that the June consumer confidence index at 92.4 – up 0.9 points from 91.5 during the previous month, reported Bisnis Indonesia.

But both studies said that optimism in the economy would face another test in the lead-up to the run-off presidential election in September.

"Should the second round of the presidential election proceed without any confidence-impairing events, Indonesia's upcoming president will be greeted with fabulous growth momentum in the beginning of the last quarter of 2004," the DRI study said.

Elsewhere in the region, the latest MasterIndex survey showed that Indonesia was one of just five Asia-Pacific countries where consumer confidence is on the increase.

Overall, the region's MasterIndex of consumer confidence was 63.7, a drop from 66.5 six months ago, reported DPA.

Vietnam was the most optimistic nation with a consumer confidence score of 91.6 for the second quarter of 2004.

Indonesia's index improved from 49 to 67.3, Singapore's index went up to 71.9 from 65.3, the Philippines went from 34.3 to 54.7 and Japan from 31.8 to 47.6.

Yuwa Hedrick-Wong, MasterCard's Asia-Pacific economic adviser, told Singapore’s Business Times that the drop was largely due to the outlook on stock markets, shaken by the interest rate hike at the U.S. Federal Reserve in June.

Candidates on Economy’s Future
August 2, 2004 08:06 PM, By the Editor

Laksamana.Net - In what was an unprecedented event in Indonesian politics, the two candidates in September’s presidential elections met with the national and foreign business community on 2 August in a public forum on the economy.

While the event was less than the ‘dialog’ it claimed to be, it nevertheless provided a rare confrontation between President Megawati Sukarnoputri and her many detractors, and an opportunity for a closer look at her opponent, Susilo Bambang Yudhoyono.

Yudhoyono offered more open government and a ‘troika’ of government, business and the community to discuss policy, while Megawati offered steady-as-she-goes economic management.

The event, organized by the Indonesian Chamber of Commerce and Industry (Kadin) at the Jakarta Convention Center, was marred only by Megawati’s late arrival for the afternoon session. Participants joked as they waited for her that people outside were laying bets on just how late she would be.

In the end, she turned up an hour late, accompanied by Minister for Industry and Trade Rini M.S. Soewandi and State Minister for State-owned Enterprises Laksamana Sukardi.

Confronting the morning session and a panel of senior figures from the national and foreign business communities was Yudhoyono, accompanied by his running mate, Jusuf Kalla. Kadin chairman M. Hidayat introduced the pair, and Yudhoyono was off and running.

The former general was gentleman enough to start with a vote of thanks to Megawati, who he acknowledged had done much to stabilize the economy, a theme that the incumbent would dwell deeply on in her presentation later in the day.

Where Yudhoyono parted company with her was in pushing for “a new social contract in which we develop a constructive spirit to work together.” He referred to a ‘troika’ of government, business and the community which would sit together at least every three months to discuss policy directions.

In a speech accompanied, to the surprise of his audience, by a carefully choreographed slide presentation, Yudhoyono set out targets his government would aim for if he was elected. Growth was targeted at 7.6% by the end of the term in 2009.

He would aim to cut unemployment from the current estimate of 10.1% to 5.1%; per capita gross domestic product (GDP) to rise from $968 to $1,731; poverty to fall from 17.4% of the population to 8.2%; and investment as a proportion of GDP to rise from 16% to 30%.

Infrastructure development would provide a “jump start” for the economy, he promised. Business must do its part by creating opportunity, implementing good business practices and working together with the community as a whole.

“There is no magic formula but I firmly believe that through partnership we can achieve much,” Yudhoyono stated.

Then came the turn of the panelists. First up was Sofyan Wanandi, head of the Indonesian Employers Association (Apindo). A stern critic of the present government, Wanandi said for the past three years “we have each been going in our own direction”.

A reduction in unemployment was the surest sign of success for a government but at the moment there were more people working in the informal sector than in the formal, and the situation got worse each year.

Wanandi praised Yudhoyono’s choice of Jusuf Kalla as his vice president, adding that “it is time we showed that a businessman can lead this nation”. Somewhat to everyone’s surprise, he then turned to the audience and declared that Yudhoyono and Kalla were his choice for the national leadership.

Then followed Philip Shah on taxation, John Arnold on infrastructure, Todung Mulya Lubis on the need for legal certainty, Leonard van Hien on investment and Noke Kiroyan on competitiveness.

Each of the panelists painted a gloomy if realistic picture of their particular areas of discussion. Arnold mentioned that $17 billion a year was needed in infrastructure spending over the next decade.

Yudhoyono responded by agreeing in general with each of the panelists. “I believe infrastructure can be effective in assisting in dealing with unemployment,” he noted. He agreed that law enforcement needed to be improved and that while it was essential to respect the independence of the judiciary, there was a need for better coordination. He also pointed to the need for a dispute resolution program in disputes.

Jusuf Kalla was given the last word, after sitting silently for the whole of the session. Speaking to his home-town crowd of fellow Kadin members, Kalla quickly summarized all the points of Yudhoyono’s policy statement and handed the floor back to the moderator to close for lunch.

Fresh air
“This is impressive,” said one Indonesian business participant. “I’m not sure if even in the United States they have open dialog like this. It certainly is a breath of fresh air that we can engage directly with the candidates.”

Some of the enthusiasm had worn off by the time Megawati finally arrived at 3.03pm, flanked by Laksamana Sukardi. Soewandi arrived five minutes later.

Hidayat repeated his speech of the morning, and then passed the rostrum to the President. She began her much-awaited delivery by reminding the audience that not only was she a candidate for the presidency but also the active President.

Her statement centered strongly on the theme that her government had created stability. Indonesia’s recent history was a three-phase process – economic collapse and drastic political change, followed by stabilization, ready for the third stage of growth.

She insisted that her government had introduced almost all of the programs recommended by Kadin. “At the beginning we were in a dilemma. Did we want to introduce reforms rapidly or more steadily? It is always necessary to seek improvement but the reality is that it is more sensible to do things in stages,” she said. “Looking forward, much more is required.”

“We also have to remember that it was easier to introduce change because the system of government was very centralistic. What is also required is a major mental transformation.”

Many major projects were now being re-started following renegotiation of contracts. “There is a need for people to work together to maximize the results of stabilization and achieve the targets of the third stage of renewed growth,” she concluded.

Then came a new group of panelists. Less disciplined that the first set that explained their view of the economy, Hariadi Hamdani on tax and Hasannuddin Rachman on labor spoke for too long.

More succinct were Peter Fanning on the law, Aburizal Bakrie on infrastructure, Rachmat Gobel on investment, and Joe Bartlett, also on investment, who demanded three-monthly meetings with the foreign business community and the formation of a national ombudsman office.

Megawati listened with a slightly aggrieved air to the comments from persons who she might have considered to be coffee shop theorists, while Soewandi made a few notes and occasionally giggled in the President’s ear, clearly enjoying herself. Sukardi spent the entirety of the session with his head down, making copious notes.

Megawati maintained her calm despite the lectures she was made to listen to on problems which she is more than aware of, having to deal with them on a daily basis. Responding, she adopted an incredulous air, stating that virtually everything that had been recommended had either already been implemented, was currently being implemented, or would soon be implemented.

It should not be forgotten, she said, that Indonesia had repaid a large slice of its debt. Business should understand the situation of the government and accept that the government was working for change.

The introduction of regional autonomy had meant that the tax take had to be shared with the provinces, she said. “Your suggestions should be implemented but we have been in the situation of improving the health of the economy in order to do these things”.

She handed the floor over to Sukardi, who quickly ran through some slides that showed the distinct improvement in the economy during the government’s three-year term. A far greater proportion of the budget was now funded from taxation, debt was down, the foreign exchange reserves were at an all-time high, inflation was much reduced.

There was essentially little difference between the policies presented by the candidates. At most, the business community, and the electorate with it, is now faced with having to decide whether Megawati hasn’t done enough and choose a future hinged on the hope that Yudhoyono can do better, or stick with the slow and steady course set by the current government.

MADIUN (Bisnis): PT Industri Kereta Api tahun ini akan meng-ekspor sedikitnya 385 unit komponen untuk gerbong barang, senilai Rp27 miliar, yang dipesan perusahaan kereta api dari Australia.
Surjanto, manajer ekspor PT Inka, mengungkapkan pesanan komponen itu merupakan yang kedua kalinya, setelah 2003.

"Kami masih dipercaya oleh industri kereta api dari mancanegara, indikasinya terlihat berbagai pesanan untuk pembuatan komponen kereta api penumpang dapat diraih," ujarnya pekan lalu.

Dia mengatakan peluang untuk mendapatkan berbagai pesanan komponen KA dan industri sampingan masih terbuka lebar, meski nilai dan volumenya tidak terlalu besar.

PT Inka sudah melakukan ekspor komponen KA sejak 1991 lalu ke Malaysia, Thailand pada 1997, dan ke Malaysia pada 2002.

"Untuk industri sampingan, kami kini juga melakukan ekspor ke Jepang yakni dalam bentuk dumtruck, yang hingga kini sudah mencapai pengapalan keenam," ujar Suryanto.

Asisten Deputi Mekanisme Difusi Iptek Kementrian Ristek Finarya Legoh mengatakan bila ingin sejajar dengan negara lainnya, Indonesia harus memiliki industri yang berbasis teknologi, sehingga tidak tergantung kepada produk impor.

"Dalam konteks ini, PT Inka sa-ngat dibutuhkan karena produknya seperti KA penumpang dan barang penting untuk angkutan masyarakat, terutama untuk jarak dekat dan menengah," ujarnya.

Kemampuan manufakturing PT Inka ini, paparnya, harus dipertahankan meskipun pada saat ini terjadi penurunan pesanan dari dalam negeri.

"Pada fase tertentu memang ada engineering cost yang harus dipikul bersama," katanya.

Karena itu, lanjut Finarya, perlu ada keberpihakan dari pemerintah untuk menunjang dan membantu sejumlah badan usaha yang sekarang bertugas dalam pengembangan teknologi tersebut.

PT Inka berdiri sebagai BUMN industri kereta api pada 1981, yakni peralihan fungsi dari Balai Yasa PJKA. Pada 1989 Inka menjadi salah satu dari 10 BUMN industri strategis dibawah koordinasi BPIS. Sejak 2002 lalu Inka dalam status peralihan koordinasi dari Kantor Menneg BUMN setelah BPIS dalam proses likuidasi.

Dengan dukungan 850 karyawan, kata Surjanto, PT Inka setiap tahun mampu memproduksi sedikitnya 300 unit gerbong barang, 60 unit kereta penumpang, 200 unit bogie dan diversifikasi berbagai produk lainnya.

Target Rp160 miliar

Tahun ini, lanjut Suryanto, Inka mentargetkan pendapatan sedikitnya Rp160 miliar. Angka ini masih lebih besar dibandingkan realisasi pendapatan 2003 sebesar Rp130 miliar.

"Pada kondisi normal dulu, pendapatan Inka mencapai Rp190 miliar, namun karena adanya penurunan order dari PT Kereta Api [PT KA] ini mempengaruhi pada pendapatan Inka. Namun masih tertolong dengan order-order yang diraih dari luar negeri."

Penurunan order dari PT KA, paparnya, karena selama dua tahun terakhir ini perusahaan kereta api yang merupakan BUMN itu mengurangi pemesanan gerbong penumpang maupun gerbong barang.

Hal ini terjadi karena PT KA kalah bersaing dengan moda udara yang bisa memberlakukan tarif murah.

"Pesanan gerbong untuk KA eksekutif dan bisnis turun drastis, sementara gerbong untuk KA ekonomi masih terdapat pesanan dari Departemen Perhubungan. Penurunan produksi kami sekitar 20% akibat kondisi itu," ujarnya. (en)

Kapitalisasi Apartemen Jabotabek Naik 90 Persen
JAKARTA - Pertumbuhan kapitalisasi bisnis properti tahun 2003 hingga 2004 meningkat signifikan. Peningkatan itu dinilai mampu menggerakkan sektor riil melalui konsumsi.

''Pertumbuhan nilai kapitalisasi apartemen di Jabotabek paling tinggi, mencapai 90 persen,'' kata pakar properti Panangian Simanungkalit pada diskusi properti di Jakarta, akhir pekan lalu.

Panangian memerinci, setelah apartemen di Jabotabek, menyusul proyek apartemen di luar Jabotabek yang nilai kapitalisasinya tumbuh 53 persen, perkantoran di Jabotabek 50,8 persen, proyek hotel nasional 49 persen, proyek pusat perbelanjaan modern Jabotabek 30,7 persen, pusat perbelanjaan modern daerah 23,1 persen, proyek perumahan nasional 21,8 persen, dan proyek ruko/rukan nasional tumbuh 6,6 persen.

Secara total, pascakrisis properti tahun 2000 lalu, nilai kapitalisasi bisnis properti meningkat 200 persen, dari rata-rata Rp 12,5 triliun menjadi Rp 37,5 triliun.

Panangian mengatakan, saat ini properti berperan memicu arus dana ke dalam negeri, yang sebelumnya diparkir di luar negeri. ''Bisnis properti bisa bergerak tanpa dukungan kebijakan stimulus dari pemerintah,'' katanya.

Jumlah pengembang juga bertambah 30 persen dari 1.000 menjadi 1.300 sehingga bisa disebut perusahaan-perusahaan itu menjadi penyelamat ekonomi. ''Bisnis properti tampil menjadi penggerak utama sektor riil melalui konsumsi,'' ujarnya.


Cerah

Sementara itu di tempat terpisah, Direktur PT Dharmala Intiland Tbk, Suhendro Prabowo mengatakan, pihaknya merasa yakin pasar apartemen tetap cerah. Karena itu, dalam waktu dekat pengembang itu berencana membangun 10 menara lagi apartemen kelas atas di Pantai Mutiara, Jakarta Utara.

Saat ini, di Pantai Mutiara sedang dikembangkan Apartemen Pantai Mutiara dan Suite Pantai Mutiara. Apartemen itu terdiri dari empat menara, yakni Aru, Bunaken, Damar, dan Enggano. ''Total unitnya 394 dan sudah terjual 85 persen,'' katanya. Harga apartemen di lokasi itu saat ini antara Rp 8,5 juta sampai 10 juta per meter persegi dan harga Suite antara Rp 8 juta sampai 9 juta per meter persegi.

Pesatnya pembangunan properti di Pantai Mutiara mendorong pula kenaikan harga lahan. Pada waktu pertama kali dikembangkan tahun 1986, harga lahan di lokasi itu Rp 400 ribu per meter persegi. Kini sudah melonjak menjadi Rp 8 juta per meter persegi. (N-6)

Good to see property market is now booming not only in Jabotabek. I read in Kompas feb 2004 property special edition and the property booming is reaching kalimantan too!

very cool :cheers:

cheers

It seems Indonesia has to do something about the birth rate. As it stands the nation, like China, will need a maintained growth rate of over 6% to absorb those entering the work force. Anyway, I actually think Megawati's prediction of 5.4% growth in 2005 is realistic. At least much more realistic than SBY throwing around the words "7%."

Yup, Megawati economic platform is very realistic because her economic team is very solid, her finance minister (budiono) and development minister (kwik kian gie) are the solid key, 5.7% for Indonesia next year is what it supposed to be.

as you know Indonesia Q2 GDP is 4,35%. And year on year prediction is 4,8% in 2004


cheers

one thing we should appreciate from Mega is the stability she brought. When Gus Dur was in power, everymorning I wook up I asked myself 'What else today?' as everyday a new polemics produced. Very confusing.
I thinks the round off this sept will be very tight.

It seems Indonesia has to do something about the birth rate. As it stands the nation, like China, will need a maintained growth rate of over 6% to absorb those entering the work force. Anyway, I actually think Megawati's prediction of 5.4% growth in 2005 is realistic. At least much more realistic than SBY throwing around the words "7%."
hey SBY is targeting 5.5% next year, and 7.6% only in 2009 with average growth of 6.6% over 5 years. While Megawati is more unrealisitc, she's aiming for 6.8%! Personally i think they're both unrealistic. Indonesia would be lucky to have an average growth of 5.5%-6% in the next 5 years IMO.

Yup, Megawati economic platform is very realistic because her economic team is very solid, her finance minister (budiono) and development minister (kwik kian gie) are the solid key, 5.7% for Indonesia next year is what it supposed to be.

as you know Indonesia Q2 GDP is 4,35%. And year on year prediction is 4,8% in 2004


cheers
Others are more pessimistic though. With rising oil prices and slowing down of world economy, Indonesia's 2005 growth might slow down to 4.5%...

Hopefully the world economy wont slow down next year, it has big disadvantages for Indonesia, since we just started our new cabinet.


cheers

Jakarta, Indonesia, Aug. 26 (UPI) -- The International Finance Corporation, an investment arm of the World Bank, reportedly plans to increase its investment in Indonesia.

IFC Indonesia Manager German Vegarra said the agency planned to invest about $210 million in Indonesia during the next fiscal year starting in June and $250 million during 2006, up from $150 million this year, The Jakarta Post reported.

"We plan to raise our investment here due to the high economic growth predicted for the next couple of years and a more stable political condition," Vegarra said.

He said that aside from developing the country's small-and-medium enterprises and the agricultural and mining sectors, the investment would go mostly toward infrastructure, including power and water projects.

The agency has invested about $2.5 billion in Indonesia overall, making it its sixth largest recipient of funds.

The increased confidence shown by the IFC in Indonesia's outlook could have a positive impact on foreign direct investment in the country, which has been on the decline over the past several years for a number of reasons, including legal uncertainty, security fears, labor disputes and the poor implementation of regional autonomy, the newspaper said.

IFC to up investment on positive RI outlook


Rendi A. Witular, Jakarta

The International Finance Corporation (IFC), an investment arm of the World Bank, plans to increase its investment in Indonesia, Southeast Asia's largest economy, on optimism over the country's economic and political outlooks, a senior official said.

IFC country manager for Indonesia German A. Vegarra said the agency planed to invest about US$210 million in Indonesia in the next fiscal year starting in June and $250 million in 2006, up from $150 million this year.

"We plan to raise our investment here due to the high economic growth predicted for the next couple of years and a more stable political condition," Vegarra said during a press conference on Wednesday.

He said that aside from developing the country's small-and-medium enterprises and the agricultural and mining sectors, the investment allocated for next year would go mostly toward infrastructure, including power and water projects.

Since its founding in 1956, the IFC has committed more than $37 billion of its own funds and arranged $22 billion in syndicated loans for 2,990 companies in 140 developing countries.

The agency has invested about $2.5 billion in Indonesia overall, making the country the sixth largest recipient of IFC funds.

Its Indonesian portfolio covers more than 35 companies, including Bank NISP, Bank Buana, insurance firm Asuransi Jiwa, Manulife Indonesia, shipping firm PT Berlian Laju Tanker and automotive producer PT Astra International.

The increased confidence shown by the IFC in Indonesia's outlook could have a positive impact on foreign direct investment in the country, which has been on the decline over the past several years for a number of reasons, including legal uncertainty, security fears, labor disputes and the poor implementation of regional autonomy.

The IFC also announced on Wednesday a deal to provide $35 million in five-year senior loans and a partial guarantee of up to Rp 210 billion ($23 million) to Bank NISP.

The country's 12th largest bank in terms of assets said it would use the funds to enhance its risk management and to develop export-oriented industries.

"The funds will improve the bank's liquidity management and the balance of long-term funding sources for the disbursement of long-term loans," NISP president Pramukti Sarjaudaja said during the press conference.

The IFC is the third largest institutional shareholder in NISP with 15.05 percent ownership. Oversea-Chinese Banking Corp. Ltd., Singapore's third-largest bank, has a 22.5 percent ownership share in the Bandung-based bank.

i see JSX is declining..
must be waiting for the next election

JSX is declining because of heavy profit taking after government is increasing their oil subsidy thus the budget deficit slightly higher than what it expected.

Rupiah has been very stable this past days.

cheers

Forbes has put up a list of the richest people in Southeast Asia. The link is extremely long, so you can just check out Forbes.com's front page.

Review – Economy: Reverse Mode
August 29, 2004 11:58 PM,

Laksamana.Net - Indonesia’s economy is in reverse, with only one secondary export commodity showing gains and with the country increasingly reliant on primary commodities, Bank Indonesia (BI) Governor Burhanuddin Abdullah said Friday (27/8/04).

A BI survey conducted last year of the performance of 30 major export commodities found that only eight were demonstrating growth, and only one was a product of secondary industry, he told a seminar on micro-finance.

“Our exports look fantastic but in the last few years the reality is very bad. We have suffered a setback in which our economy is reliant on primary commodities. The only secondary industry that is showing growth is electronics,” he said, according to Kompas.

The situation was vastly different to that before the economic crisis, when 28 out of 30 major export commodities were showing growth, some as high as 40%.

The poor export performance was also seen in areas in which Indonesia did possess competitive advantage.

Director General for Metal Industries, Electronics and Miscellaneous Industry at the Department of Industry and Trade, Subagyo, agreed that exports were mainly being driven by the primary sector.

Many factors were contributing to the poor performance of secondary exports, including the role of value added tax. He cited cocoa as one crop that was exported in raw form because of the disincentives to in-country processing.

Other factors that contributed to poor performance were the cost of components such as energy, labor and transportation, while even within the domestic market, Indonesian products were at a disadvantage due to unhealthy competition from overseas goods, many of them smuggled into the country. The banking industry had yet to provide effective support for secondary industry growth, Subagyo added.

Separately, Industry and Trade Minister Rini M.S. Soewandi was striving to paint a more positive picture of the country’s export performance. She said non-oil and gas exports could be expected to grow by as much as 10% next year, with an estimated 7% growth this year to $50 billion. She said the export growth was related to improved economies in destination countries, Antara reported.

The government was also under pressure with rising oil prices forcing far higher subsidies for fuel. Finance Minister Boediono admitted Tuesday (24/8/04) that the budget deficit this year is likely to reach 1.3% of gross domestic product, up from the original target of 1.2%.

As a result of the tighter fiscal position, taxpayers can expect a tougher time with tax officials as the latter strive to achieve higher revenue targets amid predictions of potential losses as a result of the new Tax Law.

The 2005 draft budget projects revenues from taxes, including excise and import duties, to increase by 9.3%, to Rp297.5 trillion from Rp272.2 trillion last year, The Jakarta Post reported.

While the increase is lower than in earlier years, when increases averaged 14.2% a year over the past three years, officials say the target will not be easy to achieve unless the government boosts enforcement.


The new Tax Law lowers tax for corporations and institutions to a flat rate of 28%, down from 32%. Other changes will reduce tax for individuals with incomes below a certain level.

US signs 468 million dollars development deal with Indonesia

JAKARTA, Aug 30 (AFP) - The US government signed agreements to provide Indonesia with 468 million dollars to develop its creaking health, education and environment sectors.

The deal, -- the largest single development package between the two countries -- was signed at a ceremony attended by US ambassador to Jakarta Ralph Boyce and Indonesia's welfare minister, Abdul Malik Fajar, a US statement said.

The funds, which will be administered primarily through the United States Agency for International Development (USAID), will be used in programmes to support education, health, water, nutrition, and the environment, the statement said.

The United States, which counts Indonesia among allies in its war on terror, currently provides the country with an annual 160 million dollars for development programmes through USAID.

Boediono sees rising investment next year

Dadan Wijaksana, The Jakarta Post/Jakarta

The government was upbeat on Monday about the country's economic prospects for 2005, which it said would be marked by the revival of the industrial sector activities due to the return of investors, both foreign and domestic.

The brisker real sector activities would then help the economy to expand by 5.4 percent, as targeted under the 2005 state budget plan, Minister of Finance Boediono told members of the House of Representatives State Budget Commission during a hearing.

"Even this year, the signals of improved real economic activities, due to a boost in investment, are already there. We expect the trend to continue next year," Boediono said, adding that the peaceful elections have helped reduce the level of uncertainty for investors.

He was responding to criticism by some legislators who suggested last week at a plenary session that the 2005 economic growth target of 5.4 percent was overly ambitious and unrealistic.

However, Boediono said that investment in the first and second quarter of the year alone had managed to grow by 7.4 percent and 9.3 percent respectively from previous quarters. In comparison, investment grew in the third quarter last year by only 1.3 percent and was even contracted by 0.5 percent in the fourth quarter.

This helped accelerate economic activities in the industrial sector during the first half of this year, Boediono added, as can be seen in an improvement in the import of raw materials and capital goods in the first semester, which rose (year-on-year) by 29.4 percent and 17.9 percent, respectively.

"This is one of the indications of improvement in domestic real economic activities. This will continue in the upcoming period, and in turn will drive a higher economic growth," he said.

Indonesia's economy grew by 4.1 percent last year, the highest level since the crisis in late 1990s, with domestic consumption being the prime mover, taking over from investment as the main economic driver. The economy is estimated to grow by 4.8 percent this year.

Foreign and domestic investors have been shying away from the country due to various reasons, from political and security uncertainty to rampant corruption.

But, things would change for the better next year, according to Boediono. Foreign investors would start coming and investing in the country following the forming of the new government, resulting from the trouble-free election.

The role of domestic investors would also improve in line with more robust lending demand from the private sector to the banking sector to finance its business expansion.

"As of June this year, the undisbursed loans have reached Rp 20.2 trillion. It shows the private sector has yet to maximize the banking loans potential, which has a lot to do the political uncertainty.

"We expect the amount to reduce following the forming of the new government," he said.




Antam profit surges by 306 percent
The Jakarta Post, Jakarta

Publicly listed mining company PT Aneka Tambang said on Monday net profit had more than tripled in the first half of this year from the same period last year due to higher commodity prices and nickel ore sales volumes.

Antam's net profit jumped by 306 percent to Rp 374 billion (US$40 million) in the first half-year ending June 30, from Rp 92.218 billion in the same six-month period last year, the company said.

Earning per share for the first half of 2004 were Rp 196.15.

"The major reason for the increased revenue are the higher average selling prices of all Antam's products," the company said.

The average price for nickel contained in ferronickel rose 57 percent over the first half of 2003 to $6.16 a pound. Nickel prices have been bullish, spurred on by strong global demand, particularly from China, and because of a limited supply.

Ferronickel sales volumes decreased 33 percent to 3,080 tons compared to the same period last year. The company is planning to sell 8,000 tons of contained nickel in 2004.

In the second half of 2004, the company plans to carry out an overhaul of the FeNi II smelter facility. The plan is expected to decrease ferronickel production and sales volume.

Higher prices of gold had offset declining sales volumes in Antam's gold division. The price of gold has been increasing because of geopolitical insecurity and a weaker dollar, the company said. Antam's gold bars increased in price to $412.12 a troy ounce -- up 18 percent from last year.

In the first six months of this year, Antam's cost of sales increased 6 percent to Rp 692 billion. The company attributed the increase to materials, ore exploitation services, labor costs and depreciation. These four components accounted for 73 percent of the total cost.

However, the increase sales costs did little to affect the company's profit, as it was able to lower its indirect labor, water and electricity costs and repairs and maintenance charges, it said.

Antam's share price rose by Rp 25 to close at Rp 1,200 a share on the Jakarta Stock Exchange.




Indosat profit up 80%
Telecommunications company PT Indosat announced on Monday a nearly 80 percent increase in its first semester net profit compared to the same period last year thanks to strong revenue growth in its cellular division.

The publicly listed company said that net profit jumped to Rp 717.60 billion (US$78 million) compared to Rp 402.10 billion previously as revenue from the cellular division surged by 51 percent.

From January to June, Indosat expanded the number of its cellular service subscribers to 7.35 million, or a 70.5 percent increase compared to the same period last year, boosting revenue to Rp 3.37 trillion from Rp 2.23 trillion.

The jump in profit was also contributed to by a 17.8 percent increase in the multimedia, data communication and internet divisions. However, the first semester saw a 4.2 percent drop in the international call division, and a 29.3 percent dip in other divisions.

In anticipating increased cellular service demand in the first semester, Indosat launched various marketing and promotion programs for Matrix-9 (no roaming or subscriber fees for post-paid services), and holiday packages for Mentari and IM3, and launched its fixed wireless access "Star One" service.

Indosat, which is 41.94 percent owned by Singapore-based Temasek Holdings via ST Telemedia, also plans to allocate up to $700 million for capital investment this year, 80 percent of which will be allocated to its cellular business. -- JP




Mandiri posts strong profit in first half
The Jakarta Post, Jakarta

Bank Mandiri, the country's largest lender by assets, said on Monday it had posted a 37.2 percent increase in its net profit in the first semester this year as compared to the same period last year.

The publicly listed bank's after-tax profit reached Rp 3.1 trillion (some US$330 million) as of June, up from Rp 2.2 trillion in the same period in 2003, the company said.

The net profit increase was largely because of a 36.7 percent rise in net interest income -- the margin a bank receives between interest expenses paid to depositors and interest revenue it gets from creditors.

Mandiri, along with most banks here, is enjoying hefty interest earnings in line with a declining trend in the Bank Indonesia's benchmark interest rate (SBI). Banks in Indonesia generally adjust their deposit rate downwards in line with the SBI faster than they decrease their lending rates.

Mandiri's net interest income stood at Rp 5 trillion in the first half of this year, up from Rp 3.6 trillion for the same period last year.

Other crucial indicators that gauged a bank's financial health were also encouraging, the statement said.

The bank's capital adequacy ratio (CAR) was at 27.5 percent, far above the 8 percent minimum requirement set by the central bank. However, its non-performing loans (NPLs) rose from 7.3 percent in the first semester 2003 to 8.2 percent as of June this year.

CAR compares a bank's capital with its risked-weighted assets including loans.

As of June, Mandiri boasted total assets of Rp 234.7 trillion, including Rp 102.3 trillion worth of government bonds.

Jakarta up 2.70%

share prices closed 2.70 percent higher aided by growing optimism for a peaceful, orderly presidential run-off election on September 20, dealers said.

News that candidates in the run-off could only campaign for three days compared to the one month period for the July 5 election, reduced anxiety over polling related violence and gave the market a lift, they said.

The Jakarta Stock Exchange composite index closed up 20.392 points at 775.096 on volume of 1.93 billion shares worth 1.32 trillion rupiah (US$141.5 million).

State telecom firm Telkom was up 300 rupiah at 7,950 while long distance operator Indosat also rose 50 at 4,250 rupiah.

EU says ASEAN economic unity will attract more foreign investors

JAKARTA (AFP): Southeast Asian economic integration would be a major boost for the region's efforts to attract foreign investment, European Union Trade Commissioner Pascal Lamy said on Sunday.

"It's a huge market. If ASEAN members agree on creating for European investors this feeling that when they set in one of these countries then they can reach the whole potential of the region, we believe this is a strong incentive for the development of investment and trade in the region," Lamy said.

Lamy, speaking after meeting with economic ministers from the Association of Southeast Asian Nations (ASEAN), said the different levels of development of the 10 ASEAN member countries should not be a major obstacle for economic integration.

"Singapore is obviously richer than Laos and Cambodia but this should not be a problem for trade and economic integration as long as the objectives of what you want to do are agreed within the ASEAN group," he said.

"The time it takes for country A to reach these objectives and the time it takes for country B to reach these objectives may not be the same. We in the European Union have this experience of merging together economic and regulatory systems which did nothave the same levels of economic development," he said.

ASEAN economic ministers on Sunday ended a meeting which saw Southeast Asia edge closer to a Europe-style single market, laying out a "road map" for integration and opening doors to wider global trade.

Under plans due to be ratified at an ASEAN summit in Laos in November, tariffs in 11 industry sectors will be abolished by 2012 -- forming a common market in them covering 530 million people.

Regional powerhouses China, Japan and South Korea, Australia and New Zealand agreed timetables for free trade with ASEAN at meetings which ended Sunday.

Lamy said the European Union had yet to decide when it would start free-trade negotiations with ASEAN but stressed that the EU was working on closer bilateral relations with individual ASEAN member countries.

Under ASEAN's economic integration plan, tariffs on rubber, electronics, autos, textiles, air travel, tourism, agriculture, e-commerce, fisheries, wood and healthcare will be scrapped in 2007 between ASEAN's six more developed members -- Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand.

Four other members, Cambodia, Myanmar, Laos and Vietnam, have been given until 2012 to abolish tariffs in the 11 priority sectors and to fully integrate with the ASEAN Free Trade Area (AFTA).

At a summit in Bali last October ASEAN leaders endorsed a plan to achieve a single production base and market by 2020, with a free flow of goods, services and investments in the region.

Officials said economic integration is crucial for ASEAN to better compete with fast-growing rivals. (**)

Pengusaha Arab Saudi tanamkan modal di Jabar

BANDUNG (Bisnis): Para pengusaha dari Arab Saudi akan segera menanamkan modalnya di Jawa Barat untuk pertama kalinya, dengan nilai investasi US$50 juta di empat bidang a.l. pariwisata, jalan tol, teknologi tinggi dan farmasi.
Ketua Delegasi Investor Arab Saudi Ghozi Saleh Syalhoeb mengungkapkan nilai investasi tersebut baru tahap awal dan diperkirakan jumlahnya akan bertambah seiring dengan kerja sama yang akan dilakukan antara para pengusaha negeri itu dengan Pemerintah Provinsi Jabar.

"Selama ini kami berinvestasi di Eropa dan Amerika. Namun terus terang hasilnya tidak sesuai harapan kami, terlebih setelah peristiwa 11 September. Untuk itu, kami akan mengalihkan investasi kami ke Asia dan untuk pertama kalinya di Indonesia," ungkap Ghozi di sela-sela pertemuan dengan Pemprov Jabar yang diwakili Wakil Gubernur Jabar Nu'man Abdul Hakim kemarin.

Dia mengakui untuk wilayah Asia Tenggara, Indonesia bukan negara pertama kali para pengusaha Arab Saudi menanamkan modalnya, karena sebelumnya telah lebih dahulu ke Malaysia.

Di Malaysia, jelasnya, para investor diberikan berbagai kemudahan seperti pembebasan visa atau kepemilikan lahan.

"Tidak seperti di Indonesia, yang kami tahu baru dua minggu kami langsung disuruh pulang lagi, belum lagi sulitnya memiliki lahan di sini. Untuk itu kami harapkan Pemprov Jabar bersedia memberikan kemudahan untuk kami," ujarnya.

Dia menjelaskan dalam kunjungan ini, anggota delegasi Arab Saudi siap menanamkan modal di bidang perikanan.

"Ini merupakan proyek kedua setelah sebelumnya anggota kami pun telah menanamkan modalnya di bidang pariwisata sebesar $6 juta," tandasnya.

Ghozi menambahkan pihaknya akan segera menanamkan modal pada pembangunan resor yang berlokasi di Kota Bandung dengan nilai investasi $8 juta.

Diperkirakan setelah kunjungan pertama tersebut, akan banyak pengusaha Arab Saudi yang mendatangi Indonesia, khususnya Jabar, untuk investasi di sektor perdagangan dengan nilai berkisar $30 juta hingga $40 juta.

Siap layani

Sementara itu Wakil Gubernur Jabar Nu'man Abdul Hakim mengatakan pihaknya akan mempertimbangkan dan mencari solusi mengenai permasalahan yang disampaikan delegasi pengusaha tersebut.

"Kami akan pilah mana bagian kami dan mana bagian pemerintah pusat. Seperti visa, saya rasa itu wewenang pusat. Mungkin kami akan mempertimbangkan masalah kepemilikan tanah."

Pemprov Jabar, katanya, menyambut baik minat investor Arab Saudi tersebut dan pemda akan segera menawarkan kerja sama yang memberikan keuntungan bagi kedua belah pihak.

Nu'man juga mengungkapkan ketertarikan investor Arab Saudi tersebut terhadap pembangunan infrastruktur di Jabar.

"Untuk itu kami akan tawarkan rencana pembangunan jalan tol di Jabar yang jumlahnya mencapai 12 jalan tol, dan saya rasa mereka akan tertarik," tandasnya.

Konjen RI untuk Arab Saudi menambahkan kedatangan para pengusaha Arab ke Jabar tersebut merupakan kelanjutan pameran yang dilakukan di Riyadh beberapa waktu lalu.

Menurut dia, selain Jabar masih ada delapan wilayah lainnya di Indonesia yang akan didatangi para investor itu untuk kemudian menanamkan modalnya.

Kedelapan daerah itu antara lain Jateng, Jatim, Riau, Lampung dan Sumsel. (k14)

Honda Jan-Aug Auto Sales Surge by 102% in Indonesia

JAKARTA, Sept 7 Asia Pulse - Sales recorded by Honda car maker in Indonesia PT Honda Prospect Motor (HPM) shot up 102 per cent year-on-year to 28,610 units in the first 8 months of this year.
Jonfis Fandy, HPM general manager, attributed the increase to good sales of its new products of Honda Jazz and sport utility vehicle (SUV), Honda CR-V.

The Honda Jazz led in the market with sales totaling 13,453 units in the January-August period, followed by the CR-V with sales totaling 4,667 units.

(ANTARA)

Honda begins construction of motorcycle plant in Indonesia

TOKYO (DPA): Japan's Honda Motor said on Wednesday its motorcycle joint venture in Indonesia has begun construction of its third manufacturing plant in a suburb of Jakarta.

The move is in response to the growing motorcycle market in Indonesia, Honda said.

The new plant by PT Astra Honda Motor Inc. will be located in MM2100 Industrial Town in Bekasi, 33 kilometers east of Jakarta, the Japanese automaker said in a statement.

The total investment is nearly US$100 million and the production at the new plant will start in October 2005 with an annual production capacity of 1 million units.

Honda began production of motorcycles in Indonesia in 1971 with a technical partnership with PT Federal Motor.

In 2000, PT Astra Honda Motor Inc., a 50-50 joint venture between PT Astra International and Honda, was established to pursue production of motorcycle parts, motorcycle engine and chassis assembly, and sales, the Japanese company said.

The motorcycle market in Indonesia is the third largest in the world at 3.1 million units in 2003, up 22 per cent from 2002. (***)

Honda to set up 3rd motorcycle plant in Bekasi


Zakki P. Hakim, The Jakarta Post, Jakarta

Japan's Honda Motor Co. Ltd. will set up a third motorcycle manufacturing plant in Indonesia in a joint venture with PT Astra International to take advantage of the growing motorcycle market in Indonesia, the world's third largest market, the company announced on Wednesday.

The new US$100 million plant, located at MM2100 industrial estate in Cikarang Barat, Bekasi, West Java, will start production in October 2005, and have an annual capacity of up to 1.2 million units.

PT Astra Honda Motor (AHM), the joint venture company, currently produces 2 million motorcycles from the existing two plants, located in Sunter and Pegangsaan, both in Jakarta.

AHM president director Minomaru Yamashita said on Wednesday that Honda was enhancing its production capacity by adding a new plant as the market was expected to grow even more this year.

"When the new plant is running at full capacity, Indonesia will replace India as the biggest Honda motorcycle producer in the world," he was quoted as saying by Antara during a ground-breaking ceremony.

India currently produces about 2.3 million motorcycles annually, almost half of the Indian market of 5.5 million units this year. The biggest market in the world, meanwhile, is China with a market size of 14 million units this year.

The motorcycle market in Indonesia reached 3.3 million units in 2003, a 22 percent jump from 2002.

The local market is expected to grow even more in 2004 to about 4 million units, according to the Ministry of Industry and Trade.

Director general of metal, machine, electronics and miscellaneous industries at the ministry, Soebagyo, said in his speech: "The decision (to invest in Indonesia) is a sign that investors trust Indonesia as a place where they can expand their businesses."

He was hopeful that with the new Honda investment, Indonesia could become a key base for world motorcycle production.

The new plant is expected to directly provide new 4,000 jobs and indirectly create more jobs in some 150 local component manufacturers and suppliers.

Meanwhile, AHM marketing director Johannes Hermawan said that Honda production here would continue to be focused on the domestic rather than the export as it would took time before the firm could fully adopt the Euro II exhaust gas standard required in some export destination countries.

In 1998, motorcycle sales in Indonesia dropped to 492,626 units from 1.85 million in 1997 as the country felt the pinch of its worst-ever economic crisis. Sales started to recover in 1999 with 587,402 units sold that year. Sales further increased to 979,000 motorcycles in 2000, despite the entry of several Chinese brands into the domestic market.

Sales eventually moved closer to the pre-crisis level by reaching 1.64 million units in 2001, before soaring to 2.29 million units in 2002. The availability of cheap bank loans, thanks to the lower interest rate environment, contributed to the strong sales.

Prior to the monetary crisis the local market was dominated by Japanese brands Honda, Yamaha, Suzuki and Kawasaki, and Italian brand Piaggio Vespa. In the late 1990s, cheaper Chinese motorcycles started to flood the country.

Jakarta Bomb Unlikely To Faze Indonesia Mkts Long-Term

By Tom Wright
Of DOW JONES NEWSWIRES

JAKARTA (Dow Jones)--A deadly bomb blast in Jakarta Thursday sparked concerns that Islamic terrorists remain at large and a threat to foreign interests in the world's most populous Muslim country.

But the huge explosion outside the Australian Embassy likely won't hurt financial markets here in the long term as foreign investors have become inured to such attacks, analysts said. The third high-profile terrorist attack in Indonesia in less than two years also isn't expected to affect the close runoff race for president here later this month.

The car bombing, two days before the third anniversary of the attacks on the World Trade Center and the Pentagon, killed at least seven people and injured about 100 - although the bombers failed to kill any of the Westerners they were presumably targeting. The Jakarta bombing bears the hallmarks of other bloody attacks carried out by Islamic militants, including the October 2002 Bali nightclub bombings and a blast last year at Jakarta's J.W. Marriott hotel, Indonesian police said.

Thursday's attack is likely to add to fears that Islamic terrorists are still capable of targeting foreigners in Indonesia, despite widespread arrests and recent convictions of scores of militants in connection with the Bali and Marriott attacks.

Stocks fell as much as 4% on news of the midmorning blast, but rebounded to close down just 0.8% at 782.650 points on the Jakarta Stock Exchange Composite index. The rupiah fell 1.2% against the dollar after the attack but also recouped most of its declines. The dollar rose as high as 9,405 rupiah but receded to IDR9,330 at the close, up from Wednesday's IDR9,290.

As the day's resilience shows, markets are unlikely to remain under pressure long as foreign investors have learned to live with such attacks - similar to the situation in London in the 1980s and 1990s during a wave of bombings by the Irish Republican Army - said Manu Bhaskaran, a Singapore-based analyst with business consultancy Centennial Group.

"I think the baseline scenario for anyone who's thought about investing in Indonesia is there will be these kind of attacks from time to time," he said.

May Help Howard At Polls

The failure of Thursday's bombing to kill any Westerners - the bomb exploded before the car could reach the Embassy gates - might indicate that militants, while still a danger, are finding it harder to stage effective attacks given increased security and the arrest of key Islamic militants.

Jemaah Islamiyah, a regional network linked to al-Qaida and blamed for the Bali and Marriott attacks, has lost much of its operational effectiveness since the arrests of many of its key leaders, analysts say.

In recent weeks, several Western embassies, including those of the U.S. and Australia, have warned their citizens about possible attacks by Muslim militants. The U.S. mission in Jakarta last week renewed the warning, urging Americans to stay away from the Kuningan district in which the blast occurred.

In response to the blast and ahead of the Sept. 11 anniversary, the Philippines put its troops on full alert Thursday. "The military is prepared to deter similar attacks nationwide," said military spokesman Lt. Col. Daniel Lucero in Manila. The Philippines has been battling a slew of armed groups, including Marxist and Muslim separatist rebels and the al-Qaida-linked Abu Sayyaf extremist group, and is considered a likely terror target in Southeast Asia.

Analysts played down the connection between the bomb and Indonesia's Sept. 20 presidential election, in which President Megawati Sukarnoputri faces popular former general Susilo Bambang Yudhoyono.

"The target is clear - it's not Indonesia and its economy as a whole," said Anton Gunawan, an economist with Citibank in Jakarta. "It's against U.S. and Australian interests in Indonesia."

The bombing is unlikely to have a significant effect on the election as neither candidate has made cracking down on terrorism a major platform of their political campaigning, he added.

If anything the bombing could have a greater political impact in Australia, where Prime Minister John Howard's conservative coalition is running neck-and-neck with the center-left Labor party - although the government's momentum in opinion polls is building.

The bombing could enhance the Howard government's chances of clinching another three-year term, said international affairs analyst Keith Suter. Howard has taken a strong stance against terrorism and sent troops to join the U.S.-led war in Iraq.

But Clive Williams, director of terrorism studies at the Australian National University, said that although the issue of national security has tended to favor incumbents in the past, he doubts it will make much difference in the knife-edge Australia election.

May Delay Privatization

Thursday's attack, if not decisive for politics or Jakarta's financial markets, certainly won't help Indonesia's attempt to breath life into its economy, which has been underperforming compared to other Asian countries due to the slow pace of economic reform and a failure to attract back foreign investment since the 1997-98 Asian financial crisis.

Indonesia is considering delaying the sale of state-owned assets this year, including a majority stake in PT Bank Permata, due to the likely negative market reaction from the bombing, said State Enterprises Minister Laksamana Sukardi.

Still, an increasing number of foreign investors with money in Indonesian assets or factories come from other Asian nations such as South Korea and Taiwan, and are unlikely to be deterred by such attacks, Gunawan said. Unlike large foreign hedge funds, which pulled out of Indonesia after the regional crisis, Asian investors are more likely to stay put, he added.

Foreign investment is likely to recover over the next few years given Indonesia's huge potential as a place to sell consumer products, said Bhaskaran of the Centennial Group.

Key to Indonesia's success will be the government's efforts after this month's election to reduce corruption and push through other economic changes aimed at attracting back foreigners, said Sin Beng Ong, an economist at J.P. Morgan Chase & Co. in Singapore.

The Australian Embassy attack hasn't changed J.P. Morgan's view on Indonesian markets, Ong said. The bank expects the dollar will rise about 4% by the end of the year toward IDR9,700 due mainly to higher government foreign debt payments, which will eat away at Indonesia's balance-of-payments surplus.

-By Tom Wright, Dow Jones Newswires; 6221-3983-1277; tom.wright@dowjones.com
(Veronica Brooks in Canberra contributed to this item.)
-Edited by William Mallard

Kamis, 09/09/2004 16:47 WIB
Shu Uemura hadir di Indonesia
oleh : Rahmayulis Saleh

JAKARTA (Bisnis): Perusahaan kosmetika dari Jepang Shu Uemura kembali hadir di Indonesia dengan membuka boutique counter terbesar di dunia, dan menginvestasikan dana sedikit Rp2 miliar untuk toko barunya yang terletak di Sogo, Plaza Senayan, Jakarta, dan mentargetkan penjualan produknya dalam tahun ini sampai Rp1 miliar.

Setelah tiga tahun menghilang dari pasar Indonesia, kini produk kecantikan Shu Uemura bisa dibeli oleh pelanggannya yang loyal, yang selama ini memburunya ke Singapura, Malaysia dan Hong Kong.

Menurut Business Development Manager Shu Uemura Indonesia Sendy R. Soeriaatmadja, absennya kosmetika itu di Indonesia karena Shu Uemura Inc. beraliansi dengan perusahaan kosmetika L'Oreal Group.

"Untuk membuat strategi pasar dan pembenahan, kami menghilang dulu sementara. Setelah merasa mantap baru sekarang dibuka lagi dan langsung menjadi yang terbesar tempatnya di seluruh dunia di antara cabang Shu Uemura," kata Sendy kemarin malam di sela-sela peresmian boutiqe counter-nya.

Sendy menuturkan disebut boutique counter karena konsepnya toko di dalam toko dan yang pertama di dunia. Luasnya mencapai 92 meter persegi, atau dua kali lipat dari luar counter Shu Uemura di negara lain.

Dana yang diinvestasikan untuk pembukan tempat baru ini, katanya, mencapai Rp2 miliar. "Diharapkan dalam waktu tiga tahun mencapai BEP. Kami yakin karena pelanggan produk Sue Uemura di Indonesia mencapai 1.500 orang, dan cukup loyal," ujarnya.

Dia mentargetkan penjualan produknya dalam tahun ini mencapai Rp1 miliar. Sendy yakin bisa mencapai angka penjualan tersebut karena ada beberapa hal kelebihan dari boutique counter-nya itu.

Pertama, katanya, produk yang dipajang di dalamnya hanya merek Shu Uemura. Kedua, new look style. Orang Indonesia, tambahnya, suka pada sesuatu yang baru. "Karena kami tampil dengan sesuatu yang baru, tentu penjualan juga akan meningkat."

Indonesia sees Pakistan as major emerging market

LAHORE: Anwar Santoso, Indonesian ambassador to Pakistan, said on Thursday that his country’s corporate sector is keen to expand trade ties with Pakistan which is seen as a big emerging market in South Asia.

Mr Santoso stated this while addressing a seminar on ‘Enhancing Economic and Trade Corporation between Indonesia and Pakistan,’ which was organised by the Lahore Chamber of Commerce and Industry (LCCI) in collaboration with the embassy of Indonesia.

He said better economic management through privatisation and a strong and comprehensive regulatory infrastructure have paid big dividends to Pakistanis and added changes in management, technology and transparency at the Karachi Stock Exchange are impressive.

“The Securities and Exchange Commission of Pakistan is becoming more active in safeguarding interests of minority shareholders.”

About Indonesia’s trade with Pakistan, Mr Santoso said total trade between the two countries in 2003 stood at around $331 million showing an increase of 6.34 percent compared to year 2002.

Pakistan imports betel nuts, organic chemicals, tea, paperboard, paper, viscose fibre from Indonesia while major exports of Pakistan to Indonesia are cotton, textile yarn, fabrics, vegetables, fruit, leather and leather products.

“Indonesia is one of the most attractive destinations for foreign investment due to its liberal investment policies and regulatory frameworks,” he said and added that Indonesia would continue to provide an attractive business environment for foreign companies to invest in all sectors.

“We have liberal trade policy now with attractive features to lure the foreign investors to invest. It is within this context that President Megawati declared 2003 as the ‘national investment year’ and issued a Presidential decree on one roof service system in order to simplify the investment procedure and give better treatment for investor.”

Rakhmat Badaruddin, chairman Indonesian Chamber of Commerce and Industry, in his speech spoke about opportunities available for Pakistani businessmen in Indonesia. Indonesia as being the largest Muslim population country in the world, jointly with other nations where Muslim populations are in majority, potentially can create strong sustainable economic activities in the world, he added.

He said global institutions and organization such as Organization of the Islamic Countries (OIC), the Islamic Development Bank (IDB), the Asian Development Bank (ADB) or the World Bank could act as catalysts and in realizing a more focused economic cooperation among Muslim countries.

Mr Badaruddin said abundant natural resources and strategic location of Indonesia, coupled other strengths of its close allies, can become a competitive advantage and should be able to position them in a respectable place in the global economic network.

He said Indonesia and Pakistan could embark its plan to create a strong economic cooperation through the sustained excellent diplomatic relationship platform using the presently accepted global economy and trade parameters as both countries have a common base, he added. —Staff Report

http://www.dailytimes.com.pk/default.asp?page=story_10-9-2004_pg5_5

Indonesia Shares End Up; Sentiment Recovers After Bombing

JAKARTA (Dow Jones)--Indonesian shares ended higher Friday on hopes that the aftereffects of Thursday's deadly bomb attack in the capital won't undermine the economy, dealers said.

Dealers said investors also bought back shares on hopes that the attack that killed nine and injured 173 won't have an effect on the presidential runoff on Sept. 20.

Analysts said Indonesian markets have become relatively immune to such attacks since the Bali bombing in 2002, and they expect that any weakness would be temporary, with sentiment recovering if the presidential elections proceed peacefully.

"We are still positive on the Indonesian markets," said Laksono Widodo, an analyst with Macquarie Indonesia.

The main index Thursday fell 4% shortly after the blast, but recovered to close 0.8% lower.

The Jakarta Stock Exchange's main index ended up 15.125 points Friday, or 1.9%, to hit a fresh four-month high of 797.775.

Gainers led decliners 116 to 24, with 54 stocks unchanged.

Bank Danamon led the gainers, jumping IDR175, or 5.1%, to IDR3,600 on a rebound and expectations of higher interest income this year.

Bellwether Telekomunikasi Indonesia rose IDR100, or 1.3%, to IDR8,050 on a rebound after falling 2.5% Thursday.

Cigarette maker Gudang Garam gained IDR300, or 2.3%, to IDR13,250 and its rival Hanjaya Mandala Sampoerna rose IDR250, or 4.7%, to IDR5,600, both on a rebound.

Dealers said they expect the market to trade higher Tuesday on a further rebound. Indonesian markets will be closed Monday for holiday

i think the market is pretty immune from sporadic terror attacks, as long as it doesn't happen every month. I think investors have imputed the heightened security risk associated with investing in Indonesia, that's why the stock market did not react too negatively to the incident. And today's rally was a result of profit taking by foreign investors from the initial dip and expectation that things will return to normal...

One of the biggest problem I see in trying to set up or even invest in Indonesia is the amount of beurecratic red tape one must go true. Then of course there is the corruption, which makes the cost of setting up a business too high for normal folks. Who ever become the next president must tackle this problem before FDI can come into the country. All the investors I've talked to said that they aren't fazed about terrorisms, however, they are fazed by the high cost of doing business and the amount of buerecracy one must go through to do business there.

ARA, you are absolutely right, My boss is also concerning in the red-tape Buerecracy problem. I hope the next president will do something with this, really.

cheers

Err.. what is "red-tape buerecracy"?

Pretty sweet.

http://img89.exs.cx/img89/2009/jsx.jpg

Red-tape business and how it's hurting the Indonesian economy greatly



Doing Business In 2005: East Asian Nations Struggle to Reduce Red Tape for Business, Miss Large Growth Opportunities

WASHINGTON, September 8, 2004 – Six Asia-Pacific economies – New Zealand, Australia, Singapore, Japan, Hong Kong, and Thailand – rank among the top 20 in the world on ease of doing business, according to a new report from the World Bank Group.

However, East Asian nations still impose the highest costs on enforcing business contracts of any region in the world, on average 45 percent of income per capita, the report finds. They also have among the highest costs of firing workers – on average it takes 79 weeks of wages in severance, penalties, and notifications to dismiss a worker.

Doing Business in 2005: Removing Obstacles to Growth, a report cosponsored by the World Bank and International Finance Corporation, the private sector lending arm of the World Bank Group, finds that investment climate reforms, while often simple, can help create job opportunities for women and young people, encourage businesses to move into the formal economy, and promote economic growth.

The report, however, which benchmarks regulatory performance and reforms in 145 nations, finds that poor nations, through administrative procedures, still make ittwo times harder than rich nations for entrepreneurs to start, operate, or close a business, and businesses in poor nations have less than half the property rights protections available to businesses in rich countries.

On average, it takes a business six procedures, 8 percent of income per capita, and 27 days to get started in high-income OECD countries; in East Asian countries, the same process takes nine procedures, 60 percent of income per capita, and 61 days. Among the worst performers in time of business registration were Cambodia (94 days), Indonesia (151 days), and Lao PDR (198 days).

Borrowers and lenders inHong Kong (China) and Singapore enjoy all ten main types of legal rights that expand access to credit, while those in China and Vietnam have fewer than half as many legal rights.

Overall, rich countries undertook three times as many investment climate reforms as poor countries last year. European nations were especially active in enacting reforms. The top 10 reformers for the most recent survey year were Slovakia, Colombia, Belgium, Finland, India, Lithuania, Norway, Poland, Portugal, and Spain.

Other findings related to East Asian economies:

While China continues to improve its regulatory climate for businesses, too few other East Asian economies are following suit, and several continue to rank among the world’s least friendly for business.

· Of the 58 countries that reformed business regulation or strengthened the protection of property rights in the last year, only six were in East Asia: Korea, Laos, Mongolia, Philippines, Taiwan, and Vietnam.

· Eight economies in the region ranked in the top quartile of 145 countries on the ease of doing business: New Zealand, Australia, Singapore, Japan, Hong Kong (China), Thailand, Taiwan (China), and Malaysia. However, four countries ranked in the bottom quartile – Lao PDR, Cambodia, Indonesia, and Vietnam.

· Hong Kong (China), Malaysia, and Singapore have the most flexible employment regulations in the world, and Thailand makes the top 10 list on the time to register property.

· Among countries enacting reforms, Mongolia improved the process for starting a new business, cutting the time and cost by more than one-third and making the list of top 10 reformers in entry regulation.

· Hong Kong introduced regulations to allow more types of credit information to be available, more than doubling the number of borrowers covered by the credit bureau.

· Taiwan increased the flexibility of working hours, making it easier for businesses to expand production.

· The Philippines introduced summary proceedings for debt enforcement, cutting four months off time to enforce contracts.

· Lao PDR sped debt enforcement by moving it to lower-level district courts.

“Poor countries that desperately need new enterprises and jobs risk falling even further behind rich ones who are simplifying regulation and making their investment climates more business friendly,” said Michael Klein, World Bank/IFC Vice President for Private Sector Development and IFC Chief Economist.

Doing Business in 2005 updates the work of last year’s report on five sets of business environment indicators: starting a business, hiring and firing workers, enforcing contracts, getting credit, and closing a business; it expands the research to 145 countries and adds two new indicators, registering property and protecting investors. Since last year, 13 governments have asked for their countries to be included in the Doing Business analysis.

“This year, Doing Business gives policymakers an even more powerful tool for measuring regulatory performance in comparison to other countries, learning from best practices globally, and prioritizing reforms,” said Simeon Djankov, an author of the report.

For example, this year’s report catalogs wide variances in hiring and severance costs across countries and shows that high severance costs can discourage job creation. The report also shows that poor regulation of bankruptcy can cause business loans to dry up: in 50 countries, creditors can expect to recover less than 20 cents on the dollar when a business goes bankrupt.

The main research findings of Doing Business in 2005:

· Businesses in poor countries face larger regulatory burdens than those in rich countries. Poor countries impose higher costs on businesses to fire a worker, enforce contracts, or file for registration; they impose more delays in going through insolvency procedures, registering property, and starting a business; and they afford fewer protections of legal rights for borrowers and lenders, contract enforcement, and disclosure requirements. In administrative costs alone, there is a threefold difference between poor and rich nations. The number of administrative procedures and the delays associated with them are twice as high in poor countries.

· The payoffs from reform appear to be large. The report estimates that an improvement from the bottom to the top quartile of countries in the ease of doing business is associated with an additional 2.2 percentage points in annual economic growth. An indication of the payoff comes from Turkey and France, each of which saw new business registration increase by 18 percent after the governments reduced the time and cost of starting a business last year. Slovakia’s reform of collateral regulation helped increase the flow of bank loans to the private sector by 10 percent. The payoff comes because businesses waste less time and money on unnecessary regulation and devote more resources to producing and marketing their goods and because governments spend less on ineffective regulation and more on social services.

· Heavy regulation and weak property rights exclude the poor – especially women and younger people – from doing business. The report finds that weak property rights and heavy business regulation conspire to exclude the poor from joining the formal economy. “Heavy regulation not only fails to protect women, young people, and the poor – those it was intended to serve – but often harms them,” said Caralee McLiesh, an author of the report. Doing Business shows that countries with simpler regulations can provide better social protections and a better economic climate for business people, investors, and the general public. The report builds on noted economist Hernando de Soto’s work, showing that while it is critical to encourage registration of assets, it is as important – and harder – to stop them from slipping back into the informal sector.

Doing Business in 2005 finds that reform took place last year mainly in countries that faced competition and had incentives to measure regulatory burdens. In the enlarged European Union, accession countries reformed in anticipation of the new competitive pressures on their businesses; existing members reformed to maintain their advantage against the lower-wage producers from accession countries.

In developing countries, performance targets set by the International Development Association and donor country aid programs spurred poor countries to examine regulatory obstacles and propose reforms. Most reforms focused on simplifying business entry and improving credit information systems. African countries reformed the least of all regions and had the most regulatory obstacles to doing business, followed by Latin American countries.

The top 20 economies in terms of ease of doing business are New Zealand, United States, Singapore, Hong Kong/China, Australia, Norway, United Kingdom, Canada, Sweden, Japan, Switzerland, Denmark, Netherlands, Finland, Ireland, Belgium, Lithuania, Slovakia, Botswana, and Thailand.

The Doing Business project is the product of more than 3,000 local experts – business consultants, lawyers, accountants, and government officials – and leading academics, who provided methodological support and review. The data, methodology, and names of contributors are publicly available online.

The full report is available online to journalists at the World Bank’s Media Briefing Center http://media.worldbank.org/

Investment climate indicators and analysis, along with information on ordering the report, are available on the Doing Business website: http://rru.worldbank.org/doingbusiness

More information here:

http://rru.worldbank.org/DoingBusiness/ExploreEconomies/BusinessClimateSnapshot.aspx?economyid=90

It falls behind the regional average in everything except protecting investors. What was quite stunning to me was the average of 151 days to start a business, compared to 52 as a regional average and 25 for an OECD average.

yes, cutting the red tape, reducing corruption and legal uncertainty should be TOP PRIORITY (probably just after maintaining SECURITY) for the new government.

PEMBAHASAN RUU FTZ BATAM TERANCAM "DEAD LOCK"

Jakarta, Minggu

Pembahasan Rancangan Undang-Undang (RUU) kawasan perdagangan bebas (FTZ) Batam menjadi Undang-Undang(UU) terancam mengalami jalan buntu (dead Lock) akibat tidak adanya kesepakatan antara DPR dan Pemerintah.

"Kalau memang DPR dan Pemerintah tidak ada kesepakatan soal RUU kawasan perdagangan bebas menjadi UU maka bisa saja menemui jalan buntu," kata Sekjen Depperindag Hariyanto Ekowaluyo, di Jakarta, Minggu (12/9).

DPR dan Pemerintah dalam beberapa kali rapat bersama gagal mencapai kesepakatan soal batasan kawasan perdagangan bebas di Kepulauan Batam.

Hal ini disebabkan antara DPR dan Pemerintah memiliki pandangan berbeda soal cakupan kawasan perdagangan bebas, dimana DPR menghendaki agar seluruh Kepulauan Batam merupakan kawasan perdagangan bebas. Sebaliknya, Pemerintah menghendaki kawasan perdagangan bebas di Kepulauan Batam hanya beberapa wilayah saja jadi tidak seluruh Batam menjadi kawasan perdagangan bebas.

Akibat adanya perbedaan pandangan soal FTZ di Batam tersebut maka dalam beberapa kali rapat kerja antara DPR dan Pemerintah mengalami jalan buntu. Terakhir, awal pekan lalu, Komisi V DPR-RI melakukan rapat bersama dengan pemerintah yang terdiri atas Menperindag, Mendagri, serta Menkeh dan HAM membahas soal FTZ Batam.

Menurut Hariyanto, seandainya antara DPR dan Pemerintah sama-sama mempertahankan pendiriannya sehingga tidak memperoleh kesepakatan maka RUU tersebut tidak bisa diajukan lagi dalam persidangan saat itu. "Jadi bisa saja mengalami dead lock kalau memang tidak ada kesepakatan bersama dan itu diatur dalam UUD 1945," katanya.

Sesuai UUD 1945 Pasal 20 (2) setiap RUU dibahas oleh DPR dan Presiden untuk mendapatkan persetujuan bersama. Dalam ayat 3 dijelaskan jika RUU itu tidak mendapat persetujuan bersama, RUU itu tidak boleh diajukan lagi dalam persidangan DPR masa itu.

Ditanya mengenai seberapa besar kemungkinan RUU menjadi UU soal FTZ Batam tersebut, Hariyanto mengakui dirinya tidak dapat memastikan. (Ant/Edj)

I know that Indonesian ministers are concerning that if Batam become fully FTZ area. the prospect of illegal smuggling goods can be much easily grow as they are now.

Like cars, sugar, etc.

Maybe we can see the Batam FTZ discussion undead-lock after the new cabinet enter the office..that if Megawati loss...

cheers

yeah.. hope that batam can become an FTZ in the future..

Selasa, 14 September 2004, 02:00 WIB
Tahun 2010 Utang Indonesia Lunas

Laporan -

TANAH DATAR, investorindonesia.com

Presiden RI Megawati Soekarnoputri telah berjanji bahwa kemungkinannya pada tahun 2010 utang luar negeri Indonesia sudah lunas semua dan tahun 2014 menjadi negara donatur.

“Kemungkinan itu, menunjukkan apa yang sudah dijalankan pemerintah saat ini sudah tepat,” ujar suami Presiden Megawati H Taufik Kiemas pada saat berkunjung di kampung halamannya Nagari Sabu, Kec Batipuh, KabTanah Datar, Sumbar, Minggu.

Menurut dia, saat ini utang luar negeri yang dibayar Indonesia mencapai Rp 145 triliun tiap tahun dan kalau tidak membayar utang maka Indonesia bisa melakukan pembangunan yang luar biasa.

Selain itu, kalau pembayaran utang bisa diperpanjang (rescheluding) dan hanya membayar Rp 100 miliar, maka akan ada ada kelebihan Rp 50 triliun yang jika dibagi rata Rp 1 triliun untuk tiap provinsi, maka pembangunan juga makin meningkat.

Meski Indonesia masih berutang, namun Taufik menilai pemerintah berhasil dalam penarik pendapatan pajak. "Penghasilan pajak dalam tiga tahun terakhir jauh lebih besar dari pendapatan pajak selama 38 tahun sebelumnya," katanya.

Bahkan, tambah dia, sekarang 70% kegiatan pembangunan sudah dibiayai bangsa sendiri dari pendapatan pajak.

Pilihan tepat pemerintah lainnya, menurut dia, dengan menempatkan Departemen Agama sebagai penerima dana terbesar ke empat dari APBN atau mencapai Rp6,9 triliun, dibawah Depdiknas (Rp21 triliun), Depkimpraswil (Rp12 triliun) dan Depkes .

“APBN untuk Departemen Agama saat ini meningkat 10 kali lipat dari tahun 1998. Ini pilihan tepat,” katanya.

Pada bagian lain, Taufik Kiemas juga memuji pembangunan di daerah yang meningkat. "Seperti di Sumbar, apa yang dibangun dalam tiga tahun terakhir, mungkin lebih besar dibanding yang dikerjakan selama 30 tahun sebelumnya," ujarnya. (ant)

Indonesian Auto Sales Surge 28.62% in August

JAKARTA, Sept 14 Asia Pulse -

Car sales in Indonesia rose 28.62 per cent year-on-year to 38,651 units in August.
Data at the association of motor vehicle industries (Gaikindo) said month-on-month cars sales in August rose 0.44 per cent.

Sales in the first six months of this year rose significantly from the same period last year, the newspaper Bisnis Indonesia reported.

Automotive observer Soehari Sargo, however, predicted that the trend will not continue in the second semester of this year.

Most buyers will choose to wait and see until new models are launched expected in October and the results of the presidential election on Sept. 20, Sargo said.

Meanwhile car makers will be more careful not produce cars in large scale.

Sargo, however, said he was confident that the production target of 420,000 units this year will be achieved.

(ANTARA)

Indonesia Undaunted on Tourist Earnings Despite Jakarta Bomb

JAKARTA Sept 14 Asia Pulse - The government said it is confident that earning from the tourism sector will exceed the previously set target of US$5 billion this year despite last week's bombing in front of the Australian embassy in Jakarta.
Tourism and Culture Minister I Gde Ardika said tourism earning rose 35 per cent year-on-year in the first half of this year .

Ardika said based on record in the first half of this year the number of foreign visitors to the country will reach 5.2 million exceeding the previously set target of 5.1 million for this year.

In the first half of this year, earning from the tourism sector was estimated to reach US$2.3 billion and the number of foreign visitors was 2.6 million. .

(ANTARA) Z

Jakarta stocks end at 20-week high on election

JAKARTA, Sept 14 (Reuters) - Jakarta stocks extended gains on Tuesday, with the key index breaking the psychological 800 points level to end at a 20-week high, as investors bet on a smooth conclusion of the second round presidential election.
The gains came despite a bomb attack on the Australian embassy on Thursday which killed nine people, and bomb threats on Tuesday that resulted in the evacuation of at least two Jakarta office buildings. No bombs were found when the buildings were searched.

Investors appear to have shrugged off the embassy bombing, blamed on an Islamic militant group.

Dealers said the market was bullish ahead of the Sept. 20 presidential vote and the end of political uncertainty, and some predicted shares could reach new record highs in the near term.

"Focus is clearly in big caps as foreign investors are building up a position ahead of the presidential election," said Roy Santoso, head of sales at Kresna Securities.

The composite index rose 11.24 points or 1.41 percent to end at 809.02 points, its highest since April 28, in active trading as 1.7 trillion rupiah ($187 million) worth of shares changed hands. It ended at its peak on April 27 at 818.16 points.

Gainers led losers 62 to 57 while 74 issues were unchanged.

"Foreign brokers bought stocks while locals took profit. The outlook is bullish. The rupiah is stronger too," said a local dealer. He said the index may reach 830 points next week.

The rupiah passed 9,100 to the dollar for the first time since early August. By 0926 GMT, it was quoted at 9,105/9,115 against 9,175/9,185 in early trade.

Tuesday marks the official start of a three-day official campaigning period for Indonesia's presidential run-off where incumbent President Megawati Sukarnoputri faces ex-general Susilo Bambang Yudhoyono.

Investors are betting the process would run peacefully, as did the parliamentary election and the first round presidential vote earlier, and do not link the embassy attack with the election, traders and analysts said.

Stocks dipped initially after the embassy bombing but regained most of the lost ground by the close of the day's trading.

Most blue chips rose. Among the biggest gainers were the country's third largest cigarette producer PT Hanjaya Mandala Sampoerna Tbk , which jumped 4.46 percent to end at 5,850 rupiah.

Indonesia's fifth-largest bank PT Bank Danamon Tbk jumped 5.56 percent to 3,800 rupiah. ($1=9,105 rupiah)

Rabu, 15 September 2004, 15:17 WIB
Butuh Rp613 Triliun Bangun Infrastruktur Lima Tahun ke Depan

Laporan -

JAKARTA, investorindonesia.com

Indonesia untuk jangka waktu lima tahun mendatang (2005-2009) membutuhkan biaya Rp613 triliun (US$ 72 miliar) untuk membangun dan memelihara fasilitas infrastruktur.

"Biaya sebesar itu berdasarkan asumsi pertumbuhan ekonomi Indonesia dalam jangka waktu lima tahun medatang rata-rata enam persen per tahun," kata Deputi Infrastruktur Badan Perencana Pembangunan Nasional (Bappenas), Suyono Dikun di Jakarta, Rabu.

Suyono mengatakan hal itu dalam workshop untuk mensosialisasikan hasil pertemuan menteri-menteri infrastruktur negara-negara kawasan Asia Pasifik beberapa waktu lalu di Bali.

Dana investasi sebesar itu, menurut Suyono, diperuntukkan bagi pembangunan jaringan jalan nasional sepanjang 93.700 kilometer, membangun pembangkit listrik 21.900 Mega Watt, memasang 11 juta sambungan telephon.

Di samping itu, pemerintah juga masih harus mencukupi permintaan 18,7 juta pengguna telepon selular, pengadaan air minum bagi 30,5 juta penduduk, dan menyediakan sistem sanitasi bagi 46,9 juta penduduk.

Biaya pembangunan infrastruktur masih lebih tinggi lagi apabila dihitung juga untuk transportasi, perumahan, energi, dan irigasi. Apabila seluruhnya harus dihitung maka dibutuhkan biaya sekitar 189,4 miliar dolar AS atau setara Rp1.610 triliun berdasarkan PDB tahun 2002.

Pemerintah sendiri hanya mampu menyediakan US$ 40,8 miliar atau 2,33% dari PDB, sehingga masih terdapat gap senilai US$ 31,2 miliar yang harus diisi oleh investasi dari sektor swasta dan pola-pola pendanaan lainnya.

Dengan demikian dibutuhkan investasi di bidang infrastruktur rata-rata US$ 6 miliar per tahun dalam jangka waktu lima tahun mendatang.

Berkaitan hal itu menurut Suyono, dibutuhkan kebijakan yang lebih menyeluruh untuk melibatkan sektor swasta dalam mengambil peran utama dalam mendanai sektor infrastruktur.

Proyek-proyek infrastruktur membutuhkan periode jangka panjang untuk konstruksi, investasi skala besar, periode pembayaran jangka panjang, dan masalah tarif.

”Investasi di sektor tersebut membutuhkan sponsor proyek, sebagai kunci keberhasilan yang mana dibutuhkan pengusaha yang bersedia mengambil risiko untuk memulai bisnis infrastruktur,” ujarnya. (ant)

Bank Indonesia sees 2004 avrg rph at 8,800/dlr

JAKARTA, Sept 15 (Reuters) - Indonesia's rupiah is expected to average 8,800 per U.S. dollar this year, stronger than 8,900 proposed in the revised 2004 budget, due partly to a stronger economy, the central bank's senior deputy governor said on Wednesday.
The remarks came as the rupiah strengthened to around 9,070 against the dollar on Wednesday, rebounding from around 9,400, which was more than a two-month low, after a deadly bomb blast in Jakarta last Thursday.

"The rupiah's average exchange rate is forecast at 8,800," Miranda Goeltom said in a statement distributed during an economics seminar.

Despite a recent firmer tone, the rupiah is down 7.3 percent against the dollar since the year began due in part to political uncertainty during a long election cycle.

However, the rupiah and the stock market have made strong gains in recent days -- despite the bomb blast that killed nine people and wounded 182 last week -- in anticipation that Monday's presidential election decider would run smoothly.

Dealers said the central bank's remarks signalled further gains in the rupiah. The rupiah's average daily closing bid so far this year was around 8,875.

The central bank previously forecast the rupiah would range 8,200-8,700 this year. The original 2004 budget had expected the rupiah to average 8,600 this year.

"The remarks show that the bank is optimistic that the rupiah will further strengthen to break the current 9,000 level. It may be seen as urging more dollar sales as it comes amid a bullish tone on the rupiah," a bank dealer said.

Goeltom said she expected Indonesia's economic growth to be more broad based in 2004 than it was in 2003. The government has forecast the economy will grow 4.8 percent between 2004 and 2003 after expanding 4.1 percent between 2003 and 2002.

Ignore the story. It's an old story. :bash:

Which story ARA? :?


cheers

CENTRAL BANK WATCH: Bank Indonesia Faces Policy Dilemma

By I Made Sentana
A Dow Jones Newswires Column

JAKARTA (Dow Jones)--Bank Indonesia is facing an interest rate dilemma.

Rising global rates, growing inflationary pressure at home and the rupiah's 8% depreciation since the start of 2004 are adding to pressure for higher rates, economists said.

But the central bank has so far resisted calls for a hike, arguing it needs to keep rates low to help the government achieve a 4.8% economic growth target this year.

"A sharp rate hike will have a (negative) impact on the economy, including our stock market," Bank Indonesia's deputy Governor Aslim Tadjuddin said defending the central banks stance. "The current interest level is satisfactory. I don't see any urgency to raise it further."

The weighted average rate of the widely watched one-month Sertifikat Bank Indonesia or SBI note is currently at 7.39%. The Indonesian financial markets looks at the one-month SBI as the benchmark although Bank Indonesia's official policy rate is the overnight Fasilitas Bank Indonesia, or FASBI, now at 7%.

Evidence is growing, however, that investors don't see it that way. Many economists think the rupiah could fall further this year as funds move their money out of Indonesian assets to take advantage of climbing rates elsewhere.

The U.S. Federal Reserve is widely expected to increase its federal funds rate again next week, which is further pressuring Indonesia to act, economists said.

"Bank Indonesia's current monetary policy is not sustainable," said Sin Beng Ong, an economist with J.P. Morgan Chase Bank.

The dollar could rise to 9,700 rupiah by the end of 2004, J.P. Morgan forecasts, up sharply from IDR9,115 in Thursday morning trading.

Currency weakness would increase Indonesia's foreign debt load, and add to inflationary pressure which, although still manageable, has been growing this year.

So why is the central bank so reluctant to act?

Apart from the growth argument, many economists think that political pressures have something to do with it.

Indonesians will vote Monday in the country's first ever direct presidential elections, and rate hikes never go down well in an election year.

Rising unemployment and a stagnant business environment are major reasons voters appear to be turning their backs on President Megawati Sukarnoputri. The latest polls show her losing next week by a wide margin to retired general Susilo Bambang Yudhoyono.

Will Have To Raise Rate Sooner Or Later

The conclusion of the elections, which began with a first-round of voting in July, could help lift investor sentiment, some economists said.

Election uncertainty has helped add to pressure on the rupiah, but this could lift next week, and take some pressure off the central bank in the short term.

"Bank Indonesia can say that these are transitory factors, and there's no real need to shift monetary policy too much in this environment," said Song Seng Wun, an economist with G.K. Goh in Singapore.

Still, most economists say the central bank will sooner or later have to raise rates to keep pace with the global tightening cycle which is underway.

The one-month SBI rate fell to an all-time low of 7.32% in May after more than two years of soft monetary policy. Rates climbed skyward after the 1997-98 Asian crisis to defend the rupiah, but began falling in 2002 once the currency and inflationary pressures were contained.

Signs that inflation could be returning have pushed the central bank to allow rates to climb up moderately since the May low. The benchmark one-month Sertifikat Bank Indonesia note is now yielding 7.39% from 7.32% in May.

But with consumer prices growing 6.7% in August and the government revising up its 2004 inflation target to 7% from 6.5%, economists said that such rate hikes won't likely be enough to keep the real interest rate attractive to investors and support the rupiah.

Higher rates are also needed to absorb about IDR10-IDR20 trillion in excess liquidity which daily circulates through Indonesia's monetary system, adding to inflationary pressure. Bank lending to companies remains low, leaving spare cash sloshing around, and adding to speculative pressure on the rupiah.

"If you look at the amount of the excess liquidity, the pressure to increase interest rates is strong enough," said Juniman, an economist with PT Bank Internasional Indonesia. He expects the one-month SBI rate to rise to 7.5% by the end of the year.

Armed with $34 billion in foreign exchange reserves, Bank Indonesia will likely prefer intervention in the foreign exchange market should the rupiah come under pressure again rather than raising interest rates sharply, Juniman added.

Bank Indonesia's Aslim said the bank will continue to use non-interest rate methods to reduce speculation. These include a regulation implemented in July which forces commercial banks to place a larger amount of their spare cash on deposit with the central bank.

Sources: Dow Jones Newswire

Indonesia sees Sempra gas deal in early October

JAKARTA, Sept 16 (Reuters) - Indonesia expects BP Plc. to sign a final deal to supply liquefied natural gas (LNG) to U.S. firm Sempra Energy in early October, oil and gas watchdog BP Migas said on Thursday.
The LNG will come from BP's Tangguh gas field in Papua province, 3,000 km (1,880 miles) east of Jakarta, which holds 14.4 trillion cubic feet of certified natural gas reserves.

"BP will supply Sempra with 3.7 million tonnes per year for 20 years," BP Migas head of marketing Djoko Harsono told reporters.

"We have agreed on substantive issues but there are small issues that need to be solved. I am optimistic that we will see the signing in the first week of October," he said.

Officials from British oil giant BP could not be reached for comment. The major energy company plans to build two new LNG plants with a combined capacity of around seven million tonnes of LNG per year.

Rachmat Sudibyo, chairman of watchdog BP Migas, said on Thursday the Tangguh LNG complex would cost around $4.7 billion, more than the $3 billion previously estimated, including development of upstream activities and two LNG plants with a capacity of seven million tonnes a year.

"BP plan to build two LNG plants but there is an option to build a third if the market is opened," Sudibyo said.

Last month, BP signed a deal with South Korean utility K-Power that agreed to take 600,000 tonnes per year LNG starting in 2006 for 20 years. K-Power also has the option to buy an extra 200,000 tonnes per year to 2010.

South Korean steel maker POSCO Co. in July inked a $1.9 billion deal with the Tangguh LNG consortium to buy 550,000 tpy over 20 years starting in 2005.

China's CNOOC Group in 2002 signed a final contract to purchase 2.6 million tpy.

Sources: Reuters Business news

Profit taking hits Jakarta shares, outlook good

JAKARTA, Sept 16 (Reuters) - Jakarta stocks edged lower on Thursday as profit taking in some key shares kicked in after recent strong gains, but the positive trend ahead of the Sept. 20 presidential election remains intact, analysts said.
The Jakarta Composite Index finished 0.3 percent lower at 813.06 points in fairly moderate trade estimated at 605.7 billion rupiah ($66.37 million).

The slight correction comes after a four percent rise in the past five trading days despite last week's bomb blast outside the Australian embassy in Jakarta, which killed nine and wounded more than 180.

"If we observe the market, the buying power remains high. However, profit taking hit some shares which had risen sharply in the past few days," said Fendi Susiyanto, an analyst at BNI Securities.

"Basically, this profit taking is needed by the market. The recent rise has been spectacular, and I think the positive trend is still intact," he added.

Banking shares, which gained significantly on Wednesday, were hit by profit taking.

The country's fourth-largest bank, PT Bank Rakyat Indonesia Tbk , fell 2.5 percent to 1,950 rupiah, while number two lender PT Bank Central Asia fell 1.23 percent to 2,000 rupiah.

Indonesian stocks have been attacking record levels this week and analysts see more gains provided next week's presidential election goes peacefully and the front runner turns out to be as market friendly as hoped.

Frontrunner and former chief security minister Susilo Bambang Yudhoyono faces his former boss, incumbent President Megawati Sukarnoputri, for the country's top job.

The rupiah currency was being quoted at 9,005/9,020 to the dollar late on Thursday, stronger compared to late Wednesday's level of 9,091/9,101. It managed to hit 8,985 in late trading, its highest since July. ($1=9,005 rupiah)

Not sure where to put this, I figure this is a good place.

India to launch Indonesian satellite
www.chinaview.cn 2004-09-17 23:04:41

NEW DELHI, Sept. 17 (Xinhuanet) -- India will send an Indonesian micro-satellite into space on an indigenous launch rocket by early 2006, the Indo-Asian News Service (IANS) reported Friday.

Under a contract signed by Antrix Corporation, the commercial arm of India's department of space, and Indonesia's National Institute of Aeronautics and Space, the 50-kg Lapan-Tubsat satellite will be launched on the polar satellite launch vehicle.

The Indonesian satellite will ride piggyback with an Indian satellite on the rocket during the last quarter of 2005 or early 2006, the IANS quoted an official statement as saying here Friday.

The launch has been provided by Antrix "at a price which compares well with what the Indian Space Research Organization's competitors offer for launches of micro-satellites," the statement said.

Four satellites of Germany, South Korea and Belgium have so far been launched by the ISRO and contracts were earlier signed for sending two more -- one each from Singapore and Europe -- into space.

Indonesia's space agency, popularly known as Lapan, has in the past provided a location for establishing the Indian Space Research Organization's ground station at Biak in that country. The station, for which Indonesia also provided manpower, was used to support the tracking of Indian satellite launches, the statement said. Enditem

Guys, this is the 1st satellite made by Indonesia, this satellite is designed for reconnaisance and air to surface photo for intelligence stuff.

I am happy that we finally launched our own satellite but also dissapointed because India already made their space rocket. Indonesia is the 2nd country in Asia that launch their own rocket almosr 3 decades ago....sadly now India already overtaken Indonesia step...however its good news for Indonesia.

cheers

Stuff like this makes me wish I could just go there and help out. So much potential...


Resource-rich Natuna still underdeveloped
Tony Hotland, The Jakarta Post/Natuna, Riau Islands

As an emerging regency, Natuna has great potential for development.

Located near Singapore, it groups some 272 islands and intersects with one of the world's busiest trade routes, the Strait of Malacca, with about 280 ships crossing through the region daily.

The potential for tourism and fisheries is obvious. Natuna's islands have clean white beaches -- but it is the annual catch of 75,000 tons of fish that currently drives most of the local economy.

Natuna also had produced about 38 million tons of natural gas during the past few decades and its estimated 45 trillion cubic meters of gas reserves help make Indonesia the world's largest liquefied natural gas (LNG) exporter.

The area is believed to have huge still-untapped reserves of gas and minerals deposits, including 5.3 billion cubic meters of mine-able granite.

The region is also home to 40,000 hectares of coconut palm plantations and 6,000 hectares of clove plantations.

And with a population of less than 90,000, the inhabitants should be able to enjoy the prosperity that the inevitable investment into the area would bring, Coordinating Minister of the Economy Dorodjatun Kuntjoro-Jakti and Minister of Culture and Tourism I Gede Ardika said on their first visit to the regency.

Despite their big words, the regency is still largely underdeveloped and most of the villages are run-down looking with dilapidated public amenities.

About half of Natuna's population are categorized as poor, and less than 3 percent of working people are graduates of senior high schools or universities.

There were no high-rise building or evidence of any hectic economic activity when The Jakarta Post paid a visit recently.

Only few cars, mostly belonging to local administration officials, passed through the quiet and rugged roads, which were often unsealed. The best view, besides the area's its white beaches and blue seas, was perhaps the vista of the gigantic regional government office under construction, which is expected to cost a whopping Rp 35 billion (US$3.88 million).

Addressing local officials, Dorodjatun said the regency needed to identify market opportunities in which it could outstrip other areas.

"You can reap many benefits from your location. You're near Singapore, (Malaysia's) Johor Baru and Trengganu and also Pontianak (West Kalimantan). You should also improve the quality of your human resources and introduce technology like motor boats or (oil) well drills," he said.

He said the regency should quickly adopt a city plan to be later endorsed as a bylaw -- a guideline for the administration and investors to regulate investment activities.

"This way, you can arrange which parts of the city should be developed. You can also centralize residential areas which need less infrastructure like telecommunications or electricity," he said.

Natuna Regent Abdul Hamid Rizal said the slow development of the region, especially infrastructure development, was because the area was dependent on the central government for funding through the general allocation fund (DAU), special allocation fund (DAK), and revenue sharing schemes.

The regency's 2004 budget is about Rp 310 billion, down from Rp 390 billion last year with the largest portion from the DAU.

The region only received 30 percent of the revenue earned from its large natural gas reserves, he said and its dependence on central government would last for some time yet, he said.

Asked about the feasibility taking over the management of several national taxes, including land and property taxes, Dorodjatun said this would be a difficult task and would need comprehensive and detailed planning.

"We haven't looked into this, but (the process) could be really difficult. But in the meantime, we can only (get money) through the DAU and DAK mechanisms, and through revenue-sharing based on the proposed 2005 state budget draft," Dorodjatun said.

However, the regency was still ready to discuss this idea if it was proposed by the next government, he said.

The government and the House of Representatives are currently in the process of revising the Law No. 22/1999 on regional autonomy and Law No. 25/1999 on regional budgets, and are expected to complete them by the end of the month.

Yudhoyono victory expected to give Indonesia economic boost

JAKARTA, Indonesia (AP) - Investors were optimistic that former general Susilo Bambang Yudhoyono has won a landslide victory in presidential elections and would kick-start needed economic reforms.

"The market has seen Yudhoyono as a force that could make some of these reforms come about,'' economist David Fernandez with J.P. Morgan Chase in Singapore said Tuesday.

Markets will likely also benefit from the peaceful polling across this 13,000-island archipelago, which proved the world's most populous Muslim country can hold a smooth and organised democratic election.

The stock market opened up 1.5 percent to 827.181.

The U.S. dollar fell 1 percent against the Indonesian rupiah currency. The dollar was at 8,940 rupiah, down from its close Friday at 9,030 rupiah.

But the gains may be short-lived.

Markets are expected to soon shift their attention to the challenges facing Yudhoyono, analysts said.

These include a potentially hostile Parliament and an entrenched political elite that could fight a rearguard action to block reform.

Foreign investors will also be keen to see whom Yudhoyono appoints to key economic jobs in his Cabinet.

That might not become clear before Oct. 20, the date set for the formal presidential

inauguration.

An official election result is due Oct. 5. Yudhoyono has so far sketched only a vague outline of policies he will follow.

With nearly half the votes counted early Tuesday, Yudhoyono had about 60 percent to Megawati's 40 percent, the General Election Commission said.

Indonesia's economy will grow about 5 percent this year, but, unlike many other Southeast Asian nations, it has failed to fully recover from the 1997-98 regional financial crisis.

Many foreign investors have stayed away, put off by Megawati's failure to tackle corruption and push through reforms needed to restore economic health.

Yudhoyono, although he served as Megawati's security chief before challenging her for the presidency, has distanced himself from her administration, promising to fix the sluggish economy, crack down on rampant graft and provide jobs for the country's 210 million people.

But critics charge that both candidates have maintained strong links with the country's corrupt business, political and military elite.

Despite Yudhoyono's popularity with voters, who see him as offering a fresh start, he lacks a well-organized political machine.

Analysts said that could cause him problems in pushing reforms through Parliament.

Yudhoyono has shown some signs he's willing to take on the elite that ruled Indonesia for 32 years under Suharto and which has largely remained in place despite the emergence of a democratic system.

Last week, Yudhoyono said he would punish former bank owners who misused US$16 billion in emergency loans during the Asian crisis but have so far paid back only a fraction of that amount.

The new president's Cabinet appointments will give an early sign of what policies Yudhoyono will follow, J.P. Morgan's Fernandez said.

Many hope Finance Minister Boediono will remain in his position after helping steer Indonesia's government finances from the brink of bankruptcy in the past few years.

Economists credit Boediono as the architect of the main achievement of Megawati's government, allowing the country to graduate this year from its International Monetary Fund emergency borrowing program.

"The market will be thrilled if he keeps his job,'' Fernandez said.

But in other areas, the market will be looking for an overhaul of a Cabinet which has failed to bring back foreign investment, analysts said.

Also of keen interest internationally will be whether the new president retains oil minister Purnomo Yusgiantoro, president of the Organization of Petroleum Exporting Countries. - AP

Very good article about how we Indonesians should step out of the box and start thinking globally in term of Indonesian brands.


What's stopping RI brands from competing globally

Michael J. Webdell, Jakarta

Nike, Samsung, Tommy Hilfiger, Guess, Sony: These are just a few brands popular to people across the world. In shopping malls from Jakarta to London, and New York to Seoul, they are symbols of a lifestyle consumers pay premium to be part of. But whether one pays US$50 for their Hilfigers in Los Angeles or 10,000 yen ($91) in Tokyo, many of these products have something more in common than a brand name or a high price tag: Many of them are made in Indonesia.

Of course, there's nothing shocking about that. For years, Indonesia has been manufacturing the products branded by some of the world's most prestigious companies. Rather, with the country's clear capability to manufacture such highly sought-after goods, it is puzzling why Indonesia lacks any globally-known brands of its own.

To be fair, Indonesia has its share of strong domestic brands. Aqua, Sampoerna, Indomie, Hoka Hoka Bento, and Lion Air clearly demonstrate Indonesian capability for developing and managing successful brand identity programs. So, if Indonesian business has the capability to manufacture such quality products, and has at least a general understanding of branding as a value-added marketing tool, where do Indonesian companies fall short in creating their own global brands?

Socially speaking, Indonesia is at a disadvantage for creating global brands. The modern concepts of branding and marketing are a creation of capitalism. And though Indonesia can be said a grand contributor to capitalism's development, the country's part has been largely limited to supplier.

Of course, suppliers of commodities and low-cost products are a very important part of our economy; and I am not attempting to discount them. But after centuries of learning its well-defined place in the economic food chain, excluded from the value-added aspects of branding, many Indonesian businesses lack the profound knowledge and confidence to undertake this initiative. Many don't realize they could ever attempt such a thing as creating a global brand.

However, the good news is the knowledge and skills required in creating and managing an internationally successful brand can be learned. And, in my opinion, the lack of confidence for marketing brands globally is unfounded. This opinion is based on my previously outlined points that Indonesia does produce the high-quality goods marketed by many of today's global brand leaders, and that Indonesia has many successful domestic brands. With a little initiative, these resources can be successfully applied internationally.

Perception of what Indonesian business can and can't do is the real gremlin in creating global brands. It is always shocking to me when business and government give into the notion that the country's slower performance on exports is helplessly related to issues like anti-Muslim sentiment, or inclusion on "travel warning" lists.

These issues don't need to consume Indonesia's brand identity when the country has so much to offer. Presenting them as the cause of current economic conditions is an inaccurate rationalization that plays into negative stereotypes and takes our focus away from discovering new economic growth opportunities. These are mental obstacles by which business does not have to be stymied.

In my experience, business is business. As far as foreign corporate buyers are concerned, they just want a good price, quality products, excellent service, and an easy, safe transaction. Where the end consumer is concerned, unless they are buying a cultural-specific or country-specific product such as French perfume, they don't really care where a product is made.

A prime example is Tommy Hilfiger who used the slogan "An American Original" to support their brand identity. I am not aware of many Hilfiger products that are actually manufactured in The United States. But with annual sales of about $1.9 billion in 2003, clearly the power of Hilfiger's brand is what sells his products. Whether they are made in the United States, Indonesia, or any other country doesn't really matter.

Hypothetically, an Indonesian company might do just as well creating and marketing its own "original American" brand. We just need the vision, like Tommy Hilfiger had, to create something as unique and wonderful.

Indonesian business must start studying the success of global brands and figuring out how to start participating themselves. By creating new brands of their own, or adapting suitable Indonesian brands to international markets, they can create greater sales for their companies and increase exports for the country while keeping a greater share of the Indonesian-made products' end value in Indonesia.

But we all have to get past this engrained image of what we think Indonesia is and start making it what it can be. It is up to Indonesian investors and business to gain the knowledge, take the initiative, and realize that Indonesian brands can be globally successful too.

The writer is a marketing and management consultant. He may be contacted at mjwebdell@aol.com.

Tuesday September 21, 4:26 PM
Asia Fund View: Indonesia Election Good For Region
By Anusha Attygalle

Of DOW JONES NEWSWIRES

SINGAPORE (Dow Jones)--The conclusion of Indonesia's presidential election is positive for the investment climate in southeast Asia as a whole, international fund managers said Tuesday.

The holding of a smooth, largely violence-free vote in the world's most populous Muslim country should help rehabilitate the entire region in the eyes of foreign investors, and may encourage fresh long-term fund inflows into a range of countries, they said.

"We are increasingly seeing countries that were considered less open to foreigners on a path to liberalizing" politically, said Stephanie Lee, Singapore-based fund manager at Aberdeen Asset Management Asia, which has US$37.5 billion under management.

The election "is a positive sign for global fund managers", she added.

The apparent landslide election victory for challenger Susilo Bambang Yudhoyono may draw fresh money to Indonesia because he's viewed as a more decisive figure than incumbent Megawati Sukarnoputri and more likely to push through economic reforms, such as punishing former bank owners who misused US$16 billion in emergency loans during the Asian crisis and have so far paid back little of it.

In addition to international funds, the Indonesian-Chinese business community may repatriate significant amounts of money from offshore accounts in places such as Singapore if it concludes Yudhoyono is an economic pragmatist. Indonesia's Employers Association, which has many prominent ethnic Chinese members, is working with the American Chamber of Commerce to prepare a roadmap of economic reforms that will be presented to Yudhoyono.

But the repercussions of the election will be felt beyond Indonesia's borders. Malaysia, Thailand and the Philippines - and by extension Singapore, which lies at the center of the region - have all been concerned by the threat of Islamic extremism, separatism or violence in recent years. A car bomb this month near the Australian embassy in Jakarta, which killed nine people, was the most recent reminder of the threat.

The Indonesian election suggests such conflict can eventually be resolved through peaceful, democratic means. Fund managers are encouraged that extreme Islamic rhetoric played little part in the Indonesian election campaign, which focused instead on issues such as jobs and corruption. And Yudhoyono's new Democratic Party is expected to rely on a wide coalition of secular and moderate religious parties.

"As the world's most populous Muslim country, Indonesia is an important showcase that democracy can work in Muslim countries," said Singapore's DBS Bank in a research note.

"Indonesia is increasingly viewed as a moderate Islamic country," it said, noting that "Yudhoyono has an opportunity to win back foreign investor confidence."

Foreign governments generally share the perception that Yudhoyono, a former general who has trained with the U.S. military, will be tougher on terrorism than Megawati was.

Furthermore, the Indonesian vote follows an election in Malaysia in March which sent a similar signal; Prime Minister Abdullah Ahmad Badawi's ruling coalition crushed the main fundamentalist Islamic party in that election.

This month, the unexpected release of Malaysian dissident politician Anwar Ibrahim from jail showed a further easing of political tensions in the country.

Anwar's release "emphasized that more governments in the region are looking to free up control and commercializing their policy-making", said Aberdeen's Lee.

Partly as a result of such events, "we are seeing a steady flow (of equities funds) both to Indonesia and Malaysia," she said.

Fund managers said they would watch in the next few months whether Yudhoyono and Abdullah actually proceeded with concrete economic reforms.

Among the challenges facing Yudhoyono are a potentially hostile Parliament and an entrenched political elite that could fight a rearguard action to block reform. Foreign investors will also be keen to see whom Yudhoyono appoints to key economic jobs in his cabinet; that's not likely to become clear before Oct. 20, the date set for the formal presidential inauguration.

Meanwhile, Abdullah will have to deliver on his reform promises - particularly efforts to restructure large, locally listed corporations with government links - to sustain fund inflows.

If reforms in Indonesia and Malaysia do go ahead, fund managers say, there could be a fresh influx of foreign money chasing shares of banks, construction, utility and property companies.

"The big (stock) movers are to be those areas seen as the engines of growth," said Aberdeen's Lee.

Good reading guys, I enjoyed it, anyway, I hope SBY will perform a new cabinet that very familiar with the market and friendly with the forex/stocks exchange market.

cheers

Indonesia passes new bankruptcy law

Indonesia's parliament on Wednesday passed a new law that prevents creditors from filing bankruptcy suits against solvent banks and insurance companies.

The law is aimed at better protecting foreign investors, some of whom have been declared bankrupt by courts despite being clearly solvent after Indonesian creditors filed vindictive petitions against them.

"I believe the law will satisfy all parties as it will provide certainties for investors to do business in Indonesia," Justice Minister Yusril Ihza Mahendra said.

The new law specifies that only the finance minister can file a bankruptcy petition against insurance companies and state-owned utility companies in commercial courts.

Meanwhile the attorney general and the central bank are the only bodies permitted to file petitions against banks.

Currently, any creditor can file a bankruptcy petition in commercial courts.

Earlier this year, Jakarta's Commercial Court declared the local unit of U.K. insurer Prudential PLC bankrupt because it refused to pay a disputed fee with a former sales agent.

Prudential's troubles were similar to those faced by the Indonesian unit of Canadian insurer Manulife Financial Corp. two years ago when its profitable Indonesian unit was declared bankrupt by the same court over a small claim.

Although the Supreme Court overturned the verdicts in both cases, the commercial court's decisions have further discouraged foreign investment in Indonesia.

Indonesia August domestic cement sales up 13.6 pct

JAKARTA, Sept 22 (Reuters) - Indonesian cement consumption grew 13.6 percent in August to 2.88 million tonnes compared with the same period a year ago, according to data from the country's largest cement maker, PT Semen Gresik Tbk.
Monthly cement sales are closely watched by financial markets as an indicator of building activity and consumer demand, the key driver of economic growth in Indonesia.

The data on the company's website (www.semengresik.com), also showed Gresik's domestic sales grew 13.3 percent to 1.25 million tonnes in August.

The August national sales figure would bring Indonesian consumption for the first eight months of this year to 19.36 million tonnes, a rise of 8.6 percent year on year.

State-run Gresik, 25.5 percent owned by Mexican cement giant Cemex , controls nearly 45 percent of total national sales so far this year.

Domestic sales grew by only one percent in 2003 to 27.5 million tonnes, hurt by rises in fuel and utility prices.

Some analysts have said that domestic cement sales will rise eight percent this year, helped by property projects and other spending linked to the country's parliamentary and presidential elections.

Gresik shares have risen nearly 31 percent so far this year, outpacing the overall index which has posted an 18 percent increase.

Gresik shares were at 10,250 rupiah ($1.13) by midday on Wednesday.

the last article conclude, theres massive construction in the property and building market...good news :D

cheers

Indonesia Must Lift Investment to Boost Jobs, Growth, IMF Says
Sept. 23 (Bloomberg) -- Indonesia's next president will need to boost investment and step up efforts to overhaul the country's banks to spur economic growth and cut unemployment, an International Monetary Fund official said in an interview.

``Indonesia has a great deal of potential. There is frustration that growth has not picked up to the potential level,'' Stephen Schwartz, the fund's top representative in Indonesia, said in an interview in Jakarta. ``The growth rates we have seen, while respectable, are not enough to absorb unemployment.''

Preliminary vote counts indicate former cabinet minister Susilo Bambang Yudhoyono is set to win Indonesia's first direct presidential election, inheriting the job of reviving Asia's slowest-growing developing nation. Concern about terrorist attacks that have killed more than 200 people has sapped investment, hampering efforts to create jobs for the one in six Indonesians without work.

Yudhoyono had 61.1 percent of the vote at 4 p.m yesterday Jakarta time with 97.9 million ballots counted. President Megawati Soekarnoputri had 38.9 percent.

The government expects the $208 billion economy to grow 4.8 percent this year, the fastest pace in four years, after a 4.5 percent expansion last year. Growth slid to 4.3 percent in the second quarter from a year earlier, the slowest in Asia after Japan, according to Bloomberg data.

``Most people think growth of 6 percent to 7 percent is achievable over the medium-term,'' Schwartz said.

The IMF arranged a $36 billion package for Indonesia between 1997 and 2003 after debt defaults caused by the 1997-1998 financial crisis led many banks to the brink of collapse. The government spent an estimated 650 trillion rupiah ($70 billion) bailing out lenders by injecting cash and bonds to boost capital.

Asset Sales

The IMF has pushed Indonesia to sell state-seized banks, control spending, rein in inflation and stabilize the currency. Inflation, which was 78 percent in 1998, stood at 6.7 percent in August.

``A great deal has been achieved in strengthening the financial system. One of the challenges for the new government would be to continue the process of turning the banks over into private hands,'' Schwartz said.

Sales of banks such as PT Bank Permata and other state assets will help Indonesia narrow the fiscal deficit to 1.3 percent of gross domestic product this year, or 26.3 trillion rupiah, and to 0.8 percent next year, balancing the budget by 2007, the government has said.

Ratings

Standard & Poor's said yesterday it may raise its rating on Indonesia's long-term foreign-currency debt from B, five levels below investment grade, if the next president forms a government committed to controlling the deficit and bolstering growth. S&P and Moody's Investors Service both lifted Indonesia's ratings two levels in the past year.

The presidential elections ``are not expected to herald major policy shifts but could be positive for reforms over the medium term,'' S&P said in a statement.

Foreign direct investment fell a third to $3.3 billion in the seven months ended July 31 from the year earlier amid concerns about terrorism, corruption and separatist conflicts.

Visitors shunned Indonesia after a Bali nightclub explosion two years ago left at least 202 dead, hurting the tourist industry that employs around 8 million people in the nation of 235 million people. A car bomb at the J.W. Marriott Hotel in Jakarta killed 12 people last year. Nine people died and 180 were injured in a Sept. 9 explosion outside the Australian embassy in Jakarta.

Investment

``If stability is maintained and security problems are addressed forcefully, it is not out of the question that over the next year we may start to see foreign investment follow,'' Schwartz said.

The IMF forecasts the economy will grow as much as 5.5 percent next year, in line with the government's forecast of 5.4 percent growth, the fastest in nine years. The Asian Development Bank says Indonesia needs $150 billion of investment over the next decade to raise growth to an average 6.5 percent a year.


To contact the reporters on this story:
Shanthy Nambiar in Jakarta at snambiar1@bloomberg.net.

To contact the editor responsible for this story:
Liz Goldenberg at egoldenberg2@bloomberg.net.
or Dan Moss at
or dmoss@bloomberg.net.

The rupiah is down to 9200 today when I read the news online

Indonesia's GDP/capita hits $1000 for the first time since 1997


Pendapatan Per Kapita Indonesia US$ 1.000
JAKARTA - Presiden Megawati Soekarnoputri mengungkapkan, hingga 2004 pendapatan rata-rata per kapita penduduk Indonesia telah mencapai sekitar US$ 1.000, atau sama dengan tingkat yang dicapai sebelum krisis ekonomi melanda Indonesia pada 1997.

Selain itu, pemerintah juga berhasil menurunkan defisit anggaran dari 3,2 persen dari Produk Domestik Bruto (PDB) pada tahun 2000, menjadi 2,1 persen PDB pada 2003, dan direncanakan pada 2004 ini defisit anggaran dapat turun menjadi 1,2 persen PDB.

Hal itu disampaikan Presiden Megawati dalam pidatonya di depan Sidang Tahunan Majelis Permusyawaratan Rakyat (MPR), di Jakarta, Kamis (23/9). ''Langkah-langkah perbaikan yang ditempuh pemerintah selama ini, telah berhasil meningkatkan PDB dan mengangkat pendapatan rata-rata per kapita penduduk Indonesia,'' ujarnya.

Megawati mengatakan, selama ini pemerintah telah menempuh langkah-langkah perbaikan fiskal, seperti melaksanakan stabilisasi melalui konsolidasi fiskal dan perbaikan ekonomi makro, melanjutkan pemulihan dan peningkatan fungsi intermediasi perbankan, serta pemulihan dan peningkatan sektor riil.

Peningkatan sektor riil dimaksud, terdiri dari program mengurangi hambatan investasi, meningkatkan pelayanan infrastruktur, mengatasi kemiskinan dan pengangguran, meningkatkan ketahanan pangan, dan menyediakan kebutuhan dasar bagi masyarakat berpenghasilan rendah.

''Melalui kebijakan makro tadi, dan seiring dengan kian terjaganya stabilitas politik, keamanan dan ketertiban, sampai akhir 2003 gejolak nilai tukar rupiah tetap dapat ditekan,'' katanya.

Nilai tukar rupiah dan Indeks Harga Saham Gabungan (IHSG) cenderung menguat, inflasi dan tingkat suku bunga cenderung menurun. Semua itu, kata Megawati, menggarisbawahi perlunya pemerintah melanjutkan konsolidasi fiskal dan menerapkan kebijakan makro ekonomi yang hati-hati dan terencana.

Megawati melanjutkan, pemerintah juga berhasil menurunkan rasio pinjaman pemerintah terhadap PDB, dari 100 persen pada 2000, menjadi 70 persen pada 2003. Selanjutnya pada 2004 direncanakan dapat diturunkan menjadi 60 persen.

Selain itu, lanjutnya, pemerintah juga melakukan pengurangan berbagai bentuk subsidi yang tidak tepat sasaran. Seperti subsidi bahan bakar minyak (BBM) dan listrik, yang lebih banyak menguntungkan lapisan atas, dan mengalihkannya ke dalam bentuk subsidi yang lebih tepat sasaran, yakni subsidi bagi kelompok masyarakat miskin dan berpenghasilan rendah.


Subsidi BBM merupakan subsidi yang paling besar, dan menurut Megawati, harus diturunkan secara drastis. Dalam tiga tahun terakhir, ujarnya, rasio subsidi BBM terhadap PDB mengalami penurunan dari 4,7 persen pada 2001 menjadi 1,9 persen di 2002, dan 1,7 persen di 2003. Pada 2004 ini, rasio subsidi BBM terhadap PDB ditargetkan menjadi 0,7 persen.

Namun, sambungnya, melihat kecenderungan peningkatan harga minyak akhir-akhir ini, subsidi BBM di tahun 2004 diperkirakan akan kembali meningkat cukup signifikan, bilamana pemerintah telah melakukan penyesuaian harga jual BBM untuk konsumsi di dalam negeri, khususnya penyesuaian harga jual BBM yang bukan untuk golongan masyarakat berpenghasilan rendah.

Subsidi listrik juga mengalami penurunan. Bila pada 2002 subsidi listrik sebesar Rp 4,1 triliun, pada 2004 menjadi Rp 3,4 triliun.

Selain itu alokasi dana kompensasi sosial di luar program operasi pasar khusus beras, meningkat dari Rp 2,9 triliun pada 2002 menjadi Rp 3,9 triliun pada 2003.

Bidang pendidikan dan kesejahteraan sosial mendapatkan alokasi dana kompensasi yang cukup besar yakni masing-masing mencapai 48,7 persen dan 28,2 persen dari total dana kompensasi.

Pengurangan subsidi BBM dan Listrik itu, ujar Megawati, diikuti dengan peningkatan subsidi pangan, pupuk, bunga kredit program dan angkutan, yang ditujukan bagi petani kecil dan masyarakat berpenghasilan rendah.

Dijelaskan pula, kontribusi kegiatan ekonomi usaha mikro, kecil, dan menengah (UMKM) serta koperasi terhadap PDB sangat besar. Pada 2003, kontribusi dari sektor itu mencapai 56,7 persen dari total PDB atau mencapai Rp 1.013 triliun.

Kredit macet pada sektor UKM, yang besarnya mencapai 3,9 persen pada 2002, relatif kecil dibandingkan dengan total kredit macet sektor perbankan sebesar 10,2 persen yang sebagian besar bertumpuk pada usaha besar.


Kinerja Perdagangan

Pada kesempatan tersebut Megawati juga mengungkapkan, selama kurun waktu 1999-2003, ekspor tumbuh rata-rata 5,1 persen per tahun. Total nilai ekspor pada 2003 tercatat sebesar US$ 61,1 miliar atau meningkat 6,8 persen dibandingkan dengan tahun sebelumnya. Peningkatan itu bersumber dari peningkatan ekspor migas dan nonmigas yang nilainya masing-masing naik 12,7 persen dan 5,2 persen per tahun.

Mengenai perkembangan impor, Megawati mengatakan, selama 1999-2003, impor tumbuh rata-rata sebesar 5 persen per tahun. Pada 2003, impor meningkat sebesar 4 persen dibanding 2002 yakni dari US$ 31,3 miliar menjadi US$ 32,6 miliar pada 2003. Kenaikan impor ini disebabkan meningkatnya kebutuhan baik untuk konsumsi maupun produksi domestik.

Sementara posisi neraca perdagangan, ujarnya, menunjukkan gambaran yang menggembirakan dan terus berada pada angka surplus, baik untuk migas maupun non migas.

Neraca perdagangan pada 1999 mencapai surplus US$ 24,7 miliar sedangkan pada 2003 surplus meningkat menjadi US$ 28,5 miliar. Selama periode 1999-2003 tumbuh rata-rata 6 persen per tahun. Sampai dengan semester I 2004, posisi neraca perdagangan surplus US$ 11 miliar, terdiri dari migas sebesar US$ 2,5 miliar dan non migas US$ 8,6 miliar. (L-10)

Its true that Indonesia macro economy has been in pre-crisis level and its doing very well, but the investment is extremely weak, the outward investment is very high compare to inward investment, negative inward investment means the government will only achieve 7% growth in 2008. I hope SBY will do something about this, especially Batam FTZ.

The market was reacted negative when finance minister Budiono wont be in the position again for the new cabinet, there was heavy selling on stocks, but thanks God it is now back to normal, stocks back to 816 and rupiah is back to 9130 from 9235 in the morning.

cheers

Boediono may still be in the cabinet though...he may retain his finance portfolio.

I heard that Lin chen wei and Marie pangestu will also be in the cabinet along with Kwik Kian Gie as Bappenas minister again.

cheers

Batam tax office ignores House's 'law'
Fadli, The Jakarta Post, Batam

The House of Representatives might have won applause from the proponents of free trade in the industrial island of Batam for its bold move to unilaterally endorse a bill that will change the island into a free trade zone (FTZ).

However, they are now facing the reality that the island's tax officials are unwilling to implement the law.

Sumarno Salim, head of Batam's tax office, said on Wednesday that his office rejected the "law" in line with the central government's policy.

"Whatever the House says, finally, it's the government which takes the action and Batam's tax office is an arm of the government. The House may want free trade system be implemented across Batam, but if the government rejects it, so what?" he told The Jakarta Post.

While the government and the House were arguing whether to implement free trade system across Batam, the government started levying value added tax and luxury tax on several commodities early this year in accordance with the Governmental Regulation No. 63/2003.

Currently, the taxes are imposed on cigarettes, alcoholic drinks, cars and electronic products.

This year, Batam's tax office targeted revenue from the taxes at Rp 443 billion.

Sumarno said he was optimistic to reach the target, citing that his office had thus far collected 40 percent of the target revenue.

Located in the Malacca Straits, about one hour boat ride from Singapore, Batam is one of the nation's prime industrial areas that has attracted billions of dollars investment. The House wants to apply a free trade system across the island, but the government wants to apply the so-called "enclave FTZ" system, under which only businesses operating in selected industrial zones of the island are exempted from taxes.

Both parties proposed their own bills for the island but failed to reach a compromise. Recently, the House made a controversial move by passing its bill into "a law" despite the government's rejection.

Under the nation's legal system, the Constitutional Court may be asked by any parties to review any law, but Minister of Justice and Human Rights Yusril Ihza Mahendra said the government had no plans to file a petition with the court as it considered the "law" endorsed by the House did meet the basic requirement (the government's approval) to be called a law.

Johannes Kennedy Aritonang, chairman of Batam's Association of Industrial Zone, said he hoped Susilo Bambang Yudhoyono, who is set to become the nation's next president, would approve the "law" that has been endorsed by the House.

"We once discussed with SBY about the matter in Bali. He then promised to issue a pro-business policy," Johannes said, calling Susilo by his popular address.

According to him, many foreign investors have decided to pull out of the island once they knew the government would implement an enclave FTZ system on the island rather than a common FTZ system.

Sumarno, however, insisted that investment climate on the island had by no means been affected by the government's plan to apply the enclave FTZ system.

I heard that Lin chen wei and Marie pangestu will also be in the cabinet along with Kwik Kian Gie as Bappenas minister again.

cheers

Maybe possible since Lin Che Wei was one of the first to congratulate SBY on the night after the election. It is good to see more pro business faces on the cabinet.

Bali is a Top Choice for Investment, says Colliers International


Bali is often considered a perfect holiday destination for all ages all over the world and now with greater transparencies in its legal system and a relaxation of government regulations, it is rapidly becoming a favorite market for investment.

(PRWEB) September 25, 2004 --According to Colliers International, Bali is now a viable market for property investors. Mr. Ginn Lai, Regional Director of Colliers’ International Properties division explains, “Bali is becoming a top choice for investment. With a combination of diligent developers, a relaxation in government regulations and clearer transparencies in the legal system, we are seeing greater interest from investors. Our recent exhibition sale last weekend for Club 151 in Seminyak illustrates this point. The property realized more than a 50 per cent sellout of the 26 villas in Phase 1, which is an excellent result. ”

Mr. Lai continues, “Club 151 represents a turning point in the saleability of Bali property. The biggest hurdle in marketing Bali property has been alleviating purchaser concerns relating to the legal, political and social circumstances prevalent within this region. The packaging of Club 151 has appealed to sophisticated purchasers who, until now, have been unable to quantify and mitigate the inherent risks with investing in Bali.”

Detailed due diligence conducted by Colliers and Hong Kong solicitors has been crucial in satisfying purchasers and ensuring that legal documentation provides a level of protection for investors. Key issues of clarification included translations of Indonesian legal documentation, Hong Kong legal representation for vendor’s Indonesian solicitors, establishing re-course for purchasers in the event of delays and non-completion of the project as well as clear and realistic rental projections to ensure fast payback. In addition, all transactions were in US dollars to avoid currency risks with the Rupiah.

“Club 151 is a growing resort brand, with future developments in the pipeline for other areas of Bali and private islands off the coast of Bintan…which will certainly be attractive to investors given Bali’s current investment environment. ” concluded Mr. Lai.

Prices for Club 151 start from US$220,000 for a 2-bedroom fully furnished villa. Other facilities include private club facilities and membership privileges, as well as 5-star resort management.

Club 151 Resorts International is owned by Pt. Hanno Bali. According to Hanno Soth Chairman of Pt. Hanno Bali, the company is gratified by the overwhelming response.

From 1999-2004 a total of 167 trillion rupiah were corrupted. If the total cost of building JKT monorail (2 lines) is around 4,7 trillion rupiah, you can imagine how many monorail we can build in Indonesia. How many school can be build, how many poor families can be helped out, how many ... how many ...

Read the complete news in kompas.com (in Bhs Indonesia)

http://www.kompas.com/kompas-cetak/0409/25/utama/1288248.htm

Let me know what's your idea to stop corruption.

Let me know what's your idea to stop corruption.

Tranparency for all government contracts. Creation of a corruption task force that is filled with highly qualified, highly payed people from the police, foresntic auditors, investigators, and other relevant professions.

I would also raise the salaries for government officials, military and the police. They're salary are very low and for us to have a professional bueracracy, defense and law enforcement, we need to recruit better people.

That is a start.

From 1999-2004 a total of 167 trillion rupiah were corrupted. If the total cost of building JKT monorail (2 lines) is around 4,7 trillion rupiah, you can imagine how many monorail we can build in Indonesia. How many school can be build, how many poor families can be helped out, how many ... how many ...

Read the complete news in kompas.com (in Bhs Indonesia)

http://www.kompas.com/kompas-cetak/0409/25/utama/1288248.htm

Let me know what's your idea to stop corruption.

Hmm, that amount of money is enough to create millions of jobs for the 40 million unemployed and shift economic growth to 5-6% IMO

There are already corruption task forces, sadly..the task doesnt have much will to face with the corruptors nor the judicial process in the court, because all you know how court goes in Indonesia.

The dilemma for Indonesia, even if they raised the wages of every government official and others related, they will still corrupt. Why? With the hike in basic commodities, fuel and any related goods, it will only be useless.

Except, they rise the wages significantly, which that only happen when Indonesia will have a budget surplus and the oil price is down.

My solution for corruption is tough government law on corruption, no matter what the Human right says, sometimes radical law in corrution good for its citizen.
I think why corruption is now spreading all accross the country is because government fault by giving autonomy for every provinces in Indonesia. The state government must also give good example to their provinces government in order to achieve good and clean government.


cheers

SBY told to scrap high-cost economy

Ridwan Max Sijabat, The Jakarta Post, Jakarta

The likely president-elect Susilo Bambang Yudhoyono must uphold legal certainty and security, and phase out the high-cost economy to encourage investment and create jobs, investors and employers say.

They said the next government must work to restore security and guarantee legal certainty if it wishes to attract foreign investment.

Indonesian Employers Association secretary-general Djimanto said Indonesia was no longer a major destination for foreign investors due to legal uncertainty, security problems, rampant illegal fees and a complicated and corrupt bureaucracy.

He said direct foreign investment in Indonesia had slumped in the first semester of 2004 from the same period in 2003, because the country was no longer considered an attractive investment destination.

"Many foreign companies have suspended investment in Indonesia because of legal uncertainty and security problems, including terror attacks. Worse, many investors have pulled out of the country because of the high-cost economy, which has left them unable to compete with other countries' products," he said.

Apart from legal certainty and security, the next president will also have to deal with the country's poor infrastructure

"Repair all damaged the infrastructure in the regions, otherwise more investors will relocate their investments to other countries, causing more layoffs," Djimanto said.

In the latest World Investment Report, Indonesia was ranked 138th out of 164 investment destinations across the globe. The absence of security and legal certainty, damaged infrastructure and a high-cost economy were cited as the reasons for Indonesia's lack of competitiveness compared to other Asian countries.

Former manpower minister Bomer Pasaribu said Indonesia should follow the lead of Vietnam, which has become more competitive than Indonesia in attracting investment by maintaining security and legal certainty, developing its infrastructure and providing incentives for foreign investors.

He said the pledges made by Susilo during the election campaign were a political contract that he had to implement.

In outlining his economic program during the campaign, Susilo said he wanted to develop a employment-friendly economic policy to help resolve the problem of unemployment.

Almost 10 million people nationwide are unemployed, while 35 million are underemployed, meaning they work less than 35 hours per week.

Bomer said Susilo and his Cabinet had to design a new manpower plan that was investment-friendly and encouraged people to create small and medium-sized companies to create more jobs.

Susilo's government will need to raise economic growth to 7 percent annually in order to create about 17,500 jobs annually. If that works, unemployment could be solved within five years.

"But it is impossible for this to occur under such poor political, social and economic conditions," Bomer said.

Djimanto and Bomer were both of the opinion that besides attracting more foreign investors, the next government must develop the informal sector, especially the agricultural sector, spur labor exports and create more development projects that are financed by the state budget.

Tak Boleh Mendengar Satu Sisi

Tiga tim ekonomi menjadi penopang utama perumusan kebijakan ekonomi pasangan Susilo Bambang Yudhoyono-Jusuf Kalla. Ada juga sukarelawan seperti Lin Che Wei.


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NADA bicaranya tenang. Kata-kata yang diucapkannya rapi dan teratur —seperti juga paduan jas, dasi, dan sepatu yang dikenakannya. Ketika membuka percakapan, kalimat pertama yang meluncur dari mulutnya khas merendah gaya Medan, "Sebetulnya apalah awak ini."

Dari namanya memang tak pelak Irsan Tanjung berasal dari Andalas. Berangkat dari dunia akademisi yang senyap—ia guru besar Fakultas Ekonomi Universitas Indonesia (UI)—Irsan kini berlabuh di ranah yang mungkin tak terbayangkan sebelumnya: jagat politik yang ingar-bingar.

Semuanya bermula di awal Agustus 2002. Ketika itu Susilo Bambang Yudhoyono (SBY) mengundang Irsan bersama Subur Budhisantoso dan Achmad Mubarok berbincang di sebuah tempat di kawasan Bambu Apus, Jakarta Timur. SBY mengutarakan keinginannya mendirikan partai politik dengan ideologi nasio- nalisme-religius.

Setelah menyampaikan keinginannya, SBY pamit. Tinggallah Subur, Irsan, dan Achmad berpikir dan bekerja keras mewujudkan cita-cita itu. Mereka, didukung teman-teman lain, akhirnya mendirikan Partai Demokrat. Sesuai dengan keahliannya, Irsan didapuk menjadi salah satu ketua yang mengurusi platform dan kebijakan partai di bidang ekonomi.

Sejak itu Irsan dan tim ekonominya terus-menerus memberi masukan kepada SBY. Mengingat kesibukan SBY yang bertumpuk, baik sewaktu masih menjadi Menteri Koordinator Politik dan Keamanan maupun setelah mundur dan aktif berkampanye, tak ada waktu tetap bagi tim Irsan bertemu SBY. "Kami mengoptimalkan waktu masing-masing," ujar Irsan, yang pernah menjadi pejabat di Departemen Keuangan.

Irsan juga tergabung dalam tim sukses SBY yang mengurusi substansi kampanye. Bidangnya lagi-lagi ekonomi dan kesejahteraan rakyat. Sebagai ekonom, pemikiran Irsan tergolong berani. Mengingat pentingnya pertumbuhan ekonomi untuk memperluas lapangan kerja dan mengurangi kemiskinan, ia mengusulkan peningkatan belanja pemerintah dan memperbesar defisit anggaran—sesuatu yang biasanya dihindari kalangan "ekonom konservatif".

Irsan bukan tak menyadari, mesin utama untuk mendorong pertumbuhan ekonomi adalah investasi. Namun, senyampang pemodal asing belum kunjung datang, pemerintah mesti berinisiatif memberi teladan untuk menumbuhkan kepercayaan investor. "Stabilitas fiskal memang perlu, tapi saya lebih suka stabilitas yang dinamis, bukan statis," ujarnya dengan nada bicara yang tetap datar, tak meledak-ledak.

Pola pikir Irsan yang menyempal dari arus utama terlihat pula dalam konsep menangani utang luar negeri. Untuk meringankan beban anggaran, Irsan menekankan pentingnya meminta penjadwalan utang dari negara-negara kreditor. Tak adanya lagi payung multilateral dari Dana Moneter Internasional (IMF) baginya tak membuat jalan tertutup. Pendekatan bisa dilakukan secara bilateral kepada negara-negara pemberi pinjaman. "Hal ini pernah sukses dilakukan pada awal Orde Baru," katanya.

Hari-hari Irsan berkutat dengan konsep mungkin segera berakhir. Setelah SBY hampir dipastikan menjadi presiden, terbuka kesempatan lebar baginya menguji resep-resep ekonominya itu di lapangan. Saat ini pun ia telah terpilih jadi anggota DPR dari Demokrat daerah pemilihan DKI Jakarta. Tapi Albert Yaputra, koleganya yang juga terpilih menjadi anggota DPR dari wilayah Kalimantan Barat, memberi isyarat, "Mungkin Pak Irsan akan segera meninggalkan DPR."

Irsan memang disebut-sebut menjadi salah satu kandidat Menteri Koordinator Perekonomian dalam kabinet mendatang. Soal jabatan ini, Irsan mengaku nothing to lose. "Semua yang menentukan SBY," katanya. Hanya, belakangan ini kesibukannya bertambah. Banyak orang ingin bertemu, telepon genggamnya tak henti berdering.

Percakapan dengan Tempo pun beberapa kali tersendat diselingi telepon yang terus menjerit. "Ini dari Arwin Rasjid, dia kasih selamat dan mau memberi masukan," Irsan menjelaskan pemanggil yang baru dilayaninya. Arwin adalah Wakil Direktur Utama Bank BNI dan Ketua Ikatan Alumni UI-Fakultas Ekonomi (Iluni-FE).

Namun, SBY tak hanya bersandar pada masukan tim Demokrat yang dipimpin Irsan Tanjung. Ada dua tim lain yang punya peran tak kalah menentukan. Tim pertama meliputi para ekonom yang tergabung dalam The Brighten Institute, yang bermarkas di Bogor. Yang lain adalah Kelompok Lembang 9, yaitu para ekonom dan profesional yang biasa berkumpul di sebuah rumah di Jalan Lem-bang 9, Jakarta Pusat.

Tim Brighten Institute diketuai Joyo Winoto, doktor ekonomi-politik lulusan The Michigan State University, Amerika. Terdiri atas 11 peneliti bergelar doktor dari berbagai bidang lulusan universitas dalam dan luar negeri, Brighten sejak awal disiapkan menjadi tangki pemikir SBY. Bahkan SBY sendiri ikut mendirikan lembaga ini tiga tahun lalu.

Hampir seluruh awak Brighten merupakan alumni Institut Pertanian Bogor (IPB) dan mengajar di almamaternya. Mereka antara lain Anny Ratnawati, Hermanto Siregar, dan Erwidodo. Nama lain adalah Agus Pakpahan, yang pernah jadi Direktur Jenderal Perkebunan Departemen Pertanian—tapi kemudian mengundurkan diri.

Kendati tak resmi tergabung dalam tim sukses SBY-JK, Brighten merupakan dapur penggodok kebijakan ekonomi pasangan itu dan memasok data-data pendukungnya. Joyo Winoto sendiri berperan sebagai jembatan penghubung dengan menjadi anggota Dewan Pakar dan kemudian Tim Substansi SBY-JK.

Joyo dikenal rendah hati. Tutur katanya santun, terkesan tak mau menonjolkan diri. Demi membantu SBY, ia meninggalkan posisi Direktur Pangan, Pertanian, dan Pengairan di Badan Perencanaan Pembangunan Nasional (Bappenas). Pentingnya posisi Joyo dan Brighten, serta besarnya kepercayaan SBY, tecermin dari penunjukan tim ini mengikuti seminar tentang Indonesia di Tokyo, Jepang, akhir Agustus lalu. Di sana Joyo tampil sebagai komandan tim SBY, sedangkan kubu Megawati dipimpin Heri Akhmadi.

Sebagai ekonom dengan basis ilmu pertanian, Joyo punya obsesi memerangi pengangguran dan kemiskinan dengan melakukan revitalisasi pertanian dan pedesaan. Di sini pembangunan infrastruktur menjadi penting. "Studi kami menunjukkan, kalau mau menurunkan angka pengangguran, infrastruktur sangat penting," ujarnya kepada Tempo.

Joyo juga optimistis investasi bisa ditingkatkan untuk memacu pertumbuhan ekonomi. Caranya tak cuma dengan membenahi kebijakan makro seperti stabilitas fiskal, keamanan, dan kepastian hukum. Sektor mikro pun perlu ditata kembali. Terutama soal pajak, bea-cukai, perburuhan, desentralisasi, dan transparansi birokrasi. Tapi, jauh lebih penting adalah menumbuhkan kepercayaan. "Trust building merupakan kunci penting menarik investasi," katanya.

Bila semua rencana berjalan lancar, Joyo yakin pertumbuhan ekonomi bisa dipacu mencapai 6,7 persen per tahun. Ini berarti lebih tinggi dari proyeksi pemerintah sekarang, yang hanya 5 persen. Dengan angka itu, tingkat pengangguran bisa diturunkan menjadi 5,1 persen dan kemiskinan ditekan dari 17,4 persen menjadi 8,2 persen.

Kelompok Lembang 9 antara lain terdiri atas Muhammad Abduh, Setyanto P. Santosa, dan Sofyan Djalil. Abduh, ekonom yang bekas pejabat Departemen Keuangan, merupakan konseptor dalam kelompok ini. Sedangkan Setyanto, yang bekas Direktur Utama PT Telkom, dan Sofyan, yang mantan staf ahli Menteri Pendayagunaan BUMN Bidang Komunikasi semasa Tanri Abeng, lebih merupakan pelobi.

Kelompok Lembang 9 mulanya merupakan pendukung Jusuf Kalla. Mereka baru bergabung dengan tim SBY-JK setelah berakhirnya pemilu legislatif, 5 April. Seperti halnya tim dari Partai Demokrat dan Brighten, kelompok ini rajin memasok konsep dan strategi kebijakan ekonomi kepada pasangan SBY-JK.

Salah satu konsep kebijakan ekonomi yang menonjol dari kelompok ini adalah pemberdayaan pengusaha pribumi (affirmative action). Idenya untuk mengurangi kesenjangan antara si kaya dan si miskin. Rencananya, otot si kecil akan dikuatkan dengan pemberian kredit berbunga murah serta pembukaan akses pasar.

Di luar tiga kelompok itu ada juga individu yang secara sukarela memberi masukan konsep ekonomi kepada SBY-JK. Sofyan Djalil menyebut mereka sebagai kaum freelancer. Lin Che Wei mungkin bisa digolongkan dalam kelompok ini. Syahdan, Che Wei bertemu pertama kali dengan SBY dalam seminar yang diselenggarakan Himpunan Pengusaha Muda Indonesia (Hipmi) di Bali, Februari 2002.

Saat itu Che Wei kebetulan sedang dirundung gugatan salah seorang komisaris Bank Lippo karena omongannya soal "penjarahan negara". Ucapan itu terkait dengan gonjang-ganjingnya harga saham bank milik keluarga Riady itu di lantai bursa menjelang penjualan oleh Badan Penyehatan Perbankan Nasional (BPPN).

Di depan forum seminar, SBY menunjukkan simpatinya kepada Che Wei. Tak cuma itu, SBY kemudian mengajaknya bicara secara pribadi. "Beliau menanyakan apa yang dimaksud dengan penjarahan negara," ujar pengamat pasar modal itu. Sejak itu Che Wei merasa klop dengan SBY. Saluran hotline di antara mereka segera terentang.

Tatkala SBY mencalonkan diri sebagai presiden, Che Wei tegas mendukung. Ia bahkan merasa terpanggil memberi masukan soal ekonomi dan investasi. Dan SBY menyambut dengan tangan terbuka. Beberapa kali Che Wei mengajak rekannya sesama praktisi pasar modal maupun ekonom berdiskusi dengan SBY. "Saya enggak mau mengklaim soal kondisi pasar atau ekonomi, biar SBY mendengar langsung dari para pelaku," ujarnya. SBY aktif merespons.

Selama ini Che Wei dan kawan-kawannya sudah memberi masukan kepada SBY dalam berbagai bidang, mulai dari bidang investasi dan pasar modal, ekonomi makro, perdagangan dan industri, sampai kebijakan moneter dan pengelolaan utang negara. Ekonom Chatib Basri, yang pernah diajak berdiskusi, memuji kelompok-kelompok itu.

Mereka, katanya, punya data, perhitungan, dan simulasi yang cermat atas semua konsep yang diajukan, baik untuk persoalan makro maupun mikro. "Memang ada persoalan sensibilitas," kata ekonom UI itu, "tapi setidaknya mereka punya dasar dalam berargumen." Kendati sama-sama memasok konsep dan data, kelompok-kelompok penasihat ekonomi yang bekerja di belakang layar itu tak pernah saling bergesekan.

Sofyan Djalil dengan merendah menunjuk Brighten Institute sebagai tim inti ekonomi SBY-JK. "Mereka yang memberikan hasil riset dan data," katanya. Data itu biasanya digunakan untuk bahan pidato SBY. Kelompok Lembang 9 sendiri, menurut dia, "Cuma sekadar memberi masukan, kerangka, dan data pendukung."

Irsan Tanjung mengaku bisa menerima hadirnya kelompok-kelompok lain yang memberi masukan kepada SBY-JK. "Kompetisi itu baik," ujarnya. "SBY memang tak boleh mendengar hanya dari satu sisi, nanti jadi statis." Kelompok-kelompok penasihat ekonomi itu, menurut Irsan, bersifat saling asah dan mengisi satu sama lain. "Kita salah kalau memandang diri sendiri super," tuturnya.

Dengan prinsip itu, Irsan mengaku selalu menyambut gembira berbagai masukan dari orang dan kelompok. Saat ini ia juga sudah mendengar Kamar Dagang dan Industri (Kadin) Indonesia serta Iluni-FE akan menyerahkan konsep usulan kebijakan ekonomi kepada SBY-JK. "Saya very welcome dengan semua itu," katanya. Kalau begitu, tinggal menunggu saat yang mendebarkan. Adakah di antara para penasihat itu yang akan dilibatkan dalam kabinet, atau tetap berperan sebagai konseptor di belakang layar?

Nugroho Dewanto, Poernomo G. Ridho

Setelah Kalah, Rumah Terbelah

Megawati dan Akbar Tandjung bersikeras akan melanjutkan Koalisi Kebangsaan. Di partainya mereka justru dihadang konflik internal.


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Tak ada alunan Auld Lang Syne, tak ada pula gema sonata perpisahan yang terdengar di ruang sidang pleno MPR/DPR, Senayan, Jakarta, Kamis pekan lalu. Acara Sidang Tahunan 2004 berjalan seperti biasa. Namun atmosfer perpisahan sangat terasa, terutama bagi Ketua MPR Amien Rais, Ketua DPR Akbar Tandjung, Presiden Megawati Soekarnoputri, dan Wakil Presiden Hamzah Haz. "Sidang ini sidang selamat tinggal, perpisahan. Tak ada hal-hal yang sulit, tak ada hal yang kontroversial. Semua serba enak, teduh, smooth dan sejuk," kata Amien saat membuka sidang terakhir MPR periode 1999-2004.

Hari itu Amien, Akbar, Mega, dan Hamzah menjadi pusat perhatian. Maklumlah, mulai 1 Oktober nanti, Amien mengakhiri masa kepemimpinannya selama lima tahun di MPR. Akbar pun akan meninggalkan Senayan karena tak lagi menjadi wakil rakyat. Amien dan Hamzah juga telah tereliminasi dalam pemilihan presiden putaran pertama. Sedangkan Mega hampir dipastikan tidak akan menjadi presiden lagi. Dalam perhitungan sementara pemilihan presiden putaran kedua, suara Mega hanya separuh dari perolehan Susilo Bambang Yudhoyono, kandidat presiden dari Partai Demokrat.

Aura perpisahan ini digenapi Mega. "Untuk kekurangan dan hal-hal yang belum terselesaikan, kepada Majelis yang terhormat dan kepada seluruh rakyat Indonesia yang saya cintai, bersama-sama Saudara Wakil Presiden saya meminta maaf yang sebesar-besarnya," kata Mega disambut tepuk tangan hadirin.

Namun, saat berbicara tentang keberhasilan pelaksanaan pemilu, tanpa melihat teks Mega sempat menyindir pesaingnya. Pasangan Yudhoyono-Kalla dianggapnya terlalu cepat mengklaim kemenangan. Menurut Mega, tindakan itu tidak mengindahkan etika politik dan undang-undang. "Untuk menghormati kedaulatan rakyat, mari kita tunggu pengumuman resmi perolehan suara sesuai dengan peraturan perundang-undangan yang berlaku. Semangat kompetisi harus tetap menjaga etika politik yang bermartabat," ujarnya.

Beberapa hari setelah pemilihan umum presiden putaran kedua, Mega memang tak mau banyak bicara tentang hasil pemilu. Ketua Umum PDI Perjuangan itu masih menunggu 5 Oktober, saat Komisi Pemilihan Umum (KPU) menetapkan presiden terpilih. "Ibu Mega menganggap masih ada peluang untuk menang. Selama (penghitungan) belum selesai dan kalau ada mukjizat," kata Hamzah. "Tampaknya Ibu masih terpukul atas kekalahan ini," kata seorang pengurus PDIP.

Hingga seminggu setelah pemilu, memang belum ada sikap resmi Mega maupun Koalisi Kebangsaan. Menurut seorang tokoh Koalisi Kebangsaan, saat ini para anggota koalisi tengah mengevaluasi hasil pemilu.

Evaluasi pertama digelar beberapa jam setelah pemilu digelar. Senin malam itu, di ruang tamu rumah Mega, di Jalan Kebagusan IV/45, Jakarta Selatan, berkumpul para pentolan partai pendukung Koalisi. Selain Mega, tampak Akbar, Ketua Umum Partai Bintang Reformasi (PBR) Zainuddin M.Z., dan Ketua Umum Partai Damai Sejahtera (PDS) Ruyandi Hutasoit. Hadir pula Sekjen PDIP Sutjipto, Ketua PPP Ali Marwan Hanan, Wakil Sekjen Golkar Bomer Pasaribu, Ketua Pemenangan Pilpres Koalisi Kebangsaan Rully Chairul Azwar, Ketua Pelaksana Koalisi M. Hatta, dan Sekjen Partai Golkar Budi Harsono.

Pembahasan pertama mengenai hasil perhitungan cepat yang telah dilakukan beberapa lembaga peneliti independen dan perolehan suara sementara dari KPU. Meski suaranya sudah mulai tampak tertinggal, menurut seorang peserta rapat, Mega tampak rileks dan santai. "Suara belum bisa dibandingkan karena belum masuk semua dan masih hari pertama. Mari kita tunggu perkembangan terakhirnya," kata Mega seperti ditirukan salah satu peserta rapat evaluasi itu.

Selain membicarakan berbagai kemungkinan perolehan suara, mereka akhirnya lebih banyak bicara tentang gerak apa yang perlu dilakukan setelah pemilu, terutama langkah Koalisi Kebangsaan di DPR nanti. Soal konsolidasi internal partai masing-masing pun dibahas. Mereka menyadari, mutu Koalisi akan meningkat jika konsolidasi di internal partai masing-masing mantap. Koordinator Koalisi, Akbar Tandjung, meyakinkan perlunya tetap seiring sejalan dalam Koalisi Kebangsaan permanen yang digalang selama lima tahun mendatang.

Diskusi lalu berkembang pada soal sikap Koalisi Kebangsaan terhadap pemerintahan mendatang. Mereka merumuskan perihal bentuk oposisi atau check and balance kepada pemerintahan Yudhoyono-Kalla nanti. Menurut salah satu peserta, Akbar berpendapat bahwa di DPR Koalisi Kebangsaan lebih kuat daripada kubu pendukung Yudhoyono. Jika terus "dipersoalkan", bukan tidak mungkin pemerintahan baru nanti bakal jatuh hanya dalam waktu setahun.

Berbagai cara "mempersoalkan" pemerintahan baru di DPR nanti juga dibahas malam itu. "Kami akan senantiasa mempersoalkan penyusunan anggaran," kata seorang pentolan Koalisi. Dalam waktu dekat, misalnya, sudah tersedia ranjau soal subsidi bahan bakar minyak (BBM) untuk bulan Oktober, November, dan Desember sebesar Rp 3,5 triliun, yang kemungkinan akan dicabut.

Evaluasi kedua digelar secara internal di Kantor DPP PDI Perjuangan, Lenteng Agung, sejak pukul 10.00 hingga 15.00. Kali ini hanya pengurus pusat partai banteng bermoncong putih yang hadir. "Meskipun sudah lama mbolos, saya juga hadir," kata mantan Ketua Fraksi PDIP di MPR, Arifin Panigoro. Persis seperti yang dibicarakan di Kebagusan, rapat pagi itu membahas langkah Koalisi Kebangsaan selanjutnya.

Namun, menurut Arifin, pagi itu Mega masih berkeras mengabaikan hasil perhitungan sementara, apalagi quick count. Ia pun tak mau membahas perolehan suara. "Soal angka, no comment, tunggu perhitungan aktual dari KPU," ujarnya menirukan ucapan Mega. Selain itu, Mega juga menegaskan bahwa dirinya akan terus aktif di partai meskipun tidak menjadi presiden lagi.

Pertemuan Koalisi digelar lagi di rumah Mega di Kebagusan, Selasa malam. Selain Mega dan Akbar, tampak Menteri Tenaga Kerja Jacob Nuwa Wea dan sejumlah petinggi Koalisi. Dalam pembahasan materi malam itu, mereka sepakat menyusun tata tertib DPR baru yang akan dibahas dalam Sidang MPR, 1 Oktober nanti. Tata tertib ini dimaksudkan untuk mempermudah menguasai setiap jabatan di parlemen, dari ketua hingga komisi dan badan kelengkapan lainnya. "Pokoknya, nanti setiap usul pemerintah tak akan mudah lolos," kata seorang peserta rapat.

Keesokan harinya Akbar menegaskan bahwa Koalisi Kebangsaan akan berupaya menguasai jabatan-jabatan di DPR. Posisi ketua, wakil ketua DPR dan ketua-ketua komisi akan diisi partai-partai yang tergabung dalam Koalisi Kebangsaan. "Kami bisa mendapatkan semua kursi ketua komisi DPR. Itu akan kami atur," ujarnya kepada Jobpie Sugiharto dari Tempo. Siapa pun yang berkhianat, kata Akbar, akan dipecat dari keanggotaan partai.

Pendeknya, menurut Arifin, meski sudah jelas kalah dalam pemilu presiden, Koalisi Kebangsaan tidak rela jika Yudhoyono memerintah. Karena itu mereka berupaya menggoyang pemerintahannya. Padahal, perolehan sementara suara Yudhoyono jauh mengungguli pasangan Mega-Hasyim Muzadi. "SBY kan didukung mayoritas rakyat Indonesia. Jangan-jangan yang menggoyang hanya segelintir kudis," ujarnya sinis.

Seperti Arifin, Ketua DPP PDIP Roy B.B. Janis berpendapat bahwa Koalisi Kebangsaan tak perlu dilanjutkan lagi. Sebab, koalisi itu tidak mendatangkan keuntungan atau sinergi, tapi malah menyebabkan hilangnya suara Mega di basis wilayah Banteng. "Jadi, lebih baik diakhiri saja," ujarnya kepada Ecep S. Yasa dari TEMPO.

Namun Akbar dan Hamzah bertekad melanjutkan koalisi lima tahun ke depan. "Koalisi jalan terus. Apa yang bisa diperbaiki, ya diperbaiki," kata Hamzah. Soal pernyataan Roy, Akbar hanya berkomentar pendek, "Saya hanya mendengar Ibu Megawati."

Yudhoyono sendiri memilih berkepala dingin. "Sepanjang tujuannya untuk mengontrol kebijakan pemerintah dan tidak melanggar konstitusi, itu sah dan sangat dibutuhkan oleh demokrasi," katanya. Namun, jika tujuan awalnya hanya sekadar untuk membuat pemerintah jatuh, ia menilai langkah Koalisi sudah tidak sehat.

Boleh saja Mega, Akbar, dan Hamzah bersikeras mempertahankan koalisi. Tapi tampaknya mereka tak bisa mengabaikan ancaman kemelut internal partai mereka masing-masing setelah kekalahan Mega mulai merebak. Di PDI Perjuangan muncul ide-ide untuk menggelar kongres luar biasa untuk menggusur kepemimpinan Mega. Di tubuh Golkar konflik semakin terbuka antara kubu Akbar dan kubu Tim Sembilan yang dimotori Fahmi Idris (lihat Hikayat Celeng dan Perseteruan Beringin). Sedangkan di PPP, sebagian pengurus daerah mulai kasak-kusuk meminta Hamzah segera lengser.

Dengan alasan akan membersihkan kader-kader busuk di PDIP, Badan Penelitian dan Pengembangan DPP PDIP menggelar pertemuan di Jalan Tambak pada Kamis malam lalu. Mereka kemudian membentuk Gerakan Pembersihan dan Pemurnian PDIP. "Gerakan ini diharapkan dapat membangun kembali PDIP menjadi partai bersih," kata Ketua Badan Penelitian dan Pengembangan PDIP Kwik Kian Gie. Selain Kwik, hadir pula Roy, Wakil Ketua Balitbang DPP PDIP Subagio Anam, tokoh senior PDIP Abdul Madjid, dan anggota PDIP lainnya.

Menurut Kwik, kekalahan telak PDIP dalam Pemilu 2004 diakibatkan oleh kerja kader busuk yang hanya mementingkan diri sendiri. Tiga tokoh teras PDIP yang dituding adalah Sekjen PDIP Sutjipto, Wakil Sekjen PDIP Pramono Anung, dan Ketua DPP Gunawan Wirosarojo. Mereka menuntut the gang of three itu dipecat dari kepengurusan PDIP.

Yang dituduh tak tinggal diam. Soal tuntutan KLB, Pramono Anung menegaskan bahwa PDIP tidak akan memenuhi tuntutan itu. Sesuai dengan keputusan rapat harian pimpinan pusat Partai, kongres tetap akan diadakan menurut jadwal, yaitu April 2005. "Sudah diputuskan, tidak perlu kongres dimajukan," ujarnya.

Sehari setelah pertemuan yang dimotori Kwik, Sutjipto mengungkapkan bahwa Kwik dan kawan-kawan akan menduduki Kantor DPP PDIP di Lenteng Agung. Dia mengaku mendapatkan informasi soal rencana itu dari salah seorang peserta rapat kubu Kwik. Aksi pendudukan dilakukan setelah upaya tuntutan pemecatan terhadap Sutjipto, Pramono, dan Gunawan tak berhasil. "Kalau enggak, maka digunakan pendekatan fisik. Tapi mudah-mudahan tidak," ujarnya kepada Istiqomatul Hayati dari Tempo.

Menurut Arifin, ancaman pendudukan kantor Partai tampaknya telah menjadi pola PDIP untuk menyelesaikan masalahnya. "Tapi apa Pak Kwik berani memimpin di depan seperti Jacob Nuwa Wea dulu," ujarnya. Dalam Kongres Medan 1992, Jacob yang menentang Ketua Umum Soerjadi mendobrak pintu besi Asrama Haji Medan, tempat kongres dilangsungkan.

Beban berat kini ditanggung putri Bung Karno itu. Ia yang dipastikan kalah dalam pemilu presiden harus berhadapan dengan konflik internal Partai. "Yang penting, setelah ini PDIP jangan menjadi partai nol koma," kata bekas Sekretaris Fraksi PDIP di MPR Sukowaluyo Mintohardjo.

Artinya, Mega perlu berbenah lebih baik, jika ia tidak tertarik mengikuti jejak Amien Rais yang konon akan pindah "gelanggang".

"Setelah ini, Mas Amien ke mana?" tanya Mega kepada Amien Rais, yang berjalan di sampingnya usai sidang MPR.

"Saya kembali ke kampus, aktif lagi di bidang pendidikan dan dakwah."

Mega terdiam. Amien lalu mencoba menghibur.

"Ibu Mega masih muda, masih bisa bertanding lagi pada 2009."

"Lho, memang Mas Amien berapa?"

"Saya sudah 60 tahun, jauh lebih tua dari Anda."

Mega tersenyum kecil.

Mereka lalu berpisah. Mega naik mobil RI-1 yang segera melaju menuju kediamannya di Kebagusan. Amien balik kanan kembali ke ruangannya. Siang itu keduanya berucap salam. Selamat tinggal.

Hanibal W.Y. Wijayanta, Widiarsi Agustina

Let me know what's your idea to stop corruption.

it has to start from us selves, don't pay the police, go to the court if you get stopped by the police... if we count a government to start first, i think we can wait till the year of 6000, but... if we start from us and influence our surrounding that's where we can see it in the next election

cheers

What were the coalition thinking??? Man...thats like childish! do they know if they got elected to represent the people not for their ego materialistic!

sby got elected because of the masses, so does the representative! argh, i think this is because PDIP top guys influences in Golkar!

cheers

it has to start from us selves, don't pay the police, go to the court if you get stopped by the police... if we count a government to start first, i think we can wait till the year of 6000, but... if we start from us and influence our surrounding that's where we can see it in the next election

cheers
Kiki, basically I agree on your point, however don't you think that we are common people in Indonesia are 'forced' to get involved in corruption? I don't mind, let's say, go to kelurahaan, renew my ID card if the procedure is clear and I know that they will do accordingly. I went there, what I found is always excuse that Bapak Lurah is in the meeting. Actually the guy expect me to give him money to 'expedite' the process of printing (!!!) the KTP.

Yeah, i agree with tata's point. I think the extent of corruption in Indonesia is such that if you don't do it, the officials will make your life difficult. :bash:

The difficulty of a self-initiated fight on corruption would be that people prefer to spare themselves from trouble with govt officials. To achieve a considerable result, you need to gather A LOT of hardcore followers. (and unless this is some religious cult, i think its hard to achieve).

Ok, i seldom push responsibilities to other ppl, but i personally think that the person in the best position to stamp down corruption at this moment is SBY. He need to fire those extorting officials, and only then can commoners like us be encouraged to not giving bribes, etc. etc. Even then, i think it'll still take about 5 years to achieve.

Even then, i think it'll still take about 5 years to achieve.
I think it'll take at least an entire generation for Indonesia to eradicate its "culture of corruption"

Even corruption occures in developed countries, but not much like in Indonesia or any other developing countries...

cheers

I heart Malang.


Malang plans sending organic waste to Canada

MALANG, East Java (Antara): The Malang mayoralty administration is planning to send organic waste to Canada to be recycled into fertilizer in cooperation with a private company, a local official said on Monday evening.

"The mayoralty will cooperate with PT Semeru Bio Fertilizer, a subsidiary of a foreign company, to process the waste in Canada and turn it into fertilizer," Malang mayoralty head of sanitaryagency Adjumain said.

"We expect we can finish the memorandum of understanding soon so we can start the feasibility," he added.

Malang city produces an average of 700 tons of waste daily with some 65 percent of it organic waste.

"The mayoralty will provide a plot of land 3.5 hectares to 4 hectares in the Lowokdoro dumpsite with an initial shipment of 220 tons (of waste) each day," said Adjumain.

Meanwhile, Malang city spokesman Gatot Setyobudi said the private company would provide an investment of Rp 200 billion (US$21.9 million) in the project.

"The mayoralty will only provide the waste and get Rp 400 per ton plus a 1.5 percent fee from the company's gross income for 20 years," he said.

"The city will get additional 10 percent from the net profit for the first five years and 20 percent from the sixth year on."

The officials, however, did not explain why the organic waste had to be sent to Canada for processing instead of setting up a processing plant here.

*Quoted from the Jakarta Post*

Indonesian govt debt remains sustainable: IMF

JAKARTA (Dow Jones): Indonesia's public debt burden remains sustainable, and the country doesn't need to seek debt rescheduling from international lenders, the International Monetary Fund said Wednesday.

"Of course, any new government would like to have more resources it can allocate for other projects, but the (Indonesian government's) debt burden seems to remain sustainable over the medium term," Stephen Schwartz, the IMF's senior resident representative for Indonesia, said at a business seminar Wednesday.

A new government headed by former security minister Susilo Bambang Yudhoyono is set to take over from incumbent President Megawati Soekarnoputri Oct 20.

Several analysts have suggested that the new government must seek debt rescheduling from international donors next year so that it can allocate more funds for development projects.

Official donors grouped under the Paris Club have agreed to rescheduling Indonesia's debt several times in the wake of the 1997-98 Asian financial crisis. But the country is no longer eligible for such rescheduling after it graduated from an IMF bailout program at the end of last year.

The current government has reduced the level of public debt to around 60% of gross domestic product from its peak in 2000, when it was equivalent to the country's entire GDP.

Next year, the government must pay around $5.1 billion in offshore debt, or around 12% of the total expenditure targeted in next year's state budget.(*)

Indonesian Shares End At Record High On Benign Inflation

JAKARTA (Dow Jones)--Indonesian shares ended at a record high Friday helped by September's benign inflation report and higher markets across Asia, dealers said.

"The news has been very good all day long," said a trader. "Gains occurred on almost every blue chip."

The Jakarta Stock Exchange Composite index ended up 15.771 points, or 1.9%, at 835.905, beating the previous closing high of 823.858, recorded Sept 21.

Gainers led decliners 101 to 29, with 73 stocks unchanged. Volume was 1.4 billion shares valued at IDR1.04 trillion.

The Central Bureau of Statistic announced Friday that inflation in September eased to 6.3% compared with 6.7% in August. Benign inflation may ease pressure for the Central Bank to increase domestic interest rates more aggressively, analysts said.

Nickel miner Aneka Tambang led gainers, up 9.09% to IDR1,500 on higher nickel prices. Noodle maker Indofood gained 7.41% to IDR725.

Telecommunication company PT Indosat ended up 2.37% at IDR4,325. Bellwether PT Telekomunikasi Indonesia, Indosat's rival, was up 1.2% to IDR4,200.

Declining pressure for a rate hike helped sentiment on banks, dealers said.

Bank Central Asia was up 1.25% to IDR2,025, while Bank Danamon gained 2.68% to IDR3,825.

Cigarette maker Gudang Garam was up 1.54% at IDR13,200. Its rival Hanjaya Mandala Sampoerna gained 2.46% to IDR6,250.

Dealers said they expect the market to continue trading higher next week, but uncertainties over oil prices have the potential to damp sentiment.

Fitch ups RI rating outlook to 'positive'
The Jakarta Post, Jakarta

Global rating agency Fitch Ratings has raised Indonesia's rating outlook from stable to positive, as the nation's political risks had been reduced after the conclusion of the general and presidential elections.

The agency did not say when it would actually upgrade the nation's credit rating, but said in a statement that "Future rating upgrades lie in the formulation and implementation of a strong reform agenda."

Nevertheless, the completion of a six-month period of free and fair elections marked a major step forward for Indonesia, as it posed a very strong mandate for reform, it added.

Fitch last upgraded Indonesia's long-term foreign-currency rating in 2003 by one notch to B-plus, still four levels below investment grade.

Late last month, following the final round of the presidential election, rating firm Standard & Poor's said it might upgrade the country's rating on condition that the government continued efforts to bolster economic growth.

Indonesia took a major step this year as a democratic nation by holding its first direct presidential election on Sept. 20.

The General Elections Committee (KPU) officially named Susilo Bambang Yudhoyono victor over incumbent President Megawati Soekarnoputri on Monday, with inauguration scheduled for Oct. 20.

Fitch said an improved economy was another reason for its positive notes on Indonesia, citing the nation's steady economic growth and continued fiscal consolidation.

It added that Indonesia, whose economy is expected to grow by 4.8 percent this year, might contain its debt-to-gross domestic product (GDP) ratio at 68 percent, far below its peak of 100 percent in 2000.

Rating agencies are the latest to have expressed high hopes in Indonesia's future economy following the election.

Earlier, Morgan Stanley expressed confidence that the peaceful election and Susilo's emergence as the new president, would bring about improvement in the economy, which -- in terms of growth -- was still lagging behind its neighboring nations.

In its latest assessment on Indonesia's economy, the global investment bank was upbeat that, if Susilo fulfilled his campaign promises, the economy would benefit greatly from a revival of investment along with the return of investor confidence.

In order to boost investment, Indonesia needs either a pickup in foreign investment, a return of capitals that have fled the country or an upswing in domestic investment, the bank said in a statement sent to The Jakarta Post.

"Given the stable political landscape, post-elections, coupled with the likely scenario that Mr. Susilo begins to deliver on the promises within the first 100 days of office, an increase in investment from all three fronts could materialize," it said, and would thus lift the prospect of growth.

The statement noted that Susilo's promises centered on three objectives: First, boosting the economy through professional economic management and by prioritizing poverty and unemployment reduction; second, enhancing domestic security and reducing Indonesia's geopolitical risk; and third, raising the fight against corruption.

Indonesia Ratings Depend on Yudhoyono's Ability to Boost Growth

Oct. 7 (Bloomberg) -- President-elect Susilo Bambang Yudhoyono's ability to keep his campaign promises to boost investment and cut the deficit will determine the credit ratings of Southeast Asia's largest economy, Standard & Poor's and Moody's Investors Service said.

Yudhoyono, 55, a former army general, was declared the winner this week of last month's presidential election after securing 61 percent of the popular vote. The election ousted incumbent Megawati Soekarnoputri, 57.

Yudhoyono, who takes over on Oct. 20, has pledged to accelerate economic growth, create jobs and crack down on terrorism in the nation of 235 million people. He inherits a $208 billion economy in which an estimated 10 million people are jobless.

``We need to have an effective administration,'' Paul Coughlin, managing director for Asia-Pacific corporate ratings at Standard & Poor's, said in an interview. ``We will keep an eye on things over the next couple of months.''

An upgrade of credit ratings, used by investors to gauge how likely it is that a borrower will be repaid, makes it cheaper for governments and companies to raise money. Investors typically pay higher prices for bonds viewed as creditworthy.

S&P rates Indonesia B and Moody's rates the nation B2. Both are five levels below investment grade and on par with Pakistan's.

Standard & Poor's and Moody's raised Indonesian ratings in the past year on a consumption-led improvement in the economy, which is still struggling to lure investment. Indonesia's deficit is budgeted at 26.3 trillion rupiah ($2.9 billion) this year, when the economy is forecast to grow 4.8 percent.

Rating Forecast

Investors are betting Yudhoyono will be able to fulfill his promises to help the country finally overcome the damage caused by the 1997 Asian financial crisis. The economy is forecast to grow 5.4 percent next year.

``We are expecting a one-notch upgrade in three to six months,'' said Singapore-based Edwin Chungunco, a fund manager at Citigroup Asset Management, which oversees $520 billion in assets worldwide. Chungunco may add to Citigroup's holdings of Indonesian bonds.

Moody's, which has a stable outlook on Indonesia, may raise the rating, said Steven Hess, a New York-based senior credit analyst at Moody's.

``The move toward a smooth democratic process in Indonesian politics is a positive for the country's creditworthiness,'' Hess said in an e-mail. ``From the rating perspective, the country needs to achieve higher rates of economic growth to ensure political and social stability.''

Declining Debt

Indonesia's debt may fall to 68 percent of gross domestic product this year from a peak of 100 percent in 2000, the rating company said. Inflation, which climbed as high as 78 percent in 1998, was 6.3 percent in September.

The Jakarta Composite Index, which rose to a record this week, fell 0.6 percent to 856.060 as of the 4:00 p.m. close in Jakarta yesterday. The rupiah, which gained 1.9 percent in the past month, traded at 9,105 against the dollar.

Last year's rating upgrades, a response to progress in reducing the fiscal deficit, debt levels and increasing economic growth, raised interest in Indonesia, which in March sold $1 billion of bonds. It may sell more overseas bonds next year.

``They have enough time to get a rating upgrade and go for an offering in the market,'' Citigroup's Chungunco said. Indonesia's dollar bonds are ``trading very tight at the BB- level,'' which is three levels below investment grade.

The yield on Indonesia's dollar bond maturing in 2014 fell to 7.1 percent, or 2.93 percentage points more than similar maturity U.S. Treasuries, from a high of 9.23 percent on June 3, according to Deutsche Bank yesterday.

Challenges

Yudhoyono has indicated he will focus first on labor and tax laws that curb investment. That may bode well for Indonesia's ratings, S&P's Coughlin said.

Overseas investment approvals fell 30 percent to $3.76 billion in the eight months ended Aug. 31, Investor Daily Indonesia newspaper said on Sept. 16.

The Asian Development Bank estimates Indonesia needs $150 billion of investment in oil wells, factories and infrastructure over the next decade to raise growth to an average 6.5 percent a year.

``The biggest challenge facing the new president is the investment environment in Indonesia,'' said Hess at Moody's. ``Increased investment is very important for the medium-term growth prospects.''

Indonesia cries out for help
By Bill Guerin

"We need help. I am not ashamed to say this. We need to go to donor countries, and I doubt anyone will say no," Irzan Tandjung, head of a new economic council set up to help Indonesia's president-in-waiting Susilo Bambang Yudhoyono attract investment to set the economy back on track, told a meeting of diplomats in Jakarta on Thursday.

The move by Tandjung, 67, who also is chairman of Yudhoyono's small Democratic Party and a retired professor of economics, was seen as a signal to the market that the new government is determined to take on the country's problems. If the successful election process is now followed by an orderly transition of government, Indonesia's image overseas will be boosted after serious concerns about terrorism, corruption and separatist conflicts saw foreign direct investment fall by one-third to US$3.3 billion in the first seven months of this year compared to the last.

Though Yudhoyono has an unassailable lead in the vote count, incumbent Megawati Sukarnoputri has not conceded defeat so far. The General Elections Commission (KPU) has started verifying the results and will announce the winner on Wednesday. The 55-year-old retired general is due to name his cabinet on October 20 - the day he and his vice-president, Jusuf Kalla, are inaugurated - and will hold his first cabinet meeting a day later.

He is widely expected to name a cabinet "weighted towards professionalism", and to avoid appointees "who only think politics," senior aide Rachmat Witoelar was recently quoted as saying. Yudhoyono has told the Indonesian Chamber of Commerce and Industry (Kadin) that he plans a "troika" of government, business and the community, which would sit together at least every three months to discuss policy directions.

Stepping up efforts to boost investment to spur economic growth in Asia's slowest-growing developing country is high on the agenda, and Yudhoyono has indicated that his first priority will be to create jobs. Tandjung conceded that this would be a tough challenge for the new leader: "It relates to the economy, politics, legal framework and taxation."

Though the $208 billion economy is Southeast Asia's largest, Tandjung pointed out that the new government has no money to fund programs. "The biggest problem is money," he said, speaking only a month before the Consultative Group for Indonesia (CGI) meets to agree on how much to loan Indonesia for 2005. The CGI pledged $2.84 billion for this year, the first since Indonesia's exit from the International Monetary Fund (IMF) program.

Though the Asian Development Bank says Indonesia needs $150 billion of investment over the next decade to raise growth to an average 6.5% a year, the IMF forecasts the economy will still grow as much as 5.5% next year, in line with the government's forecast of 5.4% growth. The IMF also is concerned about the jobless. "Indonesia has great potential. There is frustration that growth has not picked up to the potential level," Stephen Schwartz, the fund's Indonesia representative, said in a recent interview in Jakarta. "The growth rates we have seen, while respectable, are not enough to absorb unemployment."

Given the volatility of the country's politics, ratings agency Standard & Poor's (S&P) last month said the development of a workable relationship between the executive and the parliament would be "the key to success". The Nationhood Coalition, comprising Golkar, the Indonesian Democratic Party of Struggle (PDI-P) and the United Development Party (PPP), on paper accounts for around 60% of the 550 seats in the House of Representatives (DPR) and has promised parliamentary opposition. Backed by the coalition, Golkar deputy chairman Agung Laksono was elected speaker of the House of Representatives on Saturday.

Ultimately, recovery will depend not only on new investment but also on higher productivity. Neither is encouraged by many of the articles of the new labor law implemented by Megawati. John A Prasetio, deputy chairman of Kadin, claims some 40% of foreign investors had a negative perception of the current labor regulations, compared to 7% in Malaysia.

Though the new law set a more democratic industrial relations framework than in the past, it discouraged businesses by making it very hard to sack employees. The law also has failed to stem unemployment, which is growing by 2%, or between 2 million and 3 million annually. Many of those out of work are high school and university graduates. However, in April Jacob Nuwa Wea, minister of manpower and transmigration, dismissed the unemployment data and projections from the National Development Planning Board (Bappenas) and the Central Bureau of Statistics (BPS). These were not only inaccurate and misleading, he said, but had discredited the government and could heighten public unrest. The two agencies are not directly accountable to the government.

Bappenas had predicted that the number of the fully unemployed would increase to 11.2 million in 2005 from 10.8 million in 2004 and 9.1 million in 2003, while the number of the disguised unemployed - those who work less than 35 hours a week - would soar to almost 49 million in 2005 from 42 million in 2004 and 38.5 million in 2003. The BPS predicted the workforce would increase to 95.5 million in 2005 from the current 91 million. Some 44%, or 42 million of the workforce, it says, is employed by the agricultural sector, 13% by manufacturing and the remaining 42% accounted for by other sectors and the unemployed.

But Wea said the data collected by his ministry showed the number of jobless this year stood at only 9.6 million, with the figure up to January 2003 at 9.1 million and the remaining 500,000 coming from the 2.5 million new job seekers in 2003 who could not find work. The minister conceded, though, that the government had failed to attract many foreign investors to Indonesia, saying this was due to security disturbances, the absence of legal certainty and rampant illegal fees in the region.

In any event, the incoming president plans to repeal the decree, Tandjung told the diplomats, and he also will review tax laws that discourage investment. The Japan External Trade Organization (Jetro) has listed Indonesia among the most unattractive countries for investment, with 72% of its business respondents complaining about the country's tax regime.

Megawati's administration backed off from reducing fuel subsidies in this election year, thus leaving the new government with the unpleasant work. "Because it wasn't done gradually, we now face a problem," Tandjung said. "We have to do it gradually to prevent a shock to the system. For kerosene, it's okay but there's no reason to subsidize some fuels."

Predicted levels of fuel subsidies will cost more than twice the forecast budget deficit of Rp26.3 trillion ($2.9 billion). The projected fuel subsidy has soared to Rp59.2 trillion since oil prices hit record highs, more than four times the Rp14.5 trillion projected at the beginning of the year. If the subsidies are lifted, production costs and other costs of doing business will, of course, increase and a set of tax breaks will be needed to compensate for the subsidy reductions. Compensation schemes for the poor are also expected, to cushion the costs of adjustment.

The poor, almost half the population according to the World Bank, use paraffin (minyak tanah) for cooking, and heavy subsidies for this basic essential will remain in place. Reliable law enforcement and legal certainty are also major obstacles to investment recovery in the $208 billion economy, which the outgoing government expects to grow 4.8% this year - the fastest pace in four years, after a 4.5% expansion last year.

The IMF has been pressing for sell-offs of nationalized banks, spending controls, and the containment of inflation, which stood at 6.7% in August. Sales of banks and other state assets will help narrow the fiscal deficit to 1.3% of gross domestic product this year, or Rp26.3 trillion, and to 0.8% next year, balancing the budget by 2007, according to the outgoing government's predictions.

The IMF has said a great deal has been achieved in strengthening the financial system, but one of the challenges for the new government would be to continue the process of turning the banks over into private hands.

Bill Guerin has worked for 19 years in Indonesia as a journalist and editor. He specializes in business/economy issues and political analysis related to Indonesia. He has been a Jakarta correspondent for Asia Times Online since 2000 and has also been published by the BBC on East Timor. He can be reached at softsell@prima.net.id.

Yudhoyono's big challenge: Get rid of graft
By Janadas Devan

THIS is how business used to be conducted in Suharto's Indonesia, according to Mr Adam Schwarz in his excellent book, A Nation In Waiting:

In September 1988, the government announced a US$300 million (S$600 million) project to add 300,000 telephone lines in Jakarta, and invited suppliers of telephone switching equipment to submit bids for the project. Knowing full well they didn't stand a chance without someone on the inside pressing their case, major international companies made a beeline for then president Suharto's children.

Japan's Fujitsu chose second son Bambang as its agent, the United States' AT&T picked eldest daughter Tutut and an NEC-Sumitomo joint venture retained youngest son Tommy.

With so many Suharto children all eyeing the same honey pot, officials had trouble choosing between them. Then they hit upon a simple solution: They doubled the size of the project, from US$300 million to US$600 million. They awarded one half to NEC-Sumitomo, and the other half to AT&T.

Fujitsu lost out, but Mr Bambang was kept happy - his Bimantara Group was made the local manufacturer for the project.

A second local manufacturing contract was given to a company jointly owned by Tutut and a brother of Mr B.J. Habibie, then the Minister for Research and Technology and later Mr Suharto's hapless successor.

The honey was distributed more or less equitably and all were happy.

Indonesia, however, picked up the hefty bill. The Suharto regime's corruption was a disaster for Indonesia in many ways: Investor confidence was shattered, project costs were inflated, the public became cynical and economic development was retarded.

But as Mr Schwarz also went on to note: 'It could be said in defence of Suharto's children that they could be worse. When they built a toll road, for example, they do it expensively, not terribly efficiently and probably in place of someone more qualified. But the road does get built. In contrast to, say, the worst examples of African kleptocracies, government funds spent on Mr Suharto's family are not totally wasted. Most of the time, anyway.'

In retrospect, it can also be argued that the corruption of the Suharto era was at least more efficient than the corruption of the post-Suharto era. Mr Suharto, after all, had a limited number of cronies and family members. Investors who wished to do business in Indonesia knew who to approach.

Just as other countries had one-stop investment centres, Mr Suharto's Indonesia had one-stop corruption centres. Pay off a crony, a Tutut or a Tommy, and you could be fairly certain things would happen. The roads got built, the telephone lines got laid (albeit, at double the cost), and Indonesia's economy grew at a fairly brisk pace.

One unintended consequence of democracy in Indonesia is that corruption, too, has been democratised. Since power is now diffusely distributed, many more people have opportunities to abuse it. Since Jakarta has devolved considerable authority to the provinces, there are now more opportunities for rent-seekers. Investors can no longer pay off some potentate in Jakarta and expect things to happen elsewhere.

Last week, in Jakarta, I heard numerous horror stories: Businessmen complained of difficulties in transporting goods from one part of the far-flung archipelago to another. Newly-empowered tinpot dictator-bureaucrats in the provinces have imposed numerous levies and regulations, retarding trade.

Investment bankers spoke of 'legal uncertainty', referring to how even major multinational companies have been subjected to harassment by newly- empowered courts. And a former attorney-general spoke despairingly of the 'high cost of legislation', his euphemism for how money has to be spent to grease the passage of laws in a divided legislature.

The result of all this is that investors have yet to flock back to the country, six years after Mr Suharto's fall.

Alone among the 1997-98 crisis countries, Indonesia has experienced a net negative outflow of capital every year since 1998. It is the only Asean country that has yet to recover its pre-crisis growth rate.

More than 38 million of its people live on less than US$1 a day, and another 100 million live on less than US$2 a day. About 41 million, or 10 times the population of Singapore, are unemployed or underemployed.

President-elect Susilo Bambang Yudhoyono, elected to office with a staggering 60 per cent of the votes, has a herculean task before him.

There is little doubt what his priorities must be. Indonesia's economy must grow by at least 7-8 per cent a year if the unemployment rate is to come down. It cannot grow at that pace without investments. Those investments are not likely to be forthcoming unless there is a minimal degree of 'legal certainty'. In other words, Dr Yudhoyono must attack corruption.

Here's an indication of the challenge he faces: Last week, the country's Supreme Audit Agency reported to the outgoing Indonesian parliament its findings of irregularities in the accounts of 377 state institutions.

The institution with the highest number of irregularities was none other than the Attorney-General's Office. This biggest of the 'money abusers', the agency reported, had misused 95 per cent of its non-taxable funds last year.

Quis custodiet ipsos custodes - Who shall guard the guards? With 60 per cent of the votes, Dr Yudhoyono has the mandate to become the country's one-stop guard. He may well be democracy's last chance there. If he fails, that army of 41 million unemployed may become fertile recruiting ground for militant Islam.

http://www.adb.org/Documents/Books/ADO/2004/update/update2004-indonesia.pdf

South Korea's KEPCO eyes investment in Indonesian power plant

JAKARTA (AFP): South Korea's state-owned Korea Electric Power Corp. (KEPCO) is considering investing in the construction of a US$350 million steam power plant in Indonesia, a top Indonesian official said on Sunday.

Eddie Widiono, the president of Indonesia's state electricity company PT. Perusahaan Listrik Negara (PLN), said KEPCO had expressed an interest in building the plant near a planned PLN liquefied natural gas (LNG) terminal in Cilegon, Banten province.

"The wishes of KEPCO to build the gas-fueled steam power plant in Cilegon is based on the certainty in gas supply from the LNG terminal," Widiono said after a ceremony to mark national electricity day at his office.

The power plant will have a capacity of 740 Megawatts and is expected to operate in 2009.

The LNG terminal receiver currently being built in Cilegon will have an initial capacity of about 400 million cubic feet of gas per day and is expected to begin operation in 2007-2008, officials have said.

Widiono said KEPCO had made a proposal for the steam power plant. He did not elaborate. (***)

Batam investment forum to be held in NY
The Jakarta Post, Jakarta

The American Indonesian Chamber of Commerce (AICC) in cooperation with the Batam Industrial Development Authority (BIDA) will hold an investor forum in New York on Oct. 26 to highlight, among other things, the potential of the Batam Island Free Trade Zone.

According to Bloomberg, the forum will also discuss local autonomy and other important developments in Indonesia, including on the country's successful first-ever direct presidential election.

Speakers will include former Indonesian ambassador to the U.S. Arifin Siregar, and BIDA chairman Ismeth Abdullah.

The Indonesian Consulate General in New York will also organize one-on-one meetings between interested investors and members of the Batam delegation.

The forum comes at a crucial time for Batam and existing investors on the island as the outgoing government failed to reach an agreement with the House of Representatives on the status of Batam as a free trade zone (FTZ).

Last month, the House endorsed its own version of a bill conferring FTZ status on Batam Island, despite the opposition of the government, which has proposed its own legislation on the issue.

Without the government's approval, the law cannot tale effect, creating further uncertainty for investors on the island, which since 1978 has been promoted by the government as an industrial bonded zone to attract foreign investors. It is now one of the most attractive manufacturing and industrial locations in the Southeast Asia region, playing host to some 600 foreign companies and absorbing over US$3 billion in foreign investment.

Batam, which is located about 30 kilometers southeast of Singapore, is also the country's second most popular foreign tourist destination.

One of the disputed articles in the government-proposed bill concerns limiting FTZ status to only specified industrial areas on the island, to be known as "enclave FTZs", while the House-proposed bill grants the whole of Batam Island full FTZ status. The government has argued that extending full FTZ status to the whole Batam would cause envy in other regions not privileged with FTZ status.

Susilo's budget revision plan hailed


Rendi A. Witular, Jakarta

Experts agree on the plan by president-elect Susilo Bambang Yudhoyono to revise the 2005 state budget, citing the urgency to revise the crucial oil price assumption to better reflect current developments in global oil prices.

Adjustments to the oil price are needed for the next government to ensure a more accurate benchmark to set other key assumptions in the state budget; chief among these is the fuel subsidy, as well as revenue from oil and gas and revenue-sharing between central and local governments.

"The current economic situation has changed quite fast, so the revision (of 2005 state budget) is needed.

"I think the most important assumption to be immediately revised is the price of oil," Minister of Finance Boediono told reporters on Sunday.

Boediono was commenting on Susilo's victory speech on Saturday, in which he spelled out an immediate need for his administration to revise the 2005 state budget during his first months in office.

Boediono said that the 2005 state budget was not made to commit the new government to it, but was more as a legal backup to ensure the availability and sustainability of the state's finances during governmental transition.

In the first 2005 state budget draft, the oil price was set at an annual average of US$24 per barrel. Based on that, revenue from oil and gas would be fixed at Rp 47.1 trillion ($5.23 billion) and revenue sharing for regional governments at Rp 31.2 trillion.

The oil price assumption is especially crucial in the calculation of the oil subsidy for next year, which is earmarked at Rp 19 trillion.

Mandiri Securities head of research Kahlil Rowter also agreed that the upcoming administration needed to revise next year's state budget, primarily the oil price assumption, as $24 per barrel was unrealistic. The world oil price closed at over $50 on Friday.

Kahlil said that a realistic oil price assumption would help the government to cut fuel subsidies at a more precise level, and to accurately assume the state budget deficit level, which was earmarked at Rp 16.8 trillion.

"Crude prices have been averaging more than $40 a barrel at present and are projected to remain at that level next year. The most reasonable oil price would be at around $35 a barrel," said Kahlil.

"Changes in the assumption will eventually cause overall changes for state revenues and expenditures," he said.

For every dollar that the world oil price is above the assumption, the impact will be between Rp 100 billion to Rp 150 billion in extra expenditure requirements, according to the Ministry of Finance.

Rocketing oil prices mean that the government has to allocate more of the state budget for fuel subsidies. Even based on an oil price assumption of $36 in the 2004 state budget, fuel subsidies were budgeted at Rp 59.2 trillion, four times higher than the Rp 14.5 trillion projected in the 2005 draft earlier this year.

The central government pays for all of the fuel subsidies, while oil and gas revenues must be shared with regional administrations.

Kahlil, however, was concerned with a possible lingering process for the budget revision, as Susilo could choose a whole new group of people for his economic team. In addition, most members of the House of Representatives' budget commission were new to the process.

"I fear that the revision will take a long time, because they have to start again from scratch. The revision should be concluded before January, since the state budget should be fully implemented next year," said Kahlil, adding that a delay in finishing the revision would cause uncertainties for the business community. Editorial -- Page 6

Indonesia's mobile penetration to triple by '07

October 11, 2004

More than 20 million Indonesians now own mobile phones, roughly about 8% of the country's 220 million population. Research and Markets expects the country to have 60 million mobile subscribers by 2007.

A report by the research firm says the Indonesian market is attracted to CDMA-based WLL services due to the lower costs.

PT Mobile-8 Telecom (Mobile-8) recently launched Indonesia's first CDMA service. Mobile-8 is targeting one million subscribers by the end of 2004, and 2 million lines by the end of 2005.

The report notes that Indonesia mobile users have a passion for SMS with a text to voice usage ratio of 10:1.

I thought you might find this interesting, the Indonesian ambassador in South Africa is leading a group of over 30 businessmen from South Africa, Congo, Mozambique and others in the region to Indonesia. They will attend the Resource Indonesia fair and afterward, they will go to different cities for networking purposes. It is a great opportunity for Indonesia and the region to increase trades. Africa is one continent that we, Indonesian, has ignored for far too long. It has many opportunity for us and we should not only trade, but also invest in the continent. Malaysia has entered the south African economy for almost a decade now. Half of the real estate in the Guateng area is owned or run by Malaysian companies.

Susilo told to fix investment climate

Zakki P. Hakim, The Jakarta Post, Singapore

Singapore is hopeful that Indonesia's business climate will improve following its successful presidential election, Prime Minister Lee Hsie Loong said here on Monday.

"In Indonesia, a new president is elected. The markets have reacted positively to the election of Dr. Susilo Bambang Yudhoyono as president, and investors are looking forward to an improvement in the business climate," Lee said in part of a speech to open the annual investment and trade forum, the Global Entrepolis @ Singapore (GES) 2004.

The five-day event involves some 10,000 participants from 30 countries, including a delegation from the Indonesian Chamber of Commerce and Industry (Kadin).

In a brief meeting later in the day with Kadin chairman M.S. Hidayat and other officials, Lee said he also expected Indonesia would recover from its economic problems under Susilo, who has so far received a positive response from financial markets.

"Next month, the Prime Minister will visit Jakarta to congratulate the new president," Hidayat said, adding that Singapore would soon urge a meeting with senior officials and business players from the private sector of both countries.

Susilo will be sworn in on Oct. 20, when he is also expected to announce his Cabinet.

Analysts have said Susilo needed to form a credible and business-friendly Cabinet to indicate to the investment community that he was determined to resolve the various uncertainties that have discouraged investors from entering the country.

Singapore is a major source of foreign investment, which is crucial for accelerating economic growth, but which has been weakening over the past few years.

According to the Investment Coordinating Board, foreign direct investment from the city-state reached US$692.4 million last year through 5,000 companies, making it the fifth largest investor to Indonesia.

For the past couple of years, Singaporean firms have been aggressive in buying key local assets. Recent acquisitions include: 42 percent shares in telecommunications company PT Indosat by Singapore Technologies Telemedia; 62 percent shares in Bank Danamon by a consortium led by Temasek Holdings; ownership of Bank International Indonesia by a consortium comprising Temasek and South Korea's Kookmin Bank; and 34.3 percent shares in automotive giant PT Astra International by Singaporean auto firm Cycle & Carriage.

Meanwhile, Singaporean Foreign Minister George Yeo urged in an earlier meeting with Kadin officials that the next government resolve legal uncertainties, complex investment regulations and unfavorable labor laws to attract new investment to the country.

"Investment regulations have been confusing businesses," Hidayat quoted Yeo.

Yeo also promised that Singapore would encourage its businesses and their partners to invest in Indonesia if the new government simplified regulations and ensured fair competition.

GES expects to attract more than 3,000 leading executives, entrepreneurs and venture capitalists from across the globe, with high participation from India and China, as well as the U.S., Japan, Russia, Korea and regional groups from Southeast Asia, the Middle East and the European Union.

Indonesia foreign investment surges in Sept

By Adriana Nina Kusuma and Harry Suhartono

JAKARTA, Oct 12 (Reuters) - Indonesia's foreign investment approvals, seen as a signal of confidence in the economy, surged to a 2004 high of $4.24 billion in September, led by the chemicals and pharmaceuticals sector.

The figure dwarfed the previous monthly high of $799 million in April and took the accumulated approvals for the first nine months of 2004 to $7.99 billion, up 24 percent from a year earlier.

Foreign investment approvals in chemical and pharmaceuticals jumped to more than $3 billion in September alone, up sharply compared with $196.6 million for the first eight months of 2004.

The investment approval for the sector in the first nine months accounted for 42 percent of total approvals over the nine-month period.

However, the state investment agency declined to comment on the details of the September investment approvals in chemicals and pharmaceuticals.

Some analysts said expectations Bambang Susilo Yudhoyono would win the Sept. 20 presidential election had boosted foreign investor confidence.

The pro-business candidate took more than 60 percent of the vote in the run-off against incumbent Megawati Sukarnoputri. He is scheduled to be sworn in on Oct. 20.

"We have expected this. The figure should go up since investors can predict the outcome of the presidential election," Anton Gunawan, Jakarta-based economist at Citigroup, told Reuters.

MORE INVESTMENT SEEN CRITICAL

Domestic investment approvals rose nearly 44 percent to 25.13 trillion rupiah ($2.76 billion) in the first nine months of 2004 from 17.5 billion rupiah a year earlier.

The value of approvals for new foreign investment projects and approvals to expand foreign-investment projects were double that of a year earlier.

Despite the increase, the Jan-Sept approvals were still relatively low compared with before the Asian economic crisis of the late 1990s.

The value of foreign investment approvals for the whole of 1997 were close to $34 billion.

Economists say it is critical Indonesia returns to similar levels of investment to help generate economic growth of more than six percent a year, compared with the current four to five percent, to reduce unemployment and under employment.

Economists estimate 40 percent of Indonesia's 100 million strong labour force are jobless or under employed.

Yudhoyono has pledged to boost foreign investment by, among other measures, cutting unnecessary government rules and regulations and fighting corruption and terrorism.

High profile attacks blamed on Islamic militants against Western targets, beginning with the Bali blasts that killed 202 people two years ago, have undermined investor confidence.

The value of approvals for domestic new projects soared 58 percent while approvals to expand domestic invested projects jumped 59 percent.

finally some good news in the investment department! :)

Let's hope the momentum continues.

Finally, our manpower minister is talking some sense! I don't dare to imagine how many more companies would close down and relocate, and how many people would be laid off if this stupid absolutely nonsense decree was implemented, not to imagine its effect on investor confidence & the economy...read below:



Govt delays new ruling on minimum wage


Ridwan Max Sijabat, The Jakarta Post, Jakarta

Outgoing Minister of Manpower and Transmigration Jacob Nuwa Wea has issued a circular delaying the implementation of the use of a more humane criteria than basic physical needs in determining regional minimum wages until 2006.

Article 89 of Law No. 13/2003 on labor, which will take effect in January 2005, stipulates that the provincial minimum wages determined by governors shall be determined on the basis of "humane physical needs", which is presumed to be far higher than the minimum basic needs.

The issuance of the circular means that any wage increase would be nominal as it mainly aims at offsetting the effects of inflation, not increasing workers' purchasing power.

The circular, issued last week amid intensive tripartite discussions on minimum wages in provinces, said the government had decided to delay enforcing the labor law due to the prolonged economic crisis.

"The government decides to delay enforcing the new ruling on minimum wages because of continued economic difficulties and because workers and employers have yet to submit detailed information about humane physical needs," Minister Nuwa Wea told The Jakarta Post here on Tuesday.

Nuwa Wea said the circular implied that there would be no real increase in the minimum wages in 2005 and workers should be prepared for such conditions.

Workers, employers and provincial administrations are conducting intensive tripartite discussions to set the provincial minimum wages for the 2005 fiscal year.

According to the labor law, the minimum wages shall be announced to the public in December and will take effect in January the following year.

A bipartite forum representing workers and employers in Jakarta had recently agreed to raise the minimum wage to Rp 1.2 million (US$130) from the current Rp 671,550, but Minister Nuwa Wea called for a review for fear that it would encourage poor provinces to propose intolerable wage hikes.

Industrial relations expert Payaman Simanjuntak said the ministerial circular was regrettable and not a wise solution for the conflicting interests of workers and employers.

He argued that the government could encourage the National Wages Research Board to set realistic components of the humane physical needs to allow major companies to pay their workers at least in line with the new ruling.

"The law has prepared a mechanism for small companies and those facing financial difficulties to be exempted from the new law," he said.

Payaman, who is also former director general of labor industrial relations and supervision at the Manpower and Transmigration Ministry, said that the minimum basic needs was no longer an appropriate guide in determining the minimum wages as its components were inhumane and unrealistic.

Meanwhile, Djimanto, secretary-general of the Indonesian Employers' Association (Apindo) said on Tuesday that more companies would likely close if the new labor law took effect in such difficult economic conditions.

"We will have no other alternative but to close down or relocate to other countries if the government enforces the new law," he said without elaborating.

RI urged to decide on Batam status
Zakki P. Hakim, The Jakarta Post, Singapore

The incoming government should quickly decide on the free trade zone (FTZ) status of the industrial island of Batam, otherwise existing and potential investors would turn away to competing investment areas in China and Vietnam, Singapore foreign minister George Yeo has warned.

Yeo was quoted by the visiting chairman of the Indonesian Chamber of Commerce and Industry (Kadin), MS Hidayat, as saying that Batam had the potential to become a leading industrial center like China's Shenzhen within 10 years as long as the lingering legal uncertainty was quickly resolved.

Hidayat said that whether to turn the whole of Batam into a FTZ area (as suggested by the House of Representatives), or to adopt the enclave FTZ approach where only certain industrial zones on the island would enjoy FTZ status (as demanded by the current government), was not an issue for investors as what was most important was that the status of Batam be clearly defined.

A delegation of Kadin officials held a meeting with Yeo on Monday during a visit to Singapore to attend the five-day Global Entrepolis @ Singapore (GES) 2004 investment and trade forum.

Singapore companies are among of the top investors in Batam, located some 30 kilometers southeast of the city state.

Yeo's statement came after the House and the outgoing administration failed to reach an agreement on the status of Batam as a FTZ. Last month, the House endorsed its own version of a bill that granted FTZ status to the whole of Batam Island. This was opposed by the government.

Without the government's approval, the law cannot take effect, creating further uncertainty for investors on the island, which since 1978 has been promoted by the government as an industrial bonded zone to attract foreign investors. It is now one of the most attractive manufacturing and industrial locations in the Southeast Asia region, playing host to some 600 foreign companies and absorbing over US$3 billion in foreign investment.

The government has argued that extending full FTZ status to the whole Batam would cause envy in other regions not privileged with FTZ status.

"The Kadin local representative (in Batam) told me that there are about 250 investors that have expressed interest in investing in Batam, but postponed their decisions until there is a clear decision on Batam's future," Hidayat told reporters on the sidelines of the GES annual forum.

He added that Kadin had invited the investors, who are mostly participants in the GES forum, for a two-day visit to Batam.

This year, the GES is expected to attract more than 3,000 leading executives, entrepreneurs and venture capitalists from Asia and the world, with more contingents from India and China as well as from the U.S., Japan, Russia and Korea, and regional groups from ASEAN, the Middle East and European Union.

In total, some 10,000 visitors from around the world are expected to attend the event, in which cosmetics producer PT Martina Berto and apparel maker PT Great River Garments represent the Indonesian side.

I agree with Yeo. The incoming administration must deal with this issue quickly, and that is the key. Either they will prove to be efficient and concerned about real economic development, or they will prove themselves a failure in dealing with such issues.

Jusuf Kalla:
Perlakuan ke Kelompok Pengusaha Akan Dibedakan


Jakarta, Sinar Harapan
Wakil Presiden terpilih Jusuf Kalla mengatakan, pihaknya akan membedakan perlakuan terhadap para pengusaha berdasarkan kelompok. Para pengusaha dari kelompok usaha kecil dan menengah (UKM) akan diperlakukan lebih baik dibanding pengusaha dari kelompok besar. Hal seperti ini pernah diatur dalam Keputusan Presiden No.16 Tahun 1994 tentang Pelaksanaan APBN.

“Kalau Malaysia menerapkan ras, kita harus menerapkan berdasarkan kelompok,” ujar Kalla dalam perbincangan dengan SH di ruang kerjanya, baru-baru ini. Tindakan ini diambil guna mengurangi jurang kaya dan miskin yang semakin lebar di Indonesia. Menurut Kalla, pemberian bunga untuk pengusaha kecil sebesar 30 persen dan untuk pengusaha besar sebesar 15 persen adalah tidak adil. Karena itu, pembedaan perlakuan pemerintah terhadap pengusaha berdasarkan kelompok harus segera direalisasikan.
Misalkan, dalam penjelasan Pasal 21 ayat (5) Keppres No.16/1994 disebutkan, yang termasuk perusahaan golongan ekonomi lemah adalah perusahaan yang sebagian besar modalnya (50 persen ke atas) dimiliki oleh golongan ekonomi lemah.
Menariknya, dalam penjelasan tersebut juga disebutkan bahwa sebagian besar golongan ekonomi lemah terdiri dari orang Indonesia asli. Disebutkan: “untuk sementara, pemberian kesempatan kepada golongan ekonomi lemah itu diberikan kepada orang Indonesia asli.”

Penjelasan ini membuat kebijakan yang akan diterapkan pemerintahan Susilo Bambang Yudhoyono-Jusuf Kalla dikhawatirkan tergelincir pada sikap diskriminatif.
Menanggapi hal ini, Kalla berkomentar, “Ya sebetulnya, tanpa disebut pun, 90 –95 persen pengusaha kecil itu pribumi.”
Kalla sendiri tidak khawatir dianggap diskriminatif dengan menerapkan kebijakan ini. Menurutnya, kebijakan ini justru menjadi solusi bagi pengusaha Tionghoa yang mayoritas memegang perusahaan besar, agar tidak menjadi sasaran kemarahan masyarakat akibat lebarnya jurang kaya-miskin di Indonesia.
Menurut Kalla, menguatnya ekonomi dari kelompok UKM yang mayoritas pribumi justru akan menghilangkan sentimen anti-Tionghoa.
Kalla menyebut peristiwa Mei 1998 dipicu oleh kemarahan masyarakat terhadap jurang kaya-miskin yang terjadi di Indonesia. “Jangan disembunyikan masalah republik ini. Harus terbuka. Ini kepentingan Anda (pengusaha Tionghoa-red), saya bilang. Kalau banyak orang miskin, banyak pengusaha kaki lima yang didorong-dorong kiri kanan. Tahun depan siapa yang akan dia bakar? Anda yang akan dibakar. Suka mana? Suka diskriminasi atau suka kau dibakarin, diburu-buru. Anda enak bawa duit keluar negeri kalau terjadi apa-apa. Saya terbuka begitu. Saya tidak pernah tutup-tutupi,” kata Kalla menceritakan pengalamannya berdialog dengan pengusaha Tionghoa.

Realokasi Dana
Dalam kesempatan terpisah, mantan Ketua Umum Dewan Koperasi Indonesia, Sri-Edi Swasono, mengatakan bahwa pemerintah baru harus melakukan realokasi dana besar-besaran untuk menggerakkan usaha kecil. Karena dengan keberpihakan pada usaha kecil berarti juga membangun bangsa dan negara. Karena itu perlu ada upaya strategis, tidak cukup hanya keberpihakan.
“Membangun ekonomi rakyat harus betul-betul substantif dan menggunakan sumber daya yang ada dan mampu menggerakkan produktivitas rakyat. Sangat keliru membangun usaha kecil dengan hanya memberikan residu,” katanya.
Sri-Edi menekankan, alokasi dana untuk usaha kecil sangat minim bahkan dalam penyalurannya juga tidak sampai pada sasaran. Dia mencontohkan, Kredit Usaha Tani (KUT) senilai Rp 8,6 triliun akhirnya penyalurannya lebih banyak menyimpang. Usaha kecil merupakan ekonomi rakyat. Upaya menggerakkan ekonomi rakyat ini harus berbasis akar rumput, sumber daya dan berorientasi pada orang.
Sementara usaha menengah, menurut Sri-Edi, selama ini menjadi beban bagi usaha kecil dengan melakukan eksploitasi dan kadang-kadang berperan sebagai predator. Usaha menengah sebagian hanya menjadi brokrer atau distributor untuk usaha kecil. “Memang tidak semua usaha menengah demikian tetapi prioritas pemerintah harus usaha kecil karena usaha menengah jumlahnya juga sedikit,” katanya. (san/emy/das/mis) http://www.sinarharapan.co.id/berita/0410/12/sh01.html :bash:

The government can do nothing with the situation, they wanna help the low income industry, go ahead, but what about the big investment they needed from the overseas company, which mostly they will hire the big companies one instead the small company...because of the reliability and the good experiences in the industry. Not to mention, the man power of the big companies can provide, Yet the cargo/shipping connection.

If they still persistant to help, what the government can offer? Bank loans? Government subsidies to the small companies?

Dilemma..Indonesia Dilemma...most government officials still think they can be robinhood, which is impossible in this days of gloomy economy.

cheers

Car Sales Rise in Indonesia in Sept

JAKARTA, Oct 13 Asia Pulse - Car sales in Indonesia totaled 45,354 units in September, up from 38,677 units in the previous month and 34,398 units in the same month last year.
Observers attributed the increase to the launching of new models.

Toyota led the domestic market with sales totaling 99,786 units, followed by Mitsubishi with sales 66,888 units, Suzuki 58,613 units, Daihatsu 34,350 units and Honda 34,290 units.

Car sales in the country are predicted to exceed 400,000 units this year, up from 340,000 units last year.

(ANTARA)

Indonesia Telkom Expects '05 Revenue To Grow 20%: CEO

JAKARTA (Dow Jones)--PT Telekomunikasi Indonesia (TLK), the country's largest telephone company, expects its consolidated revenue to grow 20% next year, similar to its projections for this year, chief executive Kristiono said Wednesday.

"To achieve a 20% growth in revenue, Telkom will try to get 5 million new cellular phone subscribers, 2 million Flexi subscribers, and 300,000 fixed-line subscribers next year," he told reporters.

To support the plan, Telkom plans to invest IDR10 trillion this year, he said.

Flexi is the trademark of Telkom's fixed wireless phone services.

Indonesia Shares End At Record High; +1.7% At 863.171

JAKARTA (Dow Jones)--Indonesian shares ended at a record high Wednesday as foreign investors bought back local stocks ahead of the announcement of a new Cabinet next week, dealers said.

President-elect Susilo Bambang Yudhoyono is expected to announce his Cabinet lineup Oct. 20, when he will be inaugurated as Indonesia's new head of state.

Dealers said the market expects the handover to the new government is expected to further boost investor sentiment in Indonesia.

The Jakarta Stock Exchange Composite index rose 13.978 points, or 1.7%, to 863.171. This is the record closing high following the previous 861.318 high reached on Oct. 5.

Gainers led decliners 142 to 18, while 69 stocks ended unchanged.

Volume stood at 1.9 billion shares valued at IDR1.33 trillion.

Dealers said foreign investors bought Indonesian shares because they are still relatively cheaper than shares in other regional markets.

"Indonesian share prices are relatively still lower than those, for example, in Thailand," said a dealer with a foreign securities company. "I'm optimistic the index will rise to 880 points in the near future."

Banking and tobacco stocks are among the gainers Wednesday.

Indonesia's largest lender Bank Mandiri rose 6.8% to IDR1,575 on expectations of a robust growth in its net profit this year. Chief Executive Edwin Neloe said Wednesday the bank has revised its 2004 net profit forecast to IDR4.8 trillion from IDR4 trillion previously as its nine-month profit has already exceeded IDR4 trillion.

Bank Central Asia edged up 1.1% to IDR2,250.

Cigarette maker Hanjaya Mandala Sampoerna gained 5.3% at IDR5,950, whereas its larger rival Gudang Garam ended up 0.4% at IDR12,800.

Indonesia's largest telephone company Telekomunikasi Indonesia rose 1.8% to IDR4,350.

Dealers said they expect share prices to keep rising Thursday, but profit taking may limit further gains.

The JSX closed at 863,171 today, reaching a new all-time high after BI announced that it expects economic growth figures to be strong for Q3 04


Rabu, 13/10/2004 12:59 WIB
BI prediksi pertumbuhan triwulan III/04 capai 4,9% oleh : Djony Edward

JAKARTA (Bisnis): Bank Indonesia memperkirakan pertumbuhan ekonomi Indonesia pada triwulan III 2004 mencapai 4,9% dengan pendorong utama pertumbuhan sektor swasta.

Hasil Rapat Dewan Gubernur Bank Indonesia Bulanan seperti dilaporkan cbcindonesia.com mengungkapkan sampai dengan akhir tahun 2004, diperkirakan pertumbuhan ekonomi akan mendekatai batas atas perkiraan awal sebesar 4,5% sampai 5%.

Namun demikian, pola pertumbuhan ekonomi masih belum berimbang, dimana konsumsi terutama konsumsi swasta masih menjadi pendorong utama pertumbuhan.

Sementara investasi meski belum bisa meningkatkan kapasitas ekonomi, meski sudah mulai menunjukkan peningkatan. Dalam triwulan III 2004, investasi tumbuh sebesar 8,3% hingga 8,8%. Peningkatan investasi ini terutama didorong oleh konsumsi dan dukungan pembiayaan perbankan serta pasar modal.

Sedangkan ekspor tumbuh terbatas karena masih rendahnya kapasitas dan daya saing terkait dengan masih terbatasnya investasi. Sementara impor masih tumbuh tinggi seiring masih tingginya permintaan domestik.

BI juga menilai perkembangan kondisi ekonomi makro sampai triwulan III tahun 2004 masih stabil. Meski perkembangan eksternal cukup kondisif, namun belum tumbuh secara optimal dimanfaatkan oleh ekonomi domestik yang terlihat dari pertumbuhan ekspor Indonesia yang masih lebih rendah dibandignkan dengan kawasan regional lainnya. Hal ini disebabkan karena nmsih terbatasnya peningkatan kapasitas dan daya saing.

Dengan masih terbatasnya kapasitas ekonomi serta ketidakseimbangan pola ekspansi ekonomi yang masih didominasi oleh peningkatan konsumsi domestik, maka perkembangan ekonomi ke depan mengandung risiko tekanan pada kestabilan ekonomi khususnya pada tingkat harga. Melihat perkembangan tersebut, maka BI akan tetal melanjutkan kebijakan moneter yang cenderung ketat atau tight bias. Hal ini ditempuh agar tetap bisa menekan inflasi pada tingkat yang rendah dalam jangka menengah. BI juga akan tetap berupaya untuk menyerap kelebihan likuiditas secara optimal dengan tetap memberikan fleksibilitas bagi perubahan suku bunga.

Growth Competitiveness index year 2004-2005: Indonesia at nbr 69 from 104 countries (up from 72 last year)

The Business Competitiveness index year 2004-2005: Indonesia at nbr 44

In Asia, the rankings are quite stable, with some small improvements—notably Indonesia and, more significantly, Japan, the latter by two places—and some small drops in the rankings, as with Malaysia and Thailand. There are two countries in the region, which stand out for their significant drop in the rankings: Korea and Vietnam, the latter noted above. Korea’s drop is linked to a significant decline in the macroeconomic environment subindex,
falling from 23rd last year to 35th this year; moreover, Korea also experienced declines in the other two areas measured by the GCI.Vietnam’s decline is linked to significant drops in all three areas, particularly with regard
to public institutions and technology.

Among low-income countries, Indonesia made the greatest improvement, jumping a remarkable 18 ranks. After years of turmoil, the country is now back to its 2000 business competitiveness level.

Check:
http://www.weforum.org/pdf/Gcr/Executive_Summary_GCR_04

yet even more good news! thanks for the info, Tata

Donors to help SBY govt boost investment


Tiarma Siboro, The Jakarta Post, Bogor

Representatives of the Consultative Group on Indonesia (CGI) met with president-elect Susilo Bambang Yudhoyono on Wednesday in an apparent show of support for the incoming government.

Susilo's spokesman, Dino Pati Djalal, said the closed-door talks centered on, among other things, programs to boost foreign investment in the country.

Representing the country's main foreign donor institution were U.S. Ambassador Ralph L. Boyce, Japanese Ambassador Yutaka Iimura and World Bank Country Director for Indonesia Andrew Steer.

"We all believe that the programs will eventually help the country deal with increasing unemployment," Dino told a media conference attended also by the CGI figures.

Dino, who is also the Ministry of Foreign Affairs' director for North and Central America, refused to go into detail about the programs, saying further talks would be held after Susilo officially took office on Oct. 20.

Susilo will have to tackle open unemployment that has surpassed more than nine million people, partly because of a lack of foreign investment.

However, foreign direct investment approvals rose by 22 percent in the January-September period to US$7.9 billion from a year earlier.

The World Bank has said that investment in Indonesia accounts for only 20 percent of its Gross Domestic Product, which is 10 percent lower than expected.

Security problems, a lack of legal certainty and a corrupt bureaucracy have been billed as the major obstacles to attracting foreign investment to Indonesia.

The CGI is Indonesia's main donor. Last year, it disbursed about US$3 billion to the country.

Earlier in the day, Susilo also received a delegation from the Chinese Communist Party, which was led by a member of the party's politburo, Wu Guangzheng. Accompanying the delegation was Chinese Ambassador to Indonesia Lu Shumin.

Dino said the Chinese delegation proposed programs to enhance bilateral relations in the economic field, but "the president-elect also offered closer relations in the education, culture and technology fields."

Susilo and his team continued their discussions on Wednesday regarding the structure of his Cabinet.

Another spokesman for the president-elect, Andi Mallarangeng, said the Cabinet structure would be based on the principles of efficiency and cost-benefit.

Vice president-elect Jusuf Kalla had said earlier that the Cabinet would comprise 34 ministers, including three coordinating ministers.

Mallarangeng said Susilo would take pluralism into account when it came to the selection of his ministers, as well as integrity, capability and acceptability.

"Pluralism will be an important consideration for the president-elect as he wants to confirm his commitment to the national motto, Bhineka Tunggal Ika (unity in diversity," said Mallarangeng, who is also a political science expert.

Like the previous Cabinets of post-New Order administrations, Susilo is likely to combine politicians (40 percent) and professionals (60 percent).

Mallarangeng said Susilo had put back the interviewing of his prospective ministers from Wednesday to Friday.

He also clarified earlier reports that the presidential office under Susilo would not undermine the existing State Secretariat. The office, instead, would strengthen the State Secretariat to help the president run the government.

Earlier another Susilo aide, Denny JA, said the presidential office would deal with various issues ranging from promoting the president's image to evaluating the performance of his ministers.

Number of big spenders increases: AC Nielsen


Zakki P. Hakim, The Jakarta Post, Jakarta

More Indonesian consumers enjoyed a higher purchasing power this year, spending money on various household goods despite rising political tension during the recent seven-month-long general election, according to AC Nielsen's latest survey released on Wednesday.

The consulting firm said that the number of people categorized as "A" spenders (highest category) increased to 12 million, or 15 percent of the population, compared to 12 percent last year, in nine major cities.

"The 'A' consumers in Indonesia is four times that of Singapore's population," said AC Nielsen Southeast Asia managing director Farquhar Stirling at a forum attended by the company's corporate clients.

Singapore has a total population of approximately 2.8 million.

Stirling said this group spent more than Rp 1.75 million (about US$192) each month on various fast-moving goods such as food items, washing and cleansing products, and fuel products, but excluded car and house purchases.

Analysts have said that the relatively mild inflation and low interest rate environment have improved consumers' purchasing power, creating robust domestic consumption, which has been the main engine of the country's economic growth during the past few years as investment and export performances remain weak.

Higher economic growth this year, projected to reach 4.8 percent from 4.1 percent last year, also bodes well for consumers' purchasing power.

The strong domestic consumption has allowed consumer goods producers and retailers in the country to enjoy strong sales growth.

AC Nielsen director of retail and business development Yongky Surya Susilo said that retailers were now projecting double-digit sales growth from an estimated 9 percent average growth this year.

AC Nielsen said the percentage of "B" spenders, that spent between Rp 1.25 million and Rp 1.75 million on household items monthly, had also increased to 15 percent of the combined population in the areas surveyed, from 13 percent last year.

"The 'B' spenders still represent people with a considerably high purchasing power," Stirling said.

The survey showed that the number of people spending below Rp 800,000 per month generally decreased over the year, he said.

"Under the current environment (meager economic growth rate), consumers are still increasing their spending. Imagine, how much more they could spend if the government improved our gross domestic product (GDP) per capita to the average level in the region," he said.

Yongky said that consumers' purchasing power this year would be affected if the new incoming government decides to increase fuel prices later this year as suggested by lawmakers to help reduce soaring the costly fuel subsidy spending.

He said that the government should wait until January.

"Nevertheless, Indonesians are fast in adapting with price increase. They usually need three months at the most to adapt, and then business as usual," said Yongky.

Penilaian Bank Dunia tentang Lambannya Investasi Masuk ke Indonesia
Indonesia Dinilai Belum Pulih


Jakarta, Kompas - Bank Dunia menilai kondisi ekonomi makro dan politik di Indonesia masih belum pulih dibandingkan dengan negara-negara di ASEAN lainnya karena adanya gangguan keamanan, lemahnya penegakan hukum, banyaknya hambatan untuk memulai investasi, serta belum memadainya penyediaan prasarana infrastruktur. Berbagai faktor itulah yang menyebabkan kalangan investor bersikap menunggu untuk menanamkan investasinya di Indonesia.

Demikian terungkap dalam seminar "Peningkatan Penanaman Modal Asing Melalui Kerja Sama Internasional" yang digelar oleh Departemen Luar Negeri di Jakarta, Rabu (13/10).

Pada kesempatan tersebut, Direktur Jenderal Multilateral Ekonomi, Keuangan, dan Pembangunan (Ekubang) Departemen Luar Negeri Susanto Sutoyo mengatakan, bahwa kondisi ekonomi makro dan politik di dalam negeri belum kondusif. Hal itulah yang membuat para investor mengambil sikap menunggu sebelum memutuskan untuk menanamkan modal mereka sehingga kondisi ini menjadi pemicu iklim investasi di Indonesia belum pulih sejak terjadinya krisis ekonomi pada tahun 1997.

"Tantangan kita menjadi semakin berat karena tingginya persaingan dengan negara berkembang lainnya, seperti China, Thailand, Malaysia, Vietnam, atau Filipina," kata Susanto.

Buruknya kondisi iklim Indonesia, menurut Susanto, tercermin pada peringkat Investment Performance Index dan Investment Potential Index yang diterbitkan oleh United Nation Conference on Trade and Development (Unctad). Dalam laporan Unctad itu disebutkan bahwa Indonesia berada di peringkat 138 dari 144 negara tujuan investasi utama di dunia.

"Hal ini sangat mengkhawatirkan karena pertumbuhan ekonomi Indonesia sangat bergantung pada masuknya investasi asing ke dalam negeri," kata Susanto.

Menurut Susanto, upaya untuk menarik penanaman modal asing (PMA) ke dalam negeri masih menghadapi kendala yang cukup penting, mulai dari masalah keamanan, penegakan hukum, hingga penyediaan sarana dan prasana investasi yang belum memadai. Oleh karena itu, untuk meningkatkan PMA, pemerintah harus menggali potensi kerja sama internasional secara komprehensif. Sejalan dengan desentralisasi, maka upaya peningkatan kerja sama internasional perlu dilakukan secara sinergis dengan memanfaatkan potensi kerja sama ekonomi di daerah.

Perhatian serius

Sementara itu, ekonom Bank Dunia Yoichiro Ishihara mengatakan, masalah yang paling mendapatkan perhatian serius dari para investor asing sebelum mereka memutuskan untuk menanamkan modal di Indonesia. Selama kedua sektor itu belum memberikan gambaran yang membaik, para investor akan menunda investasinya.

"Masalah lain yang juga mendapatkan perhatian serius dari Bank Dunia dan Bank Pembangunan Asia adalah korupsi di pemerintah daerah dan pusat, sistem perpajakan, dan biaya ekonomi, serta sistem hukum. Selain itu, mereka juga sangat serius melihat masalah aturan perburuhan di daerah dan nasional, ketersediaan listrik, transportasi, hingga telekomunikasi," kata Yoichiro.

Menurut Yoichiro, iklim investasi di Indonesia masih belum membaik meskipun tiga pemilihan umum yang diselenggarakan pada tahun 2004 berlangsung dengan lancar dan aman. Hal itu terlihat dari tingkat kecepatan pengambilan keputusan para investor asing pada saat memulai bisnis mereka.

"Indonesia merupakan negara pada urutan terbawah di antara negara-negara Asia Tenggara dalam hal waktu memulai investasi. Waktu yang diperlukan para investor untuk menanamkan modal di Indonesia mencapai 151 hari. Hal itu jauh lebih rendah dibandingkan dengan waktu yang diperlukan untuk menanamkan modal di Singapura yang hanya memakan waktu dua hari, Malaysia sebulan, Thailand 33 hari, Vietnam 56 hari, bahkan di Kamboja saja cuma 94 hari," kata Yoichiro Ishihara.

Selain itu, menurut Yoichiro Ishihara, Indonesia juga dinilai masih terpuruk dalam tingkat kemudahan bagi investor asing saat menandatangani kontrak bisnis. Dalam hal ini, para investor harus menyediakan waktu selama 570 hari sebelum menandatangani kontrak kerja sama dan bisnis di Indonesia.

"Ini jauh lebih buruk dibandingkan dengan Singapura yang hanya memerlukan waktu selama 69 hari, China 241 hari, Papua Nugini 295 hari, Malaysia 300 hari, Filipina 380 hari, Thailand 390 hari, dan Vietnam yang hanya perlu 404 hari," kata Yoichiro. (OIN)

ASIA (CNN.COM) *All times local.
Bangkok SET 661 3 0.5% last close
Hong Kong Hang-Seng 13011 -160 -1.2% 14/10 10:40
Jakarta Composite 863 14 1.6% last close
Seoul KOSPI 856 -2 -0.2% last close
Singapore Straits-Times 1971 0 0% last close
Sydney All-Ordinaries 3722 -12 -0.3% 14/10 13:19
Shanghai Index 1455 3 0.2% last close
Taipei Weighted 5963 -16 -0.3% last close
Tokyo Nikkei225 11081 -115 -1% 14/10 11:00

Wow.. just a week ago KOSPI is stronger than JSX by 20 point.. now JSX has overtaken KOSPI. GO JSX!!!!

Any chance JSX will pass 900 point? or maybe 950? or even 1000? wow wow wow!

Well just a year ago the JSX was lower than KLSE and Bangkok.

ASIA (CNN.COM) *All times local.
Bangkok SET 661 3 0.5% last close
Hong Kong Hang-Seng 13011 -160 -1.2% 14/10 10:40
Jakarta Composite 863 14 1.6% last close
Seoul KOSPI 856 -2 -0.2% last close
Singapore Straits-Times 1971 0 0% last close
Sydney All-Ordinaries 3722 -12 -0.3% 14/10 13:19
Shanghai Index 1455 3 0.2% last close
Taipei Weighted 5963 -16 -0.3% last close
Tokyo Nikkei225 11081 -115 -1% 14/10 11:00

Wow.. just a week ago KOSPI is stronger than JSX by 20 point.. now JSX has overtaken KOSPI. GO JSX!!!!

Any chance JSX will pass 900 point? or maybe 950? or even 1000? wow wow wow!


If everything runs well ..... 900 can be reach after the Inauguration of SBY ... as long as ... the ministers are the brightest and the smartest person and acceptable by the MARKET ...

JSX is already overtaken KOSPI many times, but I am now happy that JSX is already overtaken KL composite...basically JSX is now the best perfomer in Asia.

I am bullish with JSX, next level 950 by the end of the year. If everything goes smoothly, then i expect 970.

cheers

Actually, I think it was JPMorgan that said earlier this year that if SBY-Kalla gets elected JSX could beat 1000 by year end..

JP MORGAN: SBY AND JK - A DREAM TEAM

June 2, 2004. To save Indonesia from economic disaster requires not only a good system structure, but also a leader, who is capable and willing to guarantee the implementation of such system
The unemployment levels continued to increase from year to year, and it requires the right treatment to overcome this problem. The unemployment rate recorded for year 2001 was 8.1 millions, in 2002 was 9.1 millions and in 2003 reached 9.5 millions people out of work. And the poverty level in 2003 effected as much as 37.3 million lives. To create job opportunities is certainly not easy, it is tightly linked to the level and the size of investments provided by domestic as well as foreign investors.

Presidential candidate Susilo Bambang Yudhoyono (“SBY”) and the Vice Presidential candidate, Muhammad Jusuf Kalla (“JK”), both have good comprehension of such situation.

Their joint beliefs are expressed through their vision statements, mission statements and programs titled “To build a Safe, Just and Prosperous Indonesia.” SBY and JK have personally created agendas addressing recovery, job creation, the elimination of poverty, in additional to other constructive development issues.

An investment consultant, JPMorgan, through its research predicts that among the five Presidential and Vice Presidential Candidates of the July 5th election, SBY and JK make strong candidates in bringing economic recovery to Indonesia.

“SBY and JK make a dream team,” say JPMorgan.

JPMorgan present several important points in the case that this team is elected to be the President and Vice President of Indonesia for the term 2004-2009.

It is said that, SBY and JK will place significant emphasis on law enforcement and the creation of a conducive environment for business. SBY is regarded as having a good understanding of western Indonesia’s socio-economic dynamic, while JK has an in-depth knowledge for the eastern part of Indonesia.

“We believe them to be a dream team for the Indonesian capital market,” said JPMorgan.

The victory of SBY and JK in the Presidential and Vice-Presidential election will reduce the country’s equity risk premium and create a new investment cycle that will improve the country’s earnings.

JP Morgan also predict the election of SBY and JK into office will bring positive impact to Indonesian equity values, thus it is not surprising if the Jakarta Composite Index (JCI), by year end 2004, will hit above 1,000 or increase by more than 23 % over the current index.

The reason for such predictions among others is that SBY and JK are a combination of profressionals from the military and business. Thus, it is believed that a government under their leadership will highlight law enforcement and the creation of a conducive business environment.

This is regarded as very important and crucial because it will boost morale and enthusiasm amongs investors, primarily domestic investors. “Therefore we are not surprised if this team is able to promote new investment to Indonesia,” say JP Morgan.

Secondly, SBY and JK will balance each other out in their leadership roles. SBY knows how to best manage the nation’s military organisation, an institution that is recognized as possessing the best organisation structure, efficiency and human resource planning and law enforcement. On the other hand, the managerial skills and entrepreneurial instincts of JK will complement Indonesia’s business sector.

Thirdly, looking at his former duties, SBY is considered to possess good insight into socio-economic conditions in the Western region of Indonesia.

Fourthly, in making economic decisions, JK is believed to be an upright businessman, capable of minimizing potential negative political impact.

Based on 13 years of historical study, JP Morgan has the view that Indonesian shares will be trading at 14.4 EPS over the next 12 months. If SBY and JK win the election, it will bring positive impact to the market taking the JCI to a level of 1,070 by the end of this year.

An economic expert at JP Morgan predicts the interest rates of Bank Indonesia Certificates (“SBI”) for the first month will reach 7.25 %, compared to a current rate of 7.34% by December this year.

Our growth competitiveness index has improved from 2003 to this year. In 2003, we were ranked 72 out 104 nations that is being ranked. This year, we moved to the 69th place. It is still piss poor in my eye, but it's great that our compeititveness ranking is moving up. We are more competitive then the Russian (70), the Philippines (76), Vietnam (77). You can see the entire ranking in this website: http://www.weforum.org/pdf/Gcr/Growth_Competitiveness_Index_2003_Comparisons

Our growth competitiveness index has improved from 2003 to this year. In 2003, we were ranked 72 out 104 nations that is being ranked. This year, we moved to the 69th place. It is still piss poor in my eye, but it's great that our compeititveness ranking is moving up. We are more competitive then the Russian (70), the Philippines (76), Vietnam (77). You can see the entire ranking in this website: http://www.weforum.org/pdf/Gcr/Growth_Competitiveness_Index_2003_Comparisons

similar entry already posted. see below (post #194)

I doubt that will be achievable with the current price of oil (almost $55 a barrel) cutting into every international market.

City eyes one-stop investment service


Damar Harsanto, The Jakarta Post, Jakarta

The Jakarta administration aims to provide a one-stop service for investors operating in the capital by preparing a new bylaw on investment in an effort to cut down on bureaucracy, the governor said.

"We are doing our utmost to lure investors to place their money here. We are now preparing the bylaw on investment that simplifies the extended procedures under a one-stop service," Jakarta Governor Sutiyoso told a business delegation from Greece on Thursday during a luncheon at City Hall.

The delegation, accompanied by Indonesian Ambassador to Greece Faisha Soeftendy, is participating in the Export Products Exhibition at the Jakarta Fairground in Kemayoran, Central Jakarta.

The Greek capital of Athens became a sister city to Jakarta in 2001.

Sutiyoso admitted the prevailing administrative procedures for investment involved piles of paperwork and red tape.

"This weakness must be corrected. Jakarta must be an example for other provinces in the nation."

He promised that, under the new system, investors would be able to obtain all necessary documents quickly from relevant city agencies through a joint desk in charge of investment.

Jakarta Legal Office head Deded Sukandar said the draft of the bylaw was undergoing discussion by City Council.

"Hopefully, the new councillors will deliberate and pass it immediately. Perhaps we can start its implementation by next year," he said.

Sutiyoso said the potential for investment in the city was promising. "This year, we have approved foreign direct investment of US$864.5 million through 288 projects," he added.

In 2001, foreign direct investment in the capital hovered at $609 million, plunging sharply in 2002 to only $42.92 million in the aftermath of the Bali bombing. The attack on the resort island has been blamed for driving investors away from the country as well as the city.

The investment figure from last year -- when another bomb ripped through the five-star JW Marriott Hotel in the Kuningan business district -- was not available.

Jakarta Investment Board head Muzhahiem Mokthar said the administration would prioritize investment that sought to develop service sectors aside from trade, tourism and certain industrial sectors, in line with the plan to make Jakarta "a service city".

The capital has placed service sectors as a top priority, since it has very few natural resources to contribute to its revenue.

Any increase in investment will generate job opportunities, which will, in turn, help absorb a skyrocketing unemployment of 560,000 people in the city.

The 10 biggest investing countries in Jakarta are Japan, Singapore, Hong Kong, the United States, the Netherlands, the United Kingdom, Australia, Germany, South Korea and France.

Indonesia ends ´white paper´ reforms program; misses 50 action plans end-Sept
Monday, October 18, 2004 6:52:13 AM
http://www.afxpress.com


||||| ||||| ||||| 2004-10-18 07:52:13 Indonesia ends 'white paper' reforms program; misses 50 action plans end-Sept JAKARTA (AFX) - The government has ended its economic reforms program under the so-called "white paper" which follows the earlier IMF-led reforms program, with the results showing that 50 of the 181 action plans that were scheduled to be completed by end-September have been missed, the Office of Coordinating Minister for Economic Affairs said

The office said in a statement that the achievements of the 13-month long program were "quite satisfactory" overall

The white paper contains a total of 310 action plans covering three main programs on maintaining macro-economic stability, reforming the financial sector, and boosting investment, exports and employment

Of the 310 action plans, 181 should have been concluded by the end of the program in September, the chairman of the program's monitoring team Jannes Hutagalung said in the statement. The remaining action plans did not have any specific deadlines. Hutagalung said 50 action plans have missed the September deadline

Twenty six of these were related to exports, investment and employment, 13 were related to macro-economic stability and 11 to reforms in the financial sector, he said, without providing details

He said that under the macro-economic stability program, the government issued the new state finance law and treasury law; amendments to the regional autonomy law and fiscal decentralization; and a presidential decree on state procurement for goods and services to curb corruption and collusion practices

The government is also drafting a tax bill which among other things aims to improve Indonesia's tax competitiveness among neighbouring countries, he said

On the second program of reforming the financial sector, he said the white paper focused on establishing a financial safety net for the banking system, restructuring of banks, anti-money laundering measures, improving capital markets supervision and consolidating the insurance and pension fund industry

Hutagalung said legislators have passed the necessary amendment to the central bank law and another law to establish an insurance deposit agency. A draft bill for establishing the financial sector supervisory body has also been submitted by the government, he said

On bank restructuring efforts, he said the Indonesian Bank Restructuring Agency (IBRA) has completed most bank sales by the end of its five-year mandate in February

He said progress on anti-money laundering efforts include the separation of the Financial Transaction Reports and Analysis Center (PPATK) from Bank Indonesia in October last year, and a presidential decree on protecting money laundering witnesses

For its third program on exports, investment and employment, the white paper outlined a wide range of targets covering investment climate, legal reforms, promotion of small and midsize enterprises, infrastructure development, job creation measures, and improving tax and custom services

On legal reforms, Hutagalung said the government has completed all five targets on time, such as the appointment of members for the anti-corruption commission and a reforms blue print for the courts dealing with corruption and commercial matters

The government launched the white paper to follow up on the IMF-led reforms program following Indonesia's exit from the Fund's program last year

The IMF will undertake regular visits to check the progress of the country's economic reforms, until the government settles its estimated 9.7 bln usd debt to the Fund by 2010 as agreed. A new government will take office this week following the general elections and it remains unclear whether it will continue with the white paper programs

berni.km@xfn.com bkm/rc For more information and to contact AFX: www.afxnews.com and www.afxpress.com

Monday 18th October, 2004

Yudhoyono picks economic team --------------------------------------------------------------------------------

Big News Network.com Monday 18th October, 2004

Indonesia's president-elect has picked an economic team that combines experience and business acumen, Business Times said Monday.

Keeping to his promise to select respected professionals for important ministerial positions, Susilo Bambang Yudhoyono has chosen two businessmen and two economists to drive his economic agenda over the next five years.

Sources close to Yudhoyono told Bussiness Times over the weekend that he has chosen well-known businessman and founder of the powerful Bakrie Group, Aburizal Bakrie, as the new coordinating minister for economics.

Rachmat Gobel, a well-known businessman who owns a successful joint venture with Japanese electronics giant Matsushita, is slated to be the minister for industry. Respected economist Sri Mulyani is to be minister of finance and commercial trade expert Mari Pangestu, minister for trade.

Bakrie may not be highly regarded by international lenders because of his company's poor payment record in the past, the paper said. During the Asian financial crisis, the group owed more than $1 billion to the government and international lenders. The debt recovery rates from the group were one of the lowest among Indonesian debtors.

Export expo records $107.70m trade
Zakki P. Hakim, The Jakarta Post, Jakarta

The 19th annual export exhibition, which officially closed late on Sunday, recorded a total sales transaction of US$107.70 million, a 12.7 percent increase from the previous year, a senior official said on Monday.

Diah Maulida, head of the National Agency for Export Development (Nafed) which organized the expo, attributed the boost in sales to the increasing number of participants.

The five-day expo at the Jakarta Fairground complex in Kemayoran, Central Jakarta, was participated in by 1,254 companies and drew at least 3,000 buyers from 65 countries.

"The sales increase exceeded our initial 10 percent target," Diah told The Jakarta Post.

Diah said the top three most traded commodities were furniture, handicrafts and building materials.

Products displayed at the exhibition included textiles and garments, footwear, automotive components, electronics, cosmetics, food products and mining commodities.

According to Minister of Industry and Trade Rini MS Soewandi, the expo was aimed not only at promoting top quality export products but also to rebuild Indonesia's trading image in the international forum.

The government claimed that non-oil and gas exports had been on track and would reach the targeted 7 percent growth this year.

The country's non-oil and gas exports stood at $47.41 billion last year, and are projected to reach $50.73 billion this year.

Philips optimistis prospek pasar RI

SINGAPURA (Bisnis): Perekonomian Indonesia, bersama negara-negara Asia lainnya, diyakini akan menguat dalam 10 tahun ke depan sehingga tercipta pasar yang besar dengan daya beli tinggi.
CEO dan Presiden Royal Philips Electronics Asia Pasifik Andreas Wente merasa yakin bahwa dalam satu dekade mendatang Thailand, Malaysia, India, Indonesia, Filipina dan Vietnam akan memiliki perekonomian kuat.

Dia merujuk sejumlah hasil riset internasional yang memperkirakan pertumbuhan ekonomi Asia rata-rata 4% dalam 10 tahun mendatang. "Artinya, dua kali lipat pertumbuhan ekonomi kawasan Eropa Barat," ujarnya pada acara Philips Asian Technology Media Event.

Program tersebut diikuti oleh sedikitnya 50 wartawan dari beberapa negara Asia. Mereka kemarin meninjau pusat riset dan pengembangan (R&D) Philips di Singapura yang tergolong terbesar di luar Belanda, wartawati Bisnis Linda Tangdialla melaporkan dari Singapura tadi malam.

Wente melanjutkan di luar Jepang, prospek pertumbuhan ekonomi Asia sekitar 5%-8%, dengan China dan Vietnam diperkirakan 7% dan Indonesia rata-rata 5%.

Khusus Indonesia, dia berharap presiden terpilih Susilo Bambang Yudhoyono yang akan dilantik besok -serta kabinetnya-mampu menciptakan kondisi yang mendukung bisnis, memperkuat iklim investasi, mempermudah orang berbisnis dan menjamin aliran dana dan barang secara bebas. Tujuannya untuk mendorong penanaman modal asing di Indonesia, tuturnya.

Basis produksi

Philips menjadikan Indonesia sebagai pusat produksi lampu-pabriknya berlokasi di Surabaya-dan hasilnya diekspor ke kawasan Asia Pasifik. Sementara barang-barang elektronik merek tersebut dan beredar di Indonesia kebanyakan berasal dari Singapura, yang merupakan basis produk high end perusahaan itu.

Namun perusahaan internasional itu belum lama ini menutup pabrik elektroniknya di Filipina karena kondisi negara tersebut dinilai semakin tidak kompetitif. Wente sebaliknya memuji Thailand yang perekonomiannya sangat dinamis, dengan daya beli yang terus membaik.

Saat ini 25% total penjualan Philips berasal dari Asia Pasifik. Pada kuartal I 2004, misalnya, tingkat penjualan di kawasan itu menyamai penjualan di Amerika Utara.

Wente melanjutkan dengan pertumbuhan ekonomi yang mantap, akan berkembang kelas menengah dengan daya beli kuat di Asia, sehingga kawasan ini menyimpan peluang pasar menggiurkan.

Dia mengakui sekarang ini Asia masih menghadapi banyak kendala, seperti tingkat pengangguran yang tinggi atau belum mampu keluar dari krisis seperti Indonesia. Namun, Wente tetap optimistis mengingat Asia pernah mencatat prestasi tersendiri ketika Hong Kong, Singapura, Taiwan dan Korea Selatan mampu bangkit dari kekurangan mereka dan menjadi 'macan Asia'.

Philips adalah produsen elektronik berteknologi tinggi, yang pabriknya tersebar di seluruh dunia. Perusahaan itu terkenal karena menghasilkan temuan-temuan yang sekarang menjadi tren global, seperti compact disc (CD), DVD player, dll. dengan sekitar 100.000 paten telah dikuasai perusahaan asal Belanda itu.

Dalam tiga tahun terakhir, perusahaan itu memantapkan produk, inovasi dan memperkuat target pasarnya pada tiga bidang yang saling berkaitan yakni perawatan kesehatan, gaya hidup dan teknologi.

Indonesia Negara Terkorup Kelima
Rabu, 20 Oktober 2004 | 19:00 WIB

TEMPO Interaktif, Jakarta:Indonesia tercatat sebagai negara kelima terkorup di dunia dari 146 negara. Peringkat yang baru dikeluarkan oleh Transparansi Internasional tersebut menunjukkan bahwa Indonesia naik satu tingkat dari peringkat tahun lalu yang berada di posisi keenam.

Menurut Emmy Hafild, Sekretaris Jendral Transparasi Internasional Indonesia, naiknya peringkat korupsi Indonesia tersebut, karena tahun ini negara yang disurvei lebih banyak dari tahun sebelumnya, yaitu 133 negara.

Meskipun peringkat Indonesia naik, kata Emmy, namun Indeks Persepsi Korupsi (IPK) 2004 untuk Indonesia naik 0,1 poin dari 1,9 menjadi 2.0.

Emmy berujar, meskipun indeks persepsi Indonesia sedikit meningkat, namun fakta ini masih merupakan hal yang memprihatinkan. "Artinya, upaya memberantas korupsi, walaupun perangkat hukum dan berbagai lembaga pengawas sudah dibangun, belum berjalan efektif," ujarnya.

Indeks Persepsi Korupsi Indonesia tahun ini juga menjadi tantangan bagi pemerintahan baru Yudhoyono, yakni bagaimana meningkatkan IPK sampai dalam lima tahun ke depan masa kepemimpinannya.

"Tantangan dari kami tidak banyak. Hanya bagaimana caranya IPK bisa naik, dari 2 menjadi 3,5 dalam waktu lima tahun," tandasnya.

Indonesia Inco 9-Mo Net $208.92 Million Vs $64.97 Million
Thursday October 21, 10:07 PM EDT

JAKARTA -(Dow Jones)- PT International Nickel Indonesia, or Inco, Friday said its nine-month net profit ended Sept. 30 more than tripled, due to an increase in nickel prices.

The company's net profit for the period rose to $208.92 million, compared with $64.97 million on year.

Inco's realized price for nickel in matte averaged $4.87 a pound for the nine months to Sept. 30, compared with $2.98 a pound in the year-ago period.

The company said in a statement that it is on schedule to achieve a forecast production of 160 million pounds of nickel in matte, from 154.8 million pounds in 2003.

Inco produced 121.6 million pounds of nickel in matte during the nine months to Sept. 30, compared with 116.7 million pounds in the year-ago period.
Sales rose 74% on year to $601.88 million from $346.67 million.

Its cash from operating activities rose sharply to $317.8 million at end- September, compared with $175.3 million a year earlier. The improvement was due to $246.8 million in cash receipts from customers.

The company has a nickel mining license covering 218,000 hectares in South Sulawesi, Southeast Sulawesi and Central Sulawesi.

Canada's Inco Ltd. (N) owns a 58.73% stake in Inco Indonesia, which started explorations in Indonesia in 1968. Other shareholders include Sumitomo Metal Industries Ltd. (5405.TO), which owns 20.09%, and public investors who hold 21.18%.

Investors hopeful on Indonesia, but want action
By Umesh Desai

HONG KONG, Oct 22 (Reuters) - Foreign investors were cautiously optimistic on Friday about Indonesia's new government, saying its strong team of legal ministers would tackle corruption in southeast Asia's largest economy. Markets weakened initially on news of the team picked by President Susilo Bambang Yudhoyono, cool to his choice of finance minister and chief economic minister, but investors saw reason for hope, and analysts expect ratings to rise in the medium term.

"We can see some compromise in the cabinet selection but generally it is market-friendly," said Edward Lee, fixed income strategist with Standard Chartered Bank in Singapore.

"The economic team is weaker than expected, but the legal team is strong and gives teeth to the anti-corruption drive."

The rupiah was steady on Friday after giving up half a percentage point the previous day on worries over the economic team. It has lost 7.6 percent since the end of last year.

Analysts keen for Indonesia to eliminate corruption were upbeat after Supreme Court Judge Abdul Rahman Saleh was named to the key graft-busting position of attorney general.

"We are cautiously optimistic the government will address issues like corporate governance and legal uncertainties, which have held back investment," said Jasmine Robinson, economist with Australia and New Zealand Banking Group, in Melbourne.

Pledges of direct foreign investment rose to $7.99 billion in the first 9 months of 2004, up 24 percent from a year earlier, although lower than before the Asian financial crisis. Approvals in 1997 were $34 billion.

To attract more funds, Indonesia must prove foreign investors are welcome, protect them from spurious court decisions, cut red tape and ease labour laws, analysts said.

"Foreign investors have to be convinced that there is a level playing field and that they can make money," said Tim Condon, head of Asian financial market research at ING Financial Markets.

As his finance minister, Yudhoyono chose Jusuf Anwar, an economist who most recently worked at the Asian Development Bank, but markets were displeased by the choice of business tycoon Aburizal Bakrie as chief economics minister.

Bakri's firms ran up debt of more than $1 billion in the late 1990s, and state restructuring agency IBRA took over some of them after they failed to service their debt during the Asian crisis.

Though about 40 million people, or 40 percent of the workforce, are now jobless or underemployed, the government projects the economy to grow 4.8 percent this year, from 4.1 percent last year, as low interest rates help drive demand.

Some analysts see scope for a ratings upgrade.

"Indonesian exchange rates have been stable, interest rates have been declining in the past couple of years ... we think that a sovereign ratings upgrade is on the cards," said Andrew Freris, chief economist for Asia-Pacific at BNP Paribas.

Fitch this month raised to positive from stable the outlook on Indonesia's B-plus long-term foreign and local currency rating. Standard & Poor's has a B/B foreign currency rating and a B+/B local currency rating with a positive outlook. Moody's has assigned a B2 rating on the sovereign.

At last JSX has rebound back to 851 yesterday. Acceptance to SBY economic minister has been between flat and ok so far. But I dont think JSX fall was 100% caused by SBY, it was more likely investor has too high hope for his cabinet.

I expect JSX to rise on the next 100 days (with some profit taking of course) with ministers start announcing 'exciting' steps for Indonesian economy and other fields. 900 JSX is very realistic. Consumer index will rise as well due to Ramadhan.

Well I am still having a high hope for this SBY government.

I hope there'll be no bombing etc. Its been too 'quiet' this past days. Terrorist usualy strikes when quiet, no?

Exchange Index Level Change % Updated
Bangkok SET 659 10 1.5% last close
Hong Kong Hang-Seng 13015 16 0.1% last close
Jakarta Composite 834 -7 -0.8% last close
Seoul KOSPI 821 -8 -1.0% last close
Singapore Straits-Times 1967 -2 -0.1% last close
Sydney All-Ordinaries 3721 5 0.1% last close
Shanghai Index 1375 -21 -1.5% last close
Taipei Weighted 5775 -23 -0.4% last close
Tokyo Nikkei225 10857 68 0.6% last close

Vandals destroying businesses in Jakarta

http://www.thejakartapost.com/caption/jpafs041023900.jpg

TAKING A HIT: Employees clean up Star Deli in Kemang, South Jakarta. The cafe was attacked by members of the Islam Defenders Front on Friday night. JP/Arief Suhardiman

its a shame... :ohno: >( :no: :no:
these hooligans should be captured and punished accordingly.

Apparently a group of residents stopped them while they were on their way to the place, and a battle ensued. The residents damaged a few cars and motorcycles.

Yes. Many Indonesian dare to take action now.
Its good.
Its now time for something like this to be stopped.
What really annoying is, there's no investigation etc from the police. Sucks.

Good article, but not surprising.

Study shows Indonesia's business climate among the worst in world
Dadan Wijaksana, The Jakarta Post, Jakarta

Mr. President, you have a tough job ahead: Indonesia has been ranked as one of the most difficult places in the world to do business in, a new report from the World Bank Group finds.

During his election campaign, President Susilo Bambang Yudhoyono has said improving the business climate in the country tops his list of priorities.

A better business environment would generate higher economic growth and eventually reduce unemployment.

The report, in the form of a book titled Doing Business in 2005: Removing Obstacles to Growth -- cosponsored by the World Bank and its private sector lending arm, the International Finance Corporation (IFC) -- should help the government decide what needs to be done.

Part of a series of annual reports investigating regulations that enhance or impede business activities, it ranks Indonesia along with Laos, Cambodia and Vietnam in the bottom quartile of the 145 nations surveyed on the ease of doing business.

Entrepreneurs in those countries found it more difficult to start, operate, or close a business than in most other East Asian nations.

At the other end of the scale, seven economies in the East Asia-Pacific region ranked in the top quartile of the 145-nation survey; New Zealand, Australia, Singapore, Hong Kong, Thailand, Taiwan and Malaysia.

"On average, it takes a business six procedures, 8 percent of income per capita and 27 days to get started in high-income OECD countries; in East Asian countries, the same process takes 9 procedures, 60 percent of income per capita and 61 days."

However, "Among the worst performers in time of business registration were Cambodia (94 days), Indonesia (151) and Laos (198)," the report says.

Indonesia has been relying on domestic consumption to fuel economic growth as investors remain wary of the country due to the adverse business climate here. Legal uncertainty, security issues, and the poor implementation of regional autonomy have added to the endemic problems of red-tape and corruption -- all major turn-offs to investors.

The economy is projected to grow by 4.8 percent and 5.4 percent this year and the next, respectively, which would be the fastest rate since the crisis. However, more foreign investment would make Indonesia's recovery faster and would soak up unemployment, easing the burden on the poor who are being hurt the most by the nation's economic slump.

IFC country manager German A. Vegarra said Susilo and his Cabinet were sending out strong signals they were committed to improving the country.

"We are optimistic that if he (Susilo) really does what he says, I think things will be better. Addressing unemployment is the key and that's what they have said must be addressed. So far, I like what I hear.

"Of course, it will take time. But (what) we expect is a lot of clear directions for improvement," Vegarra said in a recent interview.

Hans Shrader, the program manager for the IFC Business Enabling Environment service unit, meanwhile, offered ways to quickly improve the country's business climate.

He suggested a one-stop shop mechanism, in which municipal offices processed all the required documentation for businesses to attain permits or licenses.

"Another aspect is a regulatory impact assessment (of new laws).

"Before legislation is introduced to parliament, there should be an assessment as to what the cost of the legislation would be on businesses, and what its impact on the business environment would be," Shrader said.

It's pretty depressing that it takes 151 days to start up a company. This is way too long and costly. No wonder nobody want to invest in our country, it takes too damn long. It should take, at average, two months to start a business. I think one month should be a better option. i agree with the article that there need to be a one-stop shop mechanism to make it easier for everybody to start a business. The engine of growth is not with the big company, but with the SMEs.

Jakarta is opening up a one-stop center. Hopefully, they can cut down the time and trouble significantly.

What I can't understand is why it is actually taking so long. Can anyone with knowledge on the subject fill me? The Indonesian government is consuming more of the GDP than most other developing nations. So, it can't be that they can't hire enough people. Is it incredibly low productivity among government workers? Is the entire legal sector in complete chaos? What is the problem.

Jakarta is opening up a one-stop center. Hopefully, they can cut down the time and trouble significantly.

What I can't understand is why it is actually taking so long. Can anyone with knowledge on the subject fill me? The Indonesian government is consuming more of the GDP than most other developing nations. So, it can't be that they can't hire enough people. Is it incredibly low productivity among government workers? Is the entire legal sector in complete chaos? What is the problem.

There are 12 different procudures one must go through to gain the license to start a business. These procedures are: (1) Obtain the standard form of the company deed, (2) Notarize deeds, (3) Certificate of domicile, (4) Obtain NWPW number (taxes), (5) Deposit capital in a bank, (6) Pay registration fee at Treasury, (7) Register at Ministry of Justice, (8) Register with the Company Register, (9) Apply for publication, (10) Apply for trade license, (11) Registration of manpower, (12) Social security. Number 11 and 12 run simultaneously. It takes approximate 151 days with the Register at Ministry taking the longest time at 75 days. The administrative cost will set you back around $1,163. $1,118 for the notarize deed and $44 for the trade license. Of course, we all know that it will cost more then that with other "costs."

As comparison... in Oz
1. Register for a company (ACN number) $800
2. Register for a business name $70 (depend on the state)
3. Apply for Tax File Number and Australian Business Number ($0)
Step 1, 2, 3 can be done less then a day.

4. Register for appropiate license $various
Step 4 duration will depends on what business you going to do

5. Open a bank account $various
Step 5 depends on how long the queue at the bank is, opening a business account need an appointment

Step 4 and 5 is optional. Registering for ACN also optional.
So for a simple business with no license etc, all can be done in less than a day.
For some people step 3 is enough, and no cost involved and can be done online.

The company that i worked here told me that they need 120 days to get the permitt, before the permitt was issued, they already operated and doing business.....

I asked some of the local board guys and they said, What company needs are Legal certainty, fixing the standard of wages (which is very high in developing country) and Low taxes.

cheers

Latest Analysis: Indonesia's economy to grow close to 6% in 2005! :)

Forecast
Oct 25th 2004
From the Economist Intelligence Unit
Source: Country Forecast


Susilo Bambang Yudhoyono won a landslide victory in the second round of the presidential election against the incumbent, Megawati Soekarnoputri. He won despite the fact that a five-party coalition, accounting for 55% of seats in the House of Peoples' Representatives (DPR), backed Ms Megawati. Mr Yudhoyono campaigned on a reformist platform and has said that he will fill key cabinet posts with non-partisan technocrats. He has pledged to prioritise tackling corruption, job creation and economic growth. Fiscal policy will remain tight, but stimulus is expected to come from proposed amendments to labour and tax laws to make them more investor-friendly. Lower inflationary pressures in 2005 should enable interest rates to fall further. GDP growth is expected to accelerate in 2005 to 5.9% owing to reduced political uncertainty, solid private consumption and buoyant investment growth. The current-account surplus will be maintained, but it will fall relative to GDP.

Key changes from last month

Political outlook

Mr Yudhoyono faces a hostile DPR. However, the two largest parties, Golkar and the Indonesian Democratic Party-Struggle, are riddled with infighting and saddled with discredited leaders. The Economist Intelligence Unit expects Mr Yudhoyono to establish his authority over the DPR in the near term, but the legislative process is still likely to be protracted.


Economic policy outlook

The new government is expected to announce a reduction in the fuel subsidy. Its ability to enact this cut, despite widespread public opposition, will be an early indicator of the new administration's capacity to legislate effectively.


Economic forecast

We have revised up our forecast for real GDP growth in 2005 based on signs of buoyant consumer and business confidence following the election of Mr Yudhoyono. His proposed reforms to the investment climate should enable strong growth to be maintained in 2006.

Not Indonesian business, however since we're part of Asia: here's HK advices Asian single currency.

tata

Hong Kong serukan mata uang tunggal Asia

HONG KONG (Antara/XFN Asia): Kepala Eksekutif Otoritas Moneter Hongkong, Joseph Yam, menyatakan negara-negara Asia hendaknya mempertimbangkan penyatuan moneter demi kepentingan stabilitas finansial yang lebih besar.

Kendatipun beberapa isu, termasuk kurangnya mata uang andalan intra-regional dan perlunya bagi konvergensi, perlu diatasi terlebih dahulu, menurut Yam, hal itu seharusnya tak mengurangi Asia memiliki mata uang tunggal.

Dalam pidatonya di Nederlandsche Bank di Belanda, dia mengemukakan bahwa sementara para otoritas keuangan di Asia belum pernah melakukan pembahasan formal apapun mengenai penyatuan mata uang, daya upaya bagi kerjasama moneter telah dilakukan di kawasan ini.

Dikatakannya kecilnya ukuran pasar negara-negara berkembang Asia dan hubungan dengan modal internasional, telah membuat mereka rentan terhadap ketidakstabilan finansial.

"Jika mereka sepakat dengan pendapat ini, maka satu strategi jangka panjang alternatif jelas akan membangun pasar terpadu yang lebih besar yang mampu menyerap volatilitas modal internasional dan mengurangi ketergantungan padanya melalui peningkatan intermediasi finansial dalam pasar bersama tersebut.

Dengan kata lain, demi kepentingan stabilitas finansial yang lebih besar, Asia berkembang hendaknya mempertimbangkan penyatuan moneter," katanya.

Siemens wins 300 million euro order for Indonesian mobile network

JAKARTA (Bloomberg): Siemens AG, Germany's largest electronics company, won an order worth more than 300 million euros (US$383 million) to expand the wireless network of PT Telekomunikasi Selular (Telkomsel), Indonesia's largest cellular company.

Siemens, based in Munich, will provide the equipment in the next three years, the company said in an e-mailed statement.

Siemens will add additional base stations and upgrade the company's network with new switching technology, it said. (***)

The company that i worked here told me that they need 120 days to get the permitt, before the permitt was issued, they already operated and doing business.....

I asked some of the local board guys and they said, What company needs are Legal certainty, fixing the standard of wages (which is very high in developing country) and Low taxes.

cheers

since we're talking about this subject, can anyone tell me how to set up a company in Jakarta?

26 October 2004

Southeast Asia to receive new wave of US investments: experts

WASHINGTON: US companies are considering a new wave of capital investments to Southeast Asia following greater political stability and assurances of business-friendly reforms by leaders in the region, experts say.

The United States is the largest investor in Southeast Asia but there has been a lull in large American investments since 1997, when the region was struck by financial turmoil.

Recovery from crisis was dampened by threats from terrorism and the pneumonia-like Severe Acute Respiratory Syndrome (SARS) epidemic.

Now, both US multinational corporations and small and medium sized companies are eager to pump more investments in the region, buoyed by evolving reforms and political stability underscored by smooth leadership changes in Malaysia, Singapore and Indonesia, said Ernest Bower and Karen Brooks, two Washington-based experts on Southeast Asia.

Bower, the former president of the US-ASEAN Business Council, and Brooks, the ex-Asian chief at the White House's National Security Council, have joined forces and set up an advisory services firm to promote US-Asia business ties.

Their organization, BrooksBowerAsia, will work with a select group of American multinational firms to expand business links in the region.

"I know from working with the companies that there are new investment plans on the table. There will be a new wave coming in," said Bower, who had headed the US-Association of Southeast Asian Nations (ASEAN) Business Council for the last decade.

"We don't want to ride the change but we want to make the change happen," he told AFP, speaking alongside Brooks, a leading architect of US policy toward Asia during both the Bush and Clinton administrations.

They listed Indonesia, Malaysia, the Philippines, Singapore and Thailand as
potential destinations for the new American investments in the power, automotive, information technology, biotechnology and financial services sectors.

US companies have pumped into the region investments worth about 50 billion dollars so far. Bower said the investments were now valued twice the amount.

He said some American companies had faced trouble making new investments in Southeast Asia due to bureaucratic problems.

It is understood that the administration of ex-Indonesian President Megawati Sukarnoputri was unable to decide on about seven billion dollars in planned American investments in the oil and gas sector.

"Now the question is: will SBY's (new Indonesian President Susilo Bambang Yudhoyono's) team be ready to and able to make those decisions," Bower said.
"It is very possible that he will be but you got to approach that opportunity in a way that is more holistic and has a long term strategy," he said.

Yudhoyono has vowed reforms to attract investments that could fuel much needed growth in the largest Southeast Asian country fighting growing unemployment and terrorism.

Bower also said Malaysian Prime Minister Abdullah Ahmad Badawi's bid to promote transparency and rule of law as well as to open up parastatal companies had "attracted immense interest in boardrooms" in the United States.

Though Bower and Brooks are close to many ASEAN leaders, they said they would not act as a lobby group or as "agents" for Southeast Asian governments in Washington.

They would however spend a substantial portion of their time in Southeast Asia.

"We want to bridge primarily or least initially the business community but then the broader relationship," said Brooks, who had once lived and worked in Indonesia and China and speaks fluent Indonesian and Mandarin.

Under their modus operandi, Bower and Brooks would be integrated into Asian
teams of several multinational companies in the United States to help them make forays into the region.

To avoid working with competitors of companies in which they are integrated, the duo would be attached to only one company in each sector and limited sectors.

"We are going to be integrated into the teams of clients as opposed to picking up the phone every couple of weeks and fix a problem," Brooks said. - AFP

Copyright © 2004 Agence France Presse. All rights reserved.

That investment would almost be 5% of the GDP.

KTF, Samsung to form JV in Indonesia



A consortium led by mobile-phone carrier KT Freetel Co. and Samsung Corp. has agreed to mint a joint venture with Indonesia's PT. InfokomElektrindo to market mobile data and content in Indonesia, the companies said yesterday.
The $2.2 million joint venture, tentatively named Freecoms, will be established in November and start commercial services in January next year, according to KTF officials. The joint venture is targeting $1.5 million in revenue in its first year, selling services such as ring tones and caller information.

The Korean consortium, which includes KTF, Samsung Corp., the trading arm of Samsung Group, and local equipment maker Soft Teleware Inc., will own 51 percent of the joint venture.

KTF will have a 19.9 percent stake, while Samsung Corp. and Soft Teleware will take a 19 percent and 12.1 share, respectively. PT. InfokomElektrindo will take the remaining stake.

"Southeast Asia's telecommunications market has been growing by an annual rate of over 30 percent in the past few years and Indonesia is among the most important markets in the region," said Han Hoon, president of KTF.

"The joint venture will pave the way for our expansion in Southeast Asia, where we could market our advancements in code division multiple access technology and mobile Internet platforms to the region's 220 million people."

KTF has been attempting to expand beyond the matured domestic market in recent years, setting its sights on developing Asia.

In 2003, KTF agreed a $13 million deal with Indonesia?Ψs code division multiple access service provider PT Mobile-8 to provide consulting on wireless network management. The company also sold its NMS (network management system) solution to Mobile-8 for $4.5 million.

In August this year, KTF signed a $15 million agreement with Taiwan mobile operator Vibo Telecom Inc. to provide applications based on code division multiple access technology.

(thkim@heraldm.com)


By Kim Tong-hyung

Samyang bangun pabrik motor di RI

JAKARTA (Bisnis): Investor Taiwan siap membangun pabrik sepeda motor di Indonesia dengan kapasitas 100.000 unit per tahun dan investasi sekitar US$7 juta.
Dirjen Industri Logam, Mesin, Elektronika dan Aneka Deperindag (ILMEA) Subagyo mengatakan berdasarkan surat yang telah diterima dari kantor dagang ekonomi Indonesia di Taiwan, disebutkan bahwa salah satu produsen sepeda motor Taiwan yaitu Samyang akan mulai melakukan produksi pada tahun depan.

Bahkan, lanjutnya, investor tersebut telah membentuk perusahaan baru di Indonesia dengan nama PT Samyang Motor Indonesia yang berstatus PMA murni.
"Direncanakan kegiatan industri itu akan berlangsung di kawasan industri MM 2100 Bekasi. Jenis kendaraan yang akan diproduksi adalah jenis motor bebek karena jenis itu cenderung banyak diminati daripada motor sport," ujarnya kemarin.

Dia menjelaskan investasi yang ditanamkan seluruhnya berasal dari perusahaan Taiwan tersebut sehingga berstatus PMA murni.

Dia berpendapat bahwa keyakinan mereka untuk memasarkan produknya di Indonesia tanpa melakukan uji pasar terlebih dahulu-dengan cara mengekspor dalam bentuk CBU-menunjukkan bahwa negara ini masih relevan untuk dijajaki.

Menurut Subagyo, perusahaan itu diperkirakan telah melakukan studi kelayakan terlebih dahulu sebelum menjajaki untuk menanamkan investasi baru. Potensi pasar yang besar dan cenderung tumbuh makin mendorong minat mereka untuk berproduksi di Indonesia.

Berdasarkan catatan Bisnis tahun ini diproyeksikan penjualan sepeda motor mencapai 3,7 juta unit naik sekitar 30% dibandingkan tahun lalu yaitu.

Sedangkan tingkat utilisasi industri sudah mencapai 90% sehingga membutuhkan investasi baru baik berupa perluasan pabrik maupun pembangunan pabrik baru.

Investasi baru, lanjutnya, diharapkan tidak hanya di sektor otomotif saja, tapi juga dari sektor industri lainnya. Taiwan saat ini sedang giatnya melakukan ekspansi pasar di berbagai bidang perekonomian.

Subagyo mengatakan kegiatan investasi dari Taiwan di harapkan akan terus meningkat, karena pada akhir November mendatang akan ada kunjungan misi investasi Taiwan ke Indonesia.

"Mereka akan mengunjungi berbagai sektor industri yang ada di Indonesia di antaranya adalah elektronika, tekstil, industri kabel dan yang lainnya," tuturnya.

Kunjungan dari tim investasi itu, kata dia, diharapkan dapat memberikan masukan kepada pemerintah mereka sehingga ekspansi investasi di Indonesia terus bertambah.

Infrastruktur

Dia menerangkan rencana pembangunan pelabuhan Jakarta New Port diharapkan dapat menjadi sa-lah satu daya tarik iklim investasi di Indonesia. Karena itu, pembangunan pelabuhan tersebut harus dilaksanakan sesegera mungkin.

"Pembangunan pelabuhan baru yang sekarang sedang dilaksanakan dan diharapkan terus berjalan sehingga tidak terhenti karena berbagai polemik yang ada, pihak pemda harus memiliki komitmen untuk membangun fasilitas tersebut," tuturnya.

Menurut Subagyo, jika diperlukan ada kesepakatan antara Pelindo dan Pemda dalam pelaksanaannya sehingga pelabuhan itu dapat selesai seperti yang diharapkan yaitu pada tahun depan atau selambatnya 2006 mendatang.

"Kebutuhan pelabuhan sangat diperlukan untuk menunjang kinerja industri yang salah satunya adalah otomotif. Usulan Jetro dan masukan para pelaku usaha di sektor itu diharapkan dapat dilaksanakan secepatnya," tandasnya. (rni)

samyang?
ooo so they are a multi industry company..
i thought they only making instant noodle..

It seems most Indonesian companies posted or will post strong earnings in 9 months...very good news.


Indonesia Shares End Higher On Solid 9-Mo Earnings Hopes

JAKARTA (Dow Jones)--Indonesian shares ended higher Thursday as investors continued buying blue chips that are expected to post strong growth for the first nine months of this year, dealers said.

They added that gains in most Asian markets added to the positive sentiment on the local bourse, with the relatively stable rupiah providing support.

"If buying continues, the main index could hit a new record high Friday," said a technical analyst with a state-owned securities company.

The Jakarta Stock Exchange Composite ended up 12.935 points, or 1.5%, at 862.119.

Gainers led decliners 76 to 44, while 86 stocks were unchanged.

Volume was 2 billion shares valued at IDR1.25 trillion.

Telecommunication blue chips led the gainers.

Indonesian Satellite Corp. rose 4.4% to IDR4,750 on expectations of higher nine-month earnings. Indosat is expected to announce the earnings later Thursday.

Bellwether Telekomunikasi Indonesia gained 2.4% to IDR4,300 ahead of its nine-month earnings expected later this week. Both companies are expected to book higher nine-month earnings due to increased revenue from their cellular services.

Bank Mandiri, the nation's largest lender, jumped 3.3% to IDR1,575 on expectations of higher nine-month net profit due to an increase in lending. The bank is expected to announce its results Friday.

Most blue chips are expected to meet the deadline of reporting their nine-month earnings by October 30.

"Buying occurred across the blue chip board," said a trader with Catur Pilar Securities.

Dealers said they expect the market to trade higher Friday on further buying in blue chips.

Exports may grow by 9%
Zakki P. Hakim, The Jakarta Post/Jakarta

The country's non-oil and gas exports in the first nine months of this year were expected to register surprisingly strong growth, despite signs of slowing economic activity in key export markets due to the current global oil hike.

A senior official at the Ministry of Trade, speaking on condition of anonymity, said that the non-oil and gas export figure during the January to September period likely grew by around 9 percent from US$35.41 billion compared to the same period last year.

"BPS officials were surprised too... They have been checking with us repeatedly. But we'll still wait for the official result on Monday," he said.

He was optimistic that the government's 7 percent non-oil and gas export growth target of $50.73 billion for this year would be achieved.

The Central Statistics Agency (BPS) is expected to announce the official trade figures on Monday.

BPS export statistics official Dantes Simbolon confirmed the 9 percent growth figure.

But he said that the agency was still finalizing the trade figures.

Dantes said that the strong economic growth in China and other parts of Asia had contributed to the relatively stronger export growth of the country.

"The high gain is mostly due to China, which is now the locomotive in the region," he said.

Indonesia's largest non-oil and gas markets are Japan, the U.S., Singapore, China and Malaysia.

This year and next year, the Ministry also is hoping for an increase in exports of textile and apparel products, footwear and electronic components.

I wonder if they will also have the 24 hours store in their gas station, I heard Shell Caltex and Petronas will have the stores.

Indonesia says gives BP oil retailing license

By Muklis Ali


JAKARTA, Oct 31 (Reuters) - Indonesia has granted oil giant BP Plc. a licence to sell oil products in the retail market as part of efforts to open the business to foreign firms, a mines and energy ministry official said on Sunday.

"We have issued an in-principle approval to BP. BP wants to be involved in the wholesale business including trading and retail," Erie Soedarmo, director of processing at the mines and energy ministry, told Reuters.

Malaysian state oil and gas firm Petronas [PETR.UL] was awarded a licence in June to sell oil products, such as high octane gasoline, in the Indonesian retail market.

That followed the granting of similar licenses to Royal Dutch/Shell Group and five other operators in February, which paved the way for firms to directly import oil products.

Soedarmo has said there were many more companies interested in getting involved in oil product retailing, but he gave no details.

Indonesia is set to consume 60 million kilolitres (377 million barrels) of oil products in 2004, up from 57.4 million kilolitres (361 million barrels) in 2003, the government has said.

Indonesia, Asia's only OPEC member, imports 25-30 percent of its oil products. In 2001 it broke up state-owned oil and gas firm Pertamina's monopoly in the country's oil markets.

BPH Migas, the government's downstream regulator, is preparing to take over responsibility for oil products distribution from Pertamina starting from November 2005. (1 kilolitre=6.289 barrels

Another surprise news, the political stability really is or has BIG impact for the economy.

Indonesia says inflation slows in October

JAKARTA, Nov 1 (Reuters) - Indonesia's inflation rose a slower-than-expected 6.22 percent in the year through October, as increased food supply and a stronger rupiah currency reined in prices, the statistics bureau said on Monday.
Analysts had expected inflation to rise 6.38 percent in the year through October, boosted by food and clothing prices which traditionally increase ahead of the Muslim Eid al-Fitr celebrations at the end of the month-long Ramadan.

"The rupiah strengthened, so prices of imported goods tended to decline," said Standard Chartered Bank economist Fauzi Ichsan.

"The harvest was also normal. It seems that spending ahead of Eid al-Fitr in October had little impact on inflation."

However, Ichsan said increased price pressure could still be felt in the year through November since Ramadan continues into that month.

October's inflation slowed from September's 6.27 percent and August's 6.67 percent.

The rupiah strengthened about 0.7 percent in October. It was quoted at 9,082/9,092 to the dollar at 1019 GMT.

Inflation could pick up during the final months of 2004 due to the Ramadan holiday and the Christmas holiday in December, Statistics bureau chief, Choiril Maksum, told reporters.

Although Indonesia is the world's most populated Muslim nation, a significant number of people celebrate Christmas.

The government has forecast inflation will be seven percent at the end of 2004.

The bureau said Southeast Asia'a largest economy produced a trade surplus of $2.92 billion in September, higher than a year-earlier $2.32 billion, helped by surge in world oil prices.

Analysts had forecast just $1.93 billion for the period.

**Taken from thejakartapost.com**

GS Holdings plans to buy stake in Indonesian oil development

SEOUL (Bloomberg): GS Holdings Corp., the parent company of South Korea's LG-Caltex Oil Corp., said on Monday it decided to invest in an oil development project in Indonesia.

GS Holdings' board approved a plan to buy a stake in an international group that is developing oil fields in Indonesia, the company said in a filling to the Korea Stock Exchange. It didn't elaborate.

"We cannot say anything about the group and the project because of a confidentiality agreement. We expect to announce a deal by the end of this year," said Kim Sang-hyun, an official from the company's investor relations team.

GS Holdings is a partner with ChevronTexaco in unlisted LG-Caltex Oil, the country's second-largest oil refiner. The company also controls online shopping channel operator LG Home Shopping Inc. and retailer LG Mart Co. (***)

**Taken from thejakartapost.com**

Indonesian govt expects wider deficit this year

JAKARTA (Dow Jones): The Indonesian government expected on Monday the budget deficit to widen this year from the target of 1.3 percent of gross domestic product, after saying as recently as last week that the target could be met.

"The government will likely change the deficit target due to the high oil prices," Darmin Nasution, director general for financial institutions at the Ministry of Finance, told reporters. "It will announce it to the public either tomorrow or the next day."

Darmin declined to provide further details.

Last week, new Minister of Finance Jusuf Anwar said the target of 1.3 percent of GDP is achievable.

Currently the average oil price assumption in the state budget is US$36 a barrel, but oil prices in the global market remain well supported above $50 per barrel.

Higher-than-expected oil prices will increase the cost of fuel subsidies from the government's current target of nearly Rp 60 trillion ($6.59 billion), or 14% of its total spending this year.

The new administration under President Susilo Bambang Yudhoyono has said it won't make the unpopular move of hiking fuel prices this year, although it might do so in 2005 if oil prices remain high.

Darmin said the government will finance the bigger budget deficit this year with sales of assets pledged by former bank owners, and the government's remaining stakes in some local banks. (***)

I read in Detik.com earlier that Indonesia's non-gas-and- oil exports in Q3 has rose close to 11% from last year, which is great news for the economy.

Wow, the economy is really on the move. If SBY can manage to put forth a decent economic policy (which I've yet to see) and tackle corruption, 2005 could be a year in which FDI pours back into the country.

Did you guys know that Indonesia only has one billionaire, in dollar term? That family is the Halim family, owner of PT Gudang Garam. I would have thought there would be more billionaire in Indonesia. The family estimated worth is at around $1.4 billion. They are the 303th richest people in the world.

Indonesia's September exports reaches US$7.15 billion, an increase of 41.33% compared to September last year. Year on year accumulated exports has from Jan to Sep 2004 represents an increase of 10.77% compared to same period last year.

Ekspor September tembus US$7 miliar

JAKARTA (Bisnis): Ekspor September menembus US$7,15 miliar, melonjak 41,33% dari bulan yang sama tahun lalu, dan selama sembilan bulan pertama tahun ini mencapai US$50,74 miliar atau naik 10,77% dari periode yang sama 2003.
Menurut Kepala Badan Pusat Statistik Choiril Maksum, lonjakan ekspor September juga diikuti kenaikan impor menjadi US$4,23 miliar. Ini mendorong surplus perdagangan bulan tersebut mencapai US$2,92 miliar.

Lonjakan ekspor September, katanya, lebih banyak dipicu oleh perubahan input data Bea dan Cukai dari hardcopy menjadi softcopy, sehingga data yang diterima BPS lebih cepat dan lengkap.

"Kekurangan sistem lama adalah carry over karena keterlambatan data, tercecer, atau tidak masuk. Kelebihan sistem baru, data lebih lengkap dan cepat namun memerlukan perbaikan [sistem] validitas data," kata Choiril saat mengumumkan data perdagangan dan inflasi, di Jakarta kemarin.

Berdasarkan data BPS, nilai ekspor non-migas pada September tercatat menjadi US$5,68 miliar, naik 13,76%.

Kenaikan ekspor migas, menurut Choiril, dipicu oleh ekspor minyak mentah, hasil minyak, dan gas, terutama akibat lonjakan harga minyak mentah.

Kasubdit Ekspor BPS Dantes Simbolon mengingatkan peralihan sistem input data itu memerlukan evaluasi menyeluruh terhadap level ekspor bulanan, terutama antara Juni dan September.

Namun dia optimistis nilai ekspor akan melebihi total tahun lalu yang masih US$62 miliar. "Tahun ini masih mungkin mendekati US$70 miliar, meski tren dua bulan terakhir ini cenderung lebih rendah dari September," tutur Dantes.

Selama sembilan bulan tahun ini, data BPS menunjukkan adanya penguatan permintaan luar negeri terhadap produk non-migas Indonesia, terutama mesin/peralatan listrik yang mencapai US$4,43 miliar.

Urutan kedua dan ketiga masing-masing diduduki oleh mesin-mesin/pesawat mekanik US$2,46 miliar dan kayu/barang dari kayu US$2,43 miliar.

Pada Januari-September 2004, AS, Jepang, dan China menjadi tiga besar tujuan ekspor Indonesia, masing-masing US$6,04 miliar, US$5,96 miliar, dan US$3,52 miliar.

Sebaliknya, nilai impor September naik 5,11% dari Agustus, sehingga secara kumulatif pada Januari-September mencapai US$33,41 miliar. Angka ini naik 38,82% dibandingkan dengan periode yang sama tahun sebelumnya.

Sedangkan impor non-migas September sekitar US$3,09 miliar, dan selama sembilan bulan tahun ini mencapai US$25,18 miliar, naik 37,04% dari 2003.

Ekonom Citigroup Anton Gunawan mengatakan impor yang lebih tinggi itu akibat produksi domestik yang lebih baik serta kenaikan harga minyak.

Anton juga melihat tanda naiknya investasi yang tercermin dari tingginya pertumbuhan impor barang modal dan persetujuan investasi.

Menurut dia, pertumbuhan penjualan domestik yang lebih cepat dan produksi kendaraan bermotor juga mendorong impor permesinan, logam dan besi yang terkait dengan produk, kendaraan bermotor dan suku cadang.

Harga minyak dunia yang tinggi, lanjutnya, juga membantu mendorong kenaikan ekspor dan impor minyak dan gas.

Inflasi 0,56%

Dalam kesempatan itu, BPS juga mengumumkan inflasi Oktober yang mencapai 0,56%, dan secara tahunan (year-on-year) 6,22%, sehingga diperkirakan inflasi 2004 akan mendekati target 7%.

Anton berpendapat inflasi Oktober disebabkan faktor musiman akibat kenaikan harga bahan pokok menjelang bulan puasa dan hari raya Idul Fitri.

Dia melihat harga transportasi juga merangkak naik menyusul pembelian tiket untuk pulang kampung. Namun, lanjutnya, karena pemerintah tidak berniat segera menaikkan harga bahan bakar minyak maka tekanan inflasi tidak begitu besar.

BPS mencatat dari 45 kota, 36 kota mengalami inflasi, dan sembilan kota deflasi. Inflasi tertinggi terjadi di Gorontalo (2,17%) dan terendah Lhokseumawe (0,11%), sedangkan deflasi terbesar di Ambon (-0,88%) dan terkecil di Sibolga (-0,12%).

Pada Oktober, menurut BPS, kelompok bahan makanan menjadi penyumbang inflasi terbesar sekitar 0,3%, diikuti pendidikan, rekreasi, dan olah raga 0,08%, perumahan, air, listrik, gas, dan bahan bakar sebesar 0,07%. (luz/bas)

Hal Hill: Rebuilding Indonesia

November 02, 2004
INDONESIANS have a lot to feel proud about at the moment. The past seven years, since the onset of the Asian crisis, have been a period of unrelenting gloom: steep economic decline, widespread institutional and political upheaval, and serious communal tensions.

Yet political events in 2004 have been better than anybody could have dreamed about this time last year: a domestically popular and internationally respected president, elected with a clear and unchallenged mandate. The country went to the polls three times in six months. Each time the national elections were conducted fairly, the voter turnout rate was high (though voting is not compulsory) and there was minimal campaign violence.

The third serious terrorist attack in two years, in front of the Australian embassy on September 9, had tragic consequences for those affected, but it had virtually no effect on most financial and economic indicators.

Outside Indonesia, it is not widely appreciated how serious the recent economic crisis has been. During president Suharto's 32-year tenure, economic growth averaged more than 6 per cent per annum, with rapid and mostly broad-based improvements in social indicators. The economy is only now just back to pre-crisis levels, after the 13 per cent contraction of 1998. Indonesia was the worst affected of the Asian crisis economies.

The sense of injustice felt towards the West, particularly Washington (both the administration and the international institutions headquartered there), at the perceived rough handling in 1997-98 still runs deep.









Since 2000, the economy has been limping along at about half the rate of growth (in per capita gross domestic product) recorded in the decade before the crisis. Investment remains anaemic, at little more than half the rate pre-crisis. Unlike the other crisis-affected economies, foreign investment is still negative seven years on. Domestic investors are also holding back, preferring to invest in the stock market, shopping centres and other quick-return assets rather than longer-term projects.

Labour-intensive manufactured exports are languishing and Indonesia continues to lose market share to China. Despite record commodity prices, investment in the mining industry has all but dried up. Serious infrastructure bottlenecks are just around the corner. Corruption is just as widespread as under Suharto, but far less predictable. In the wake of the far-reaching decentralisation initiative of 2001, co-ordination between the three main tiers of government is weak.

The one key positive economic legacy of Megawati Sukarnaputri's administration is that, under her able finance minister, macro-economic stability was restored and the budget deficit was reined in to less than 2 per cent of GDP this year.

However, even here there are daunting challenges. Early last year, the government severed the automatic link between domestic and international fuel prices. Consequently, as international prices have risen steeply, the cost of the fuel subsidy has risen alarmingly this year, from a budgeted 14.5 trillion rupiahs to at least 63 trillion rupiahs (about $9.3 billion) this year. Indeed, the Government of Susilo Bambang Yudhoyono has little financial room to move: almost 60 per cent of the central government's expenditure goes on payments to the regions, debt service and subsidies.

It was in view of these and many other challenges that SBY's election win was greeted with great expectations at home and abroad, and why the cabinet announced shortly after his installation last Wednesday has disappointed many.

Central to this disappointment is the clear signal that SBY's nationalist vice-president will play a significant role in economic policy, that a smart but controversial businessman (who was bailed out by the government at the peak of the recent crisis) will be the co-ordinating economics minister and that a soon-to-retire senior official will be the finance minister. To put it bluntly, the first two of this troika are quintessential graduates of Suharto-era pribumi (indigenous Indonesian) business patronage politics.

It's not all bad news. Two of Southeast Asia's leading female economists, both with economics doctorates from the US, one with a strong Australian connection, have been appointed to the cabinet, although they are not in the central economics arena.

Also, the respected foreign minister stays on. A highly regarded former defence minister returns to that post. Megawati's planning minister, who specialised in virulent and increasingly erratic attacks on the International Monetary Fund and the World Bank, has gone.

The same fate has befallen her labour minister, whose populist labour market policies succeeded in shutting down many export-oriented garment and footwear companies, which had been the lifeblood of Indonesia's industrial export success from the mid-1980s.

We will have to suspend judgment for the next few months and see how the new economics team performs. But the euphoria of the President's election has largely evaporated, at least with regard to its economic management credentials.

Hal Hill is the H.W. Arndt professor of Southeast Asian economies at the Australian National University.

http://www.detikfinance.com/indexfr.php?url=http://www.detikfinance.com/index.php/detik.read/tahun/2004/bulan/11/tgl/02/time/16266/idnews/234816/idkanal/6

I think that's the record high !! Over reach KLSE ..

Record Stock High Despite Political Showdown
November 2, 2004 07:48 PM,

Laksamana.Net - The stock market is expected to improve on the all-time highs reached on Monday and extended on Tuesday this week amid a host of positive economic news despite intensifying political turmoil at the parliament.

The coalition of legislators backing President Susilo Bambang Yudhoyono, whose term began on October 20, is tiny compared to its opponents who now control the lion’s share of parliamentary positions, including leadership of the House of Representative’s 11 commissions.

The past week has seen intense lobbying and power plays over parliamentary representation and the controversial appointment of a new armed forces commander, on which the two coalitions have taken radically different stances.

The brewing storm at the parliament, however, did not have a noticeable effect on sentiment just down the road at the stock exchange, as positive economic news flowed thick and fast.

Indonesian companies and banks not only reported handsome profits to the third quarter starting last week but global oil prices have fallen and benign inflation and improving trade figures also boosted sentiment at the bourse.

The index extended an all-time midday high on Tuesday on the back of strong corporate performance, easing global oil prices and inflation and export figures.

Gains across regional markets were mirrored on the Jakarta bourse, which finally closed at a fresh record high of 881.4, up 2.06%, on high turnover of Rp1.75 trillion ($193 million).

Crude oil prices dropped below $50 a barrel overnight, while benign inflation and strong trade surplus were the domestic factors behind the record, reported Reuters.

The government announced late Monday that inflation fell to 6.22% in the year through October - lower than September's 6.27% and a government forecast of 7% this year.

Indonesia's exports surged 41.43% on-year in the month of September, reaching $7.152 billion - an all monthly time high - bringing the country's total exports to $50.74 billion in the first nine months of this year - representing an increase of 10.77% from the same period in 2003.

The trade surplus, meanwhile, hit $2.92 billion in September - higher than $2.32 billion in the year ago period, reported Antara.

Bellwether Telekomunikasi Indonesia (Telkom) led gainers at the bourse on Tuesday, jumping 5.2% to Rp4,575 after the company reported a 14% on year rise in nine-month net profit to Rp5.0 trillion.

Indosat expanded on Monday’s gains to end at Rp5,000, up 3%, on Tuesday and Bank Mandiri followed suit to end up 3.1% at Rp1,675. PT Bank Central Asia Tbk also rose 3% to Rp2,550.

Dealers said investors also bought back shares in cigarette blue chips on expectations of improved performance in full-year 2004, reported Dow Jones.

Gudang Garam gained 0.8% to Rp12,850, while its rival Hanjaya Mandala Sampoerna ended up 2.5% at Rp6,150.

"The main index is on track to end the year at the 900-point target," said an analyst with Kuo Capital Securities.

He said underlying sentiment toward Indonesian shares remains positive on expectations that the new government will be able to attract foreign investment.

Analysts generally see further gains ahead but, with relations between the President, his supporters and rival political parties still unclear, confidence in the new administration among investors and stock players may take a turn for the worse.

The JSX closed at 890 today!! :runaway:

Indonesian Shares End At Record High; Asian Mkts, US Vote
JAKARTA (Dow Jones)--Indonesian shares ended at a fresh record high Wednesday, tracking gains across Asian markets as uncertainty over the outcome of the U.S. election eased, dealers said.

They added that further foreign buying in blue chips that reported solid nine-month earnings also helped sentiment, but profit-taking by local funds erased some earlier gains.

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"In Asia, the markets welcomed the end of the uncertainty about the outcome of the U.S. election," said Adrian Rusmana, the head of research with BNI Securities.

The Jakarta Stock Exchange Composite rose 8.969 points, or 1%, to end at a fresh all-time high of 890.365.

Gainers led decliners 75 to 51, while 82 stocks were unchanged.

Volume was 1.66 billion shares valued at IDR1.6 trillion.

Dealers said foreign investors continued to buy shares in Telekomunikasi Indonesia and Indonesian Satellite after both companies reported solid nine-month earnings.

Bellwether Telkom rose 3.3% to IDR4,725 and rival Indosat gained 3% to IDR5,150.

Also higher were shares of Bank Mandiri, up 1.5% at IDR1,700 on expectations of higher nine-month earnings due to an increase in lending. Mandiri is expected to release its earnings later this month.

Profit-taking, however, hit Bank Danamon, which fell 1.4%, to IDR3,575 and Bank Central Asia, which dropped 2.9%, to IDR2,475.

Dealers said they expect the market to trade higher Thursday on continued buying in select blue chips.