Economy, Trade and Business II

[Alvin]

600 posts for Economy & Trade I.
Post all economic/business news here.

First post: Indonesia bond sale oversubscribed - a vote a confidence from investors for the bold decision to double fuel prices over the weekend and maintain fiscal prudence.

Indonesia Increases Bond Sale by 20% to $1.5 Billion

Oct. 5 (Bloomberg) -- Indonesia raised the size of its biggest overseas bond sale to $1.5 billion because of excess demand, after fuel subsidy caps restored investor confidence in the nation's finances.

Investors placed orders for about $3.8 billion of bonds, triple the original $1.25 billion on offer, two bankers familiar with the transaction said, asking not to be identified before the securities are priced later today.

The rupiah has gained 16 percent from a four-year low reached on Aug. 30 and stocks have rallied on optimism President Susilo Bambang Yudhoyono is making progress toward meeting budget goals and protecting foreign exchange reserves. The government is offering higher returns than debt of other developing nations with similar ratings to attract investors.

``They are finally getting the budget in order,'' said Anton Hauser, who holds the nation's dollar bonds among the 1.1 billion euros ($1.3 billion) of emerging market debt he helps manage at Vienna-based Erste Sparinvest KAG. ``They have also tried to keep the currency quite strong by raising interest rates.'' Hauser said he plans to buy the new bonds.

The central bank yesterday boosted its reference rate for bill sales, a borrowing benchmark, to 11 percent to curb inflation and support the rupiah. Yudhoyono's government on Oct. 1 more than doubled retail fuel prices to cut subsidies amid record crude oil prices and keep the budget deficit at about 0.9 percent of gross domestic product.

Yield Offer

Higher energy prices may also curb demand in the only member of OPEC that is a net importer of oil. Indonesia had $30.4 billion of foreign reserves as of Sept. 23, versus $36.1 billion at the end of last year, according to the central bank.

The offering of 10-year and 30-year bonds is the biggest overseas debt sale by the government of Southeast Asia's largest economy. The government proceeded with the bond sale four days after suicide bombings killed 22 people on the island of Bali.

The government plans to price $900 million of 10-year bonds and $600 million of 30-year debt today in New York, according to the e-mail, which was sent to investors by one of the sale's arrangers.

The government is set to price the bonds at the lower end of the range of its target yields, the e-mail said. Indonesia expects to price the 10-year bonds yielding 7.625 percent to 7.75 percent, according to the e-mail. The government is seeking to price the 30-year bonds to yield 8.625 percent to 8.75 percent, the e-mail said.

Citigroup Inc., Credit Suisse First Boston and Merrill Lynch & Co. are arranging the sale. Mulia Nasution, director general for treasury at the Finance Ministry, declined to comment when contacted by telephone in Jakarta.

Higher Returns

Indonesia's 7.25 percent bond due in April 2015 yielded 7.4 percent as of 11:50 a.m. in Singapore, according to data provided by Deutsche Bank AG. The yield is 15 basis points higher than it was on Sept. 30, before the Bali bombings.

``They are willing to offer a certain amount of yield pickup over the existing 2015 maturity bonds,'' said Dilip Parameswaran, head of Asian credit research at Calyon in Hong Kong. ``All the things that the government has been trying to do are the right things in the right direction, so bond investors would be happy to buy into these bonds.''

Venezuela's 9.375 percent dollar bonds due in January 2034 yielded 7.9 percent, according to data provided by Deutsche Bank. Venezuela's bonds are rated B2 by Moody's and B+ by S&P, the same as Indonesia's debt ratings. Brazil's 8.25 percent bonds due in January 2034 are yielding 8.3 percent. Brazil is rated B1 by Moody's and BB- by S&P, one level higher than Indonesia.

Buy Recommendation

UBS AG recommended investors buy Indonesia's dollar- denominated bonds following the government's cap on fuel subsidies. Standard & Poor's on Oct. 3 said the decision was ``encouraging'' and will spur investor confidence.

The rupiah rose 0.5 percent to 10,126 against the dollar as of 11 a.m. Jakarta time from late yesterday in Asia. The rupiah slid 7.6 percent from June through to September, reaching 11,800 on Aug. 30, the weakest since April 30, 2001.

Indonesia has the equivalent of $140 billion of debt, including $78.8 billion overseas as of the end of May, central bank data show.

Indonesia's latest bonds are rated B+, four levels lower than investment grade, by S&P. They're rated at BB-, three levels lower than investment grade, by Fitch Ratings.

The country's debt is rated B2, five levels lower than investment grade, by Moody's Investors Service. It has dollar bonds maturing in 2006, 2014 and 2015.

Bank Indonesia yesterday said it lowered its forecast on the nation's economic growth for 2005 to between 5.7 percent and 5.9 percent, from 5.9 percent to 6.1 percent.



To contact the reporter on this story:
Netty Ismail in Singapore nismail3@bloomberg.net.

[Alvin]

IMF welcomes Indonesia's 'courageous' decision to cut fuel subsidies
10.05.2005, 07:25 AM

SINGAPORE (AFX) - The International Monetary Fund welcomed Indonesia's 'wise and courageous' decision to cut fuel subsidies and urged other countries to do the same.

Maintaining fuel subsidies will hurt countries in the longer term, top IMF economists told a forum in Singapore, adding that any reduction should be calibrated and well explained to the public.

'This has been an extremely good step in the right direction,' IMF chief economist Raghuram Rajan told the Singapore Press Club.

'We welcome this step and we think it is something that many countries in the region should adopt.'

In a move to avert a potentially explosive fiscal crisis, cash-strapped Indonesia said Saturday it was more than doubling the average cost of fuel, effectively slashing fuel subsidies.

The decision sparked street protests but the IMF said the move should shore up investor confidence in the country.

'The subsidies were weighing on the government's fiscal account and there were concerns being expressed by both international and domestic investors,' Rajan said, adding that Jakarta's subsequent move to raise interest rates was aimed at warding off inflation.

The IMF's deputy director for Asia, Wanda Tseng, described the move as a 'wise and courageous decision'.

She said the susidies were becoming unsustainable as they accounted for 25 pct of government spending.

The IMF economists said governments should fully explain to their people that oil prices are something they do not control, while providing targetted help to the poorest segments of society.

Tseng said it was still too early to discern the impact of the reduction of the subsidies on the Indonesian economy but said it should boost investor confidence.

'I think the government has put on a very solid foundation for further growth and further development of the economy.

'And on the energy side, I think it's very important in terms of energy conservation and also investments. Indonesia lags in investment in the oil sector and I think this is a positive step from that point of view,' she said.

[Alvin]

NOt so positive assessments on growth.
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Indonesian Growth May Falter on Borrowing, Fuel Costs (Update1)
Oct. 5 (Bloomberg) -- Indonesia's economy will grow less than previously expected this year because of higher borrowing and fuel costs designed to shore up investor confidence in the nation's finances, analysts said.

Southeast Asia's largest economy will expand by 5.2 percent in 2005 after Bank Indonesia yesterday raised its key interest rate by a full point to 11 percent and the government on Oct. 1 more than doubled energy prices, according to the median forecast in a Bloomberg survey of six economists. The previous median forecast was 5.6 percent.

``What we are looking at is an economy on the verge of overheating, said Ong Sin Beng, an economist at JPMorgan Chase & Co. in Singapore who cut his growth forecast to 4.7 percent from 6.1 percent. ``These are exactly the measures we need to see to bring it more into balance.''

President Susilo Bambang Yudhoyono's government raised fuel prices and the central bank increased interest rates for the fourth time in nine weeks in a bid to stem a decline in the rupiah and attract the $150 billion Indonesia needs in the next five years to spur growth and pull 30 percent of its 238 million people out of poverty. Bus drivers went on strike and about 3,000 people demonstrated to express concern that rising borrowing and energy costs will hurt consumers.

``You are looking at short-term pain but long-term gain,'' said Lee Heng Guie, an economist at CIMB Securities Sdn. in Kuala Lumpur who cut his growth forecast for 2005 to 5 percent from 5.5 percent. ``They want to restore confidence in the rupiah, because if the currency is not stable then investor's won't come in.'' Lee also cut his forecast for next year to 4.8 percent from 6.5 percent.

Gross Domestic Product Growth (yoy%)
2005 2006
Forecast as at After Before
-------------------------------------------------------------
Median 5.2 5.6 5.2
Number of Forecasts 6 6 6
-------------------------------------------------------------
CIMB 5.0 5.5 4.8
Mandiri 5.0 5.5 5.0
JPMorgan 4.7 6.1 5.4
Citigroup 5.6 5.6 5.6
Standard Chartered 5.5 5.5 5.7
Forecast 5.3 5.7 4.5

[Alvin]

Good news on Investment front. From Jan - September , realisation of FDI jumped 160% compared to last year to Rp72.53 trillion (US$7.64 BLN). Domestic investement also increased 21%.

[Alvin]

http://www.weforum.org/site/homepublic.nsf/Content/Growth+Competitiveness+Index+rankings+2005+and+2004+comparisons

[David-80]

Well..currency strategist is bullish on Indonesian rupiah, another good indicator for the country.


Currency Strategists: Standard Chartered Is Bullish on Rupiah

Oct. 6 (Bloomberg) -- Investors should bet on a gain in the Indonesian rupiah after the central bank raised its benchmark interest rate to a two-year high, said Marios Maratheftis, a currency strategist at Standard Chartered Plc.

The rupiah is up 5 percent since sliding to a four-year low on Aug. 30 and the bank said it's now confident advising clients to open a short position in the dollar against the rupiah. A short position is a wager on a currency's decline. The call was made after Bank Indonesia on Oct. 4 raised its rate to 11 percent, the fourth increase in nine weeks.

``A few weeks ago the currency came under increasing pressure, but since then the policy response has been very encouraging,'' said London-based Maratheftis. ``They've increased the interest rate aggressively and this is one of the conditions that was needed to stop the attack on the currency.''

Standard Chartered, a U.K. bank that gets two thirds of its profit in Asia, predicts the rupiah will advance to 9,700 per dollar by year-end from 10,030 at 5 p.m. in Jakarta yesterday.

The firm also recommended buying six-month rupiah non- deliverable forward contracts. Forward contracts allow investors to bet on the future value of a currency or hedge investments denominated in it.

The comments suggest investors judge Indonesia doesn't face a crisis similar to that of 1997 to 1998, years in which the rupiah lost 56 percent and 33 percent respectively. International Monetary Fund Chief Economist Raghuram Rajan told reporters in Singapore yesterday that higher rates and the government's decision last week to boost fuel prices are a ``step in the right direction.''

Bank Indonesia may lift the benchmark rate to 12 percent by the end of the first quarter of 2006, Standard Chartered predicts.

Fuel Prices

The rate increase came three days after President Susilo Bambang Yudhoyono almost tripled kerosene prices and more than doubled diesel tariffs to cap the energy subsidies that eroded confidence in the nation's finances.

The price increase will allow the government to keep its budget deficit at 24.9 trillion rupiah, or about 0.9 percent of the country's gross domestic product. The currency plunged 8.9 percent on Aug. 30 as the price of crude oil climbed to a record $70.85 a barrel.

``Indonesian authorities have done much to repair their damaged policy credibility,'' Standard Chartered's currency strategy team, led by Callum Henderson in Singapore, wrote in a report yesterday.

Maratheftis, who has a Masters in Economics and Finance from the U.K.'s University of Warwick and joined the bank from Greece's Alpha Bank SA, confirmed the report's contents.

`More Optimism'

Investors pushed the rupiah lower in five of the past eight weeks on concern rising crude oil prices would force the government to buy more dollars to finance fuel subsidies to keep energy affordable for the nation's 40 million poor. Indonesia is the only OPEC member that is a net importer of oil.

``The worst for the Indonesian rupiah is over for now,'' Michael Straughan, an emerging-market economist at American Express Bank in London, said in an interview yesterday. ``There is more optimism that Indonesia will tackle these problems and that should be better going forward for Indonesia.''



To contact the reporter on this story:
Jake Lee in London at gpjlee127@bloomberg.net

Last Updated: October 6, 2005 02:45 EDT

[Alvin]

Short term pain for long term gain...:)
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Thursday, October 06, 2005

Indonesia’s economy on the mend: analysts

SINGAPORE: Indonesia’s economy is on the mend, recovering from the brink of a crisis caused by Jakarta’s reluctance to face up to soaring international crude oil prices.

Analysts said last weekend’s average 126 percent fuel price rise is certain to fuel inflation, trigger further rate rises and slow growth in the coming quarters. But the measures are also likely to put the economy on a firmer footing in the long term.

“Things are getting under control,” said Ai Ling Ngiam, associate director at rating agency Fitch, which rates Indonesia’s overseas debt BB-, below investment grade.

“This administration is showing strong leadership. The central bank is becoming more proactive and the government has stepped up to the plate to make fuel subsidy cuts.” The markets are already cheering.

A proposed $1.5 billion global bond, due to be sold later on Wednesday, received $3.5 billion in orders. Jakarta’s benchmark stock index is up 16 percent from an eight-month trough on Aug. 30 when investor confidence in the economy plunged.

Even the rupiah, Asia’s worst-performing currency this year, is up 16 percent from a four-year low hit on Aug. 30 despite the Bali bomb blasts last weekend that killed 22 people and injured 138.

“The oil price will have some impact on growth but the government has put a very solid foundation for further growth in the economy,” Wanda Tseng, Asian department deputy director for the International Monetary Fund.

For months, that was not the view from the markets. When investors demanded the government cut expensive fuel subsidies in the face of soaring international crude oil prices, President Susilo Bambang Yudhoyono held back, fearing higher gasoline and kerosene costs could spark social unrest.

Ditto the central bank. It dithered over raising interest rates as inflation soared towards doubled digits, lest higher borrowing costs killed economic growth. The dilly-dallying cost the central bank credibility and hurt the president’s image as an economic reformer. The rupiah, stocks and bonds plunged. The government and the central bank finally gave in to investors in the past month.

Bank Indonesia, the central bank, has raised the key one-month target rate to 11 percent from 8.75 percent two months ago. The tightening included a higher-than-expected 1 percentage point rise on Tuesday as the inflation rate in September soared above 9 percent, its highest level since December 2002. The bank has also moved to mop up excess cash from the financial system and to curb speculation against the rupiah.

More rate hikes: The government doubled the price of gasoline and diesel and trebled the cost of household kerosene, with effect from Oct. 1. The moves were designed to move domestic prices into line with global costs and to curb excessive fuel imports and stem a decline in the country’s balance of payments.

The price rises will give a significant boost to inflation, so interest rates have yet to peak, analysts said. “We expect the reference rate will peak at 15-16 percent in the near term, then subside with inflation,” said Tim Condon, head of Asian markets research at Dutch Bank ING, in a report. reuters

[Alvin]

October, 06 2005 @ 06:06 pm

Wake-Up Call Of Gas Price Rises

Saturday morning October 1, the first day of the new gasoline prices in Indonesia. In Jakarta, traffic looked normal. Private cars, especially the popular new small model Toyotas, Daihatsus and Hondas, were still jamming the road at the traffic lights near my house. Not many complaints were heard from those cars’ owners, the urban middle class, who can afford to buy a vehicle, or are at least considered qualified by the auto agent for a loan. Certainly they are not the urban poor. They have been, and are still, enjoying a state subsidy for the gasoline they waste in traffic jams. I can tell you that I don’t feel happy if they still take public money for their privilege as car owners. They produce emissions that pollute Jakarta’s air, take up so much public space and push pedestrians off the streets, give incentives to car manufacturers to sell more (500,000 units targeted per year) and prompt policy makers come up with falsehoods such as: urban traffic problems would be solved by providing more cars, building or extending roads, or introducing more minibuses, minivans or taxis. Their myths about private cars are an example of urban transportation’s stupidity.

We should stop this bogus policy argument. Gasoline (or any product) should be sold for a minimum on par with its production cost. Car owners should pay the real price (which is still not real if we calculate all the environmental and social impacts). We should be clear on this principle; no one should spend public money on one’s personal consumption. Simply protesting “no price increase” is equivalent to saying, “keep spending public money on private car owners and non-poor people”. This is an issue about fair trade; we purchase on par with the production cost (plus a normal profit margin to sustain production facilities). Otherwise, should I ask your grandmother to pay for me? It is a more straightforward transaction.

Then our readers may ask, what about all the economic impacts of the fuel price rises? Inflation pushing up prices of other goods, the higher cost of living, the fate of the urban poor, and so on. This is exactly where those questions have misled us. This year’s increase in crude oil prices is just a daytime wake-up call. The increasing number of dollars spent on importing crude oil that we need to fill the gap of our low domestic production is only part of the problem. With our dwindling dollar reserves, false assumptions in the national budget, and very low real income from exports, then the wake-up call has become an explosive bang at our front doors.

The second issue is about the distribution of a new saving of public money, where the real political issues lie, how we make a policy, political decisions on how to best spend the money to give maximum benefit to most people. If I am a poor city guy I will demand the government build decent, affordable (and subsidized) commuter trains or inner-city monorails, bicycle lanes secured from motorcycles and private cars, better pedestrian paths, free school busses, etc. Well, it takes time to build all of those facilities. So while waiting, what should be done to overcome the current price hike? Allocate some money for the targeted subsidy. Be creative in helping the poor. For example, in addition to gas coupons, why not have a quota coupon for public buses, based on the average daily fuel consumption to serve regular passengers per day? We can allocate X number of liters of fuel per car at the subsidized price. At least it could help companies meet their fuel expenses. We can continue these micro-management alternatives, a little pain for relief efforts, but we are still missing the target if we do not address the fundamental issue: Indonesia’s declining oil and gas production.

The country’s current production has been steadily declining each year over the past decade, while consumption continues to increase. At the same time, the cycle of oil production is not as simple as cooking instant noodles. If new oil explorations were being started now (and there aren’t!) the production would only enter the market in four or five years. So, imagine that national production capacity is still declining, not even maintaining the current level. Getting back to being a net exporting oil country is a dream now! Just to match the existing consumption level (so we don’t need to import at the international market price) is already a big, big accomplishment, if we can achieve it.

Why? Simply a sum of several factors: the notoriously corrupt, rent-seeking practices, and mafia-like oil and gas businesses. A total failure that is illustrated by an international industry’s report that put Indonesia in the lowest ten percent of 55 countries in the world targeted for oil and gas investment. While President SBY on his overseas trips has called to investors to come, he has still not yet conducted a total house clean-up. Praise is due for cracking down on the theft of Pertamina’s oil by insiders and army backers (the first time an Indonesian president has done so since the rot started during the 1970s with Ibnu Sutowo’s corruption of Pertamina), but this is only cleaning dirty fingernails while the hands remain covered with filth. Wake up Mister President, the rats are hiding in your kitchen!

Only a total restructuring of the oil and gas (and national energy) policy would end this routine oil price nightmare. And it still takes more than one full term of the current regime to make it happen – if we start it now. So what we should expect? C’mon, wake up Indonesia! You are on the brink of collapse (again). Don’t make false calls again. Don’t just get so frustrated and run amok and kill the innocents! That won’t solve the problem, but will only makes things worse. If we never make our minds up straight, then be prepared, we are entering the twilight zone. It may take you to a completely different world you never imagined before – a different Indonesia: a desperately poor, dying, borokan (festering) country!

By: Kemal Taruc | Category: Economy

[Ara]

I know this is a shot in the dark:

Ada yg kenal orang yg bikin polyester yarn filament ngak? Gue ada teman yg perlu produk ini.

[Alvin]

Indonesia Jan-Sept FDI approvals 10.66 bln usd vs 8.33 bln
10.06.2005, 04:57 AM

JAKARTA (AFX) - Foreign direct investment approvals in Indonesia rose 28 pct in the nine months to September to 10.66 bln usd from 8.33 bln in the same period last year, the National Investment Coordinating Board (BKPM) said.

It said in a report that domestic investment approvals in the nine months grew to 38.24 trln rupiah from 34.33 trln a year earlier.

Actual foreign direct investment in the first nine months of the year amounted to 7.64 bln usd compared to 2.94 bln a year earlier, while actual domestic investments amounted to 11.97 trln rupiah compared with 9.90 trln.

The board records actual investments as investment projects that have begun producing goods and services.



(1 usd = 10,125 rupiah)

berni.km@xfn.com

[Alvin]

anyone heard of this guy?
----------------------------------

U.S. billionaire scopes possible RI investments


Rendi A. Witular, The Jakarta Post, Jakarta

In a sign of increasing U.S. business confidence in Indonesia's business climate, U.S. billionaire David "Bondo" Bonderman met with President Susilo Bambang Yudhoyono late on Wednesday to explore investment opportunities here.

Bonderman, who flew by private jet to Jakarta for a two-day visit, is the founding partner of Texas Pacific Group (TPG) -- one of the largest U.S. private equity firms with over US$20 billion under its management.

Among the companies and brands owned by TPG are Ducati Motor Holdings, J. Crew Group, Raffles Hotel, Metro-Goldwyn-Mayer Inc., Debenhams Food and Beverage, Burger King, Del Monte Foods, Punch Taverns, Bally and Seagate Technology.

During the one-hour meeting with Susilo at the Presidential Palace, Bonderman, who has a degree in Islamic law, sought an update on the government's economic and legal reforms before his investment firms decided to invest here.

"We are quite serious to explore investment opportunities in Indonesia as we believe (the domestic) investment climate is improving," Newbridge Capital LLC managing director Timothy Dattels told The Jakarta Post after the meeting.

Newbridge is a subsidiary of TPG that focuses in making direct investments in Asia. The firm manages some $2 billion in the region, including an acquisition of Advanced Interconnect Technologies from Indonesian automotive kingpin PT Astra International in 1998.

Dattels said Bonderman was very happy with the efforts taken by Susilo's government to stamp out corruption, improve legal certainty and improve the political and business climates.

When asked if terror attacks over the past four years -- and in particular, the latest to hit the resort island of Bali -- would discourage the group from investing here, Dattels said such incidents were not very concerning as security problems had become a global issue faced by many other countries.

"We are pretty comfortable in Jakarta, in terms of security. It is actually not our utmost concern, as everywhere in the world there are security problems," he said.

TPG through Newbridge has invested in a variety of industries in Asia, including consumer food and beverage, semiconductors, port services, hotel and property management, steel, banking and financial services, software development and telecommunications.

TPG generally seeks opportunities requiring equity investments of between $100 million and $500 million.

However, Dattels said the group would need some time before taking any decision to invest since it was still seeking further equity investment opportunities in certain sectors in the country.

President director of JPMorgan Indonesia Gita Wirjawan, who accompanied Bonderman in meeting Susilo, said the President had conveyed his appreciation of Bonderman for his interest in Indonesia.

"President Susilo said the visit from Bonderman will give a positive signal to other global investors to start seeking investment opportunities in Indonesia as the business climate here is improving," he said.

[Alvin]

Foreign direct investment on upward trend: BKPM


Urip Hudiono, The Jakarta Post, Jakarta

Foreign direct investment (FDI) is maintaining its upward trend, data from the Investment Coordinating Board (BKPM) shows, ahead of a possible slowdown due to rising fuel prices and interest rates, and jitters resulting from the Bali bombings.

BKPM announced on Thursday that actual investment realization -- from both domestic and overseas sources -- in the first nine months of the year had increased two-fold from the same period last year, reaching a total of Rp 84.5 trillion (some US$8.45 billion).

FDI realization for the January to September period alone, BKPM chairman Muhammad Lutfi said, had more than doubled to $7.64 billion, from $2.94 billion in the corresponding period a year earlier.

New FDI being realized in the transportation, warehousing and communications sectors led the advance with 44 projects valued at $2.19 billion, ahead of 32 projects worth $1.09 billion in the chemical and pharmaceutical industry, and 26 projects worth $891 million in the construction sector.

The bulk of FDI realization came from Singapore (84 projects worth $2.09 billion), the U.K. (58 worth $1.22 billion), and Japan (111 worth $983 million).

Domestic investment, meanwhile, which grew by nearly 21 percent to Rp 11.97 trillion until the year's third quarter, were mostly in the food processing industry (with 28 projects worth Rp 2.7 trillion), followed by the agriculture and plantation sector (10 projects worth Rp 1.58 trillion), and the textile industry (18 projects worth Rp 1.5 trillion).

In total, domestic and foreign investment realization had provided jobs for 197,643 workers, according to the data.

Other parts of the BKPM report show that total investment approvals also increased by nearly 23 percent to a value of Rp 139.5 trillion in the third quarter compared to the same period last year, with FDI approvals alone rising some 28 percent to Rp 101.29 trillion, representing around 72% of total investment approvals.

The government is targeting Rp 179 trillion worth of investment approvals for 2005, with at least Rp 50.1 trillion being actually realized within the same year.

Indonesia is struggling to lure back foreign investment -- which reached a peak of $39.66 billion in 1995, but then collapsed to $13.64 billion following the 1997-1998 Asian financial crisis -- with the government vowing to curb corruption and bureaucratic red-tape, guarantee legal certainty and improve the country's infrastructure.

On concerns that a recent concoction of rising fuel prices, inflation, higher interest rates, and the latest Bali bombings may hamper further investment growth, Lutfi remained upbeat that the year's target would be achieved.

"It will, of course, increase the risk and cost of investment, but investors still see Indonesia's large market as the main attraction," he said.

[Ara]

Among the companies and brands owned by TPG are Ducati Motor Holdings, J. Crew Group, Raffles Hotel, Metro-Goldwyn-Mayer Inc., Debenhams Food and Beverage, Burger King, Del Monte Foods, Punch Taverns, Bally and Seagate Technology.
That is a very impressive list.

[henry tan]

WOW, FDI still remain strong in the 3Q 2005! despite rising prices in 3Q 2005.
thanks for the list Alvin :D

[David-80]

FDI will keep coming next year, especially since many infrastructure projects are ready to start, such as kuala namu medan, lombok airport, jakarta cgk extension, highway in central java, etc.

anyway

Indonesia signs 8 oil contracts, delays Conoco deal

JAKARTA, Oct 7 (Reuters) - Indonesia has delayed signing an oil and gas exploration deal with ConocoPhillips until December as the No. 3 U.S. oil firm has not received consent from its head office, an energy official said on Friday.
But Jakarta has inked contracts with eight firms, including Malaysian-based Dutch company, Zaratex NV, which was awarded the Lhokseumawe block, onshore and offshore Aceh province.

Total investment commitments from the eight companies were $202 million for six years, said Novian Thaib, director of exploration at the mines and energy ministry.

"The signing with ConocoPhillips is delayed because the company has not yet received approval from its headquarters. There is no problem," Thaib said.

Conoco has won the Amborip VI (Arafura Sea) block offshore Papua.

"We plan to sign with ConocoPhillips in December," he said


Thaib said the government signed contracts with mostly local firms that include PT Bunga Mas Energi for Bungamas block, onshore South Sumatra, and PT Endeavour Energy in Bengkulu block, onshore and offshore Bengkulu province in the southern part of Sumatra island.

PT Bumi Parahyangan Ranhill Energia, a consortium of Malaysian and Indonesian firms, signed contracts on Citarum block, onshore West Java.

The government also sealed a contract with PT Star Energy for the Sebatik block, onshore and offshore of East Kalimantan.

Deals were also signed with local firm Green Star Assets Ltd. for the East Kangean block, offshore East Java; with Benuo Taka to explore the Wailawi block, onshore East Kalimantan, as well as with PT Sumatra Persada Energi for the West Kampar onshore block in Central Sumatra.

[tata]

Indonesia is struggling to lure back foreign investment -- which reached a peak of $39.66 billion in 1995, but then collapsed to $13.64 billion following the 1997-1998 Asian financial crisis -- with the government vowing to curb corruption and bureaucratic red-tape, guarantee legal certainty and improve the country's infrastructure.


anyone knows what's the total FDI from years '99 to '04?

[Alvin]

anyone knows what's the total FDI from years '99 to '04?

If I'm not mistaken, last year (2004) was our lowest point ever with FDI only amounting to something less than US$10 billion...

[tata]

If I'm not mistaken, last year (2004) was our lowest point ever with FDI only amounting to something less than US$10 billion...

yea..... it's a loooong way to go back to $39.66 billion.
But never mind, we'll make it!

[Alvin]

^^ well if the positive trend continues hopefully we'll reach at least US$15 BLN this year.

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Indonesia Listed As Biggest Song Piracy Country




JAKARTA, Oct 8 (Bernama) -- After being branded as one of the countries in the world with the highest corruption rate, Indonesia is now classified as a country with highest song piracy rate.

According to a report by the Indonesian news agency Antara, the remark was made by Chairman of the Association of Indonesian Singers, Song Composers and Music Arrangers (PAPPRI) Darma Oratmangun in meeting with House Speaker Agung Laksono here on Friday.

Darman said that the painful accusation was launched by 103 member countries of the Confederation of International Community of Arrangers and Composers (CICAC), and 204 copyrights agencies.

The allegation came when we, members of the PAPPRI management, were attending an international meeting of the CICAC in Amsterdam on September 21-23, 2005, he said.

Darman added that PAPPRI tried to deflect the accusations at the meeting to maintain the good image of Indonesia in the eyes of the outside world.

PAPPRI opined that the House and the government should immediately restructure trading procedures of the Indonesian music industry.

--BERNAMA

[Alvin]

Monday October 10, 8:13 AM
Indonesia opens graft trial of ex-Mandiri bankers

JAKARTA (Reuters) - The former CEO and two other ex-directors of Indonesia's biggest bank went on trial on Monday over corruption charges in a case that forms a central plank of President Susilo Bambang Yudhoyono's campaign against graft.
Former PT Bank Mandiri Tbk chief executive officer Edward Neloe and two former directors, I Wayan Pugeg and M. Sholeh Tasripan, have been detained since May amid probes into problematic loans from the bank to a range of local companies.

Prosecutors on Monday began by reading out an indictment that covered what they called an "imprudent" 160 billion rupiah ($16 million) loan to PT Cipta Graha Nusantara (CGN), a little-known firm based on Indonesia's Sumatra island.

"They violated the law together by enriching themselves or other people or other corporations causing a loss to the state," prosecutor Baringin Sianturi told the court, referring to the three men and the 2002 loan from the state-run bank.

"They agreed to give loans without ... objective, honest and prudent judgment. The disbursement was carried out in a day when others take at least one week to a month."

The three defendants, all wearing crisp white shirts with ties and dark trousers, are being tried together at the South Jakarta district court. They looked sombre when they entered the courtroom, and made no comments to reporters. ADVERTISEMENT



A lawyer for the three, L.M. Samosir, said his clients had committed no wrongdoing, adding the case should be dismissed.

"They were just doing their job. The disbursement to CGN was a civil action so what the defendants did cannot be classified as criminal," said Samosir.

The prosecution said Cipta Graha Nusantara had proposed to use the loan for a hotel in the Sumatran city of Medan but the venture was never pursued after disbursement.

Prosecutors launched an investigation into $105 million of Mandiri loans after a report by the State Audit Agency in March highlighted more than $210 million in what it said were problematic loans to a variety of local firms.

Investors are closely watching the investigation, one of the biggest into the country's financial sector in years, to see if Yudhoyono's government meets its pledges to tackle graft, seen as a major obstacle to doing business.

The attorney general's office has named the three as suspects under Indonesia's anti-corruption law, in accordance with legal articles that carry a maximum penalty of life in jail.

[Alvin]

Would You Rather Own Google or Indonesia?: William Pesek Jr.

Oct. 11 (Bloomberg) -- Faced with poverty, surging oil prices and terrorist threats, many of Indonesia's 235 million people probably never noticed the milestone. Ditto for global investors, who care more about such things.

In April, Google Inc. surpassed Indonesia's entire stock market in value.

Think about it. A seven-year-old company that produces no physical products is now more valuable than the equity of Southeast Asia's biggest economy. Indonesia is an archipelago of some 18,000 islands holding natural resources --including oil -- that make the world's richest nations salivate. Google is, well, an Internet search tool.


It raises an intriguing question, and one Mark Matthews, a Singapore-based director at Merrill Lynch & Co., posed this week in a sales note to clients: Which would you rather own: 100 percent of the Indonesian equities market or Google?

A bit existential perhaps, but a question that focuses the mind and gets at a bigger point. Matthews' take on it? Indonesia is the clear winner.

``Indonesia is a hairy asset to be sure,'' he wrote. ``It has African levels of corruption, thousands of islands spread out over three time zones, Islamic extremists. But judging by the market's ability to withstand the most recent mini-crisis and Bali bombs, this is in the price. So there is upside if they can eventually get it right. And it is something real.''

Today's Cotton Gin?

Matthews can't help but wonder if Google will go the way of inventor Eli Whitney. ``The cotton gin changed America,'' Matthews wrote. ``It revitalized the South and boosted the British textile industry, and had a thousand other effects. And this earned the inventor, Eli Whitney, almost nothing.''

What's all this got to do with Google? ``That's sort of where Google is today,'' Matthews wrote. ``Google has a small lead over a pack of competitors, all eager to fight for one of the few remaining high-margin zones left in tech-land. Does Google management know that the supply of advertising space on the Internet is unlimited?

Google's market cap is $92 billion and last year it had $3.2 billion in sales. Indonesia's stock market is valued at $72 billion and its gross domestic product is $258 billion. PT Telekomunikasi Indonesia, the nation's biggest telephone operator, alone had sales of 33.9 trillion rupiah ($3.3 billion) in 2004. In other words, one company that's just 14 percent of the Jakarta Composite Index had more sales than Google.

Indonesia's Pros and Cons

Matthews' basic conclusion is this: Folks who buy Indonesia at current prices may do better than those who buy Google.

In 1998, for example, Microsoft Corp.'s market cap was bigger than South Korea's. Now Microsoft's is $272 billion and Korea's is $530 billion. ``If I could take a 7-year view on them, I would long Indonesia and short Google,'' Matthews says.

Aficionados of the information age may fear Matthews is spending too much time in the tropical sun. The stock of the most- used Web search engine rose 62 percent this year alone. Clearly, people are making some serious money off Google. And how many companies have seen their name become a verb?

Google comparisons aside, Matthews raises some interesting points about the state of the world's fourth most-populous nation.

The aftermath of the deadly Oct. 1 bombings in Bali hasn't been what their perpetrators might have expected. If the hope of the suicide bombers who killed themselves and 19 other people was to shake confidence in Indonesia's economy, they failed miserably.

Bonds Tell the Story

That Indonesia's stocks are still up nearly 10 percent this year is one sign. A more important one is that Indonesia drew excess demand last week for its biggest overseas debt sale, and that it plans to sell more 30-year bonds in 2006.

If investors viewed Indonesia as a basket case -- which many did following the 2002 Bali bombings and the 2003 attack on the JW Marriott Hotel in Jakarta -- would they really have placed $4.25 billion of orders for the $1.5 billion of 10- and 30-year debt it sold? That demand prompted the government to increase the sale by 20 percent.

While the yields Jakarta is paying are higher than those offered in April, they were at the bottom of the range marketed to fund managers. The demand reflects confidence President Susilo Bambang Yudhoyono is making progress toward reducing Indonesia's budget deficit, protecting currency reserves and attacking corruption.

Subsidy Gamble

Risks indeed abound in Indonesia, an economy whose only real consistency is its ability to confound investors. The place has crushing poverty, terrorist threats and chronic inefficiencies. And those are just the concerns investors focus. Any Asia-wide outbreak of bird flu, for example, could hit Indonesia hard.

Yudhoyono says he's tackling the problems that cost Indonesia the foreign direct investment it needs. Earlier this month, he almost tripled kerosene prices and more than doubled diesel tariffs to cap fuel subsidies and reduce the budget deficit.

While a tricky maneuver for any leader, that's a particularly perilous one in Indonesia. In 1998, the removal of subsidies fueled violent protests that toppled President Suharto. Yet Standard & Poor's on Oct. 3 said Yudhoyono's move was ``encouraging'' and will spur investor confidence.

It's a reminder that in any Google versus Indonesia debate, Asia's No. 7 economy may not be as bad a bet as you think.



To contact the writer of this column:
William Pesek Jr. in Tokyo at wpesek@bloomberg.net and
.

Last Updated: October 10, 2005 21:41 EDT

[Zorobabel]

Humorous and very interesting article. This Mr. Matthews sounds like a very cool guy.

[sanhen]

Oh thats one amusing articles. But very sad too. Thats illustrate how powerful USA economy is.

[Zorobabel]

It's true. I always find it weird that if the US economy grows at a rate of 3-4%, it adds almost twice as much in value to its GDP (11.6 trillion GDP growing at 4% adds $470 billion annually) than Indonesia's entire GDP.

[Anton]

Thats illustrate how powerful USA economy is.

Yes, very clever comparison. But it says more about Google's international success than it does about the US economy. (although yes - of course, a the biggest chunk of Google's busines is American, i presume)

[tata]

SUARA PEMBARUAN DAILY
--------------------------------------------------------------------------------

Menunggang Isu Flu Burung

AS Berusaha Ekspor Paha Ayam
JAKARTA - Di tengah menghangatnya isu flu burung yang meresahkan masyarakat, otoritas perdagangan Amerika Serikat (AS) dikabarkan mencoba memaksakan paha ayamnya memasuki pasar Indonesia.

Demikian diungkapkan Ketua Gabungan Perusahaan Perunggasan Indonesia (Gappi), Anton Supit, yang juga merupakan Ketua Umum Federation of ASEAN Poultry Producers (FAPP) di Jakarta, Selasa (11/10). Anton menuturkan, AS melalui Departemen Pertaniannya (USDA), menginginkan agar akses pasar untuk produk paha ayam (chicken leg quarter/CLQ) dibuka.

Mereka menjanjikan, bila akses tersebut dibuka, Amerika akan membuat studi tentang kondisi perunggasan di Indonesia. Studi itu sendiri akan membuat perkiraan kebutuhan di masa depan, kemampuan produsen untuk memenuhi pasokan, dan peluang pasar ekspor.

"Tetapi karena ada kesan pamrih hingga memungkinkan pelemparan produk inferior (bermutu rendah), Gappi akan melakukan studi prospek industri perunggasan itu sendiri, dan membiayainya sendiri,'' kata Anton.

Dia lantas menunjuk pengalaman Rusia dan Filipina sebagai bukti. Kedua negara itu merasakan betapa masuknya produk inferior telah merusak industri unggas kedua negara, sehingga mereka bergantung pada produk unggas impor.

Dengan kenyataan bahwa peternakan dalam negeri saat ini menghidupi setidaknya 2,5 juta penduduk Indonesia, Anton meyakini, apabila paha ayam impor masuk, akan menimbulkan dampak yang besar bagi perekonomian bangsa.

Senada dengan Anton, Guru Besar Institut Pertanian Bogor (IPB), Bungaran Saragih, juga mengingatkan bahwa peternakan dalam negeri akan hancur. (PR/N-6)

[Ara]

My frustration spill:

I got a customer who wanted to buy polyester yarn. Now, these guys were prepared to spend million of dollars. So, I contacted most major polyester manufacturer in Indonesia last week. So far, nobody, I mean, nobody have contacted me back. WTF? don't these companies want to make money? The way it's going, I'm going to have to go to China and get my yarn from those guys.

[David-80]

Ara, i can help you with that, can you tell me which companies did you contact? I can find some polyester companies in east and central java, but i need a few days before i can get them for you. Anyway, Are we talking about business ? if so i can speed up for you. LOL. (I need money dude!) PM me though if you want too.

cheers

[Ara]

Cool Dave.

[tata]

kita dapet uang denger gak nih??? :D

[David-80]

kita dapet uang denger gak nih???

Kalo deal, ntar kita gathering, gua yang bayar deh (makan nya doang!) =P

cheers

[Ara]

Ketemu di Citos?

[David-80]

Ketemu di Citos?

Mendingan di Plaza semanggi dulu..sekalian survey pacific place. Sorry guys this been off topic..lets back to the original thread :)

cheers

[Alvin]

Friday October 14, 4:37 PM
Indonesia budget group plans 2006 fuel subsidy cut

JAKARTA, Oct 14 (Reuters) - Indonesia's fuel subsidy bill will fall almost 40 percent to 54.3 trillion rupiah ($5.36 billion) in 2006 under a target agreed by a working party on the budget, the head of the parliamentary group said on Friday.
Amin Said Husni said the 2006 subsidy target, which compares with this year's target of 89.2 trillion won, indicated there would be no need to further hike domestic fuel prices.

The government raised fuel prices by an average of more than 100 percent in October to help cut budget subsidies.

Various officials in the administration of President Susilo Bambang Yudhoyono have suggested there may be more increases so as to gradually bring Indonesia's domestic prices in line with global market levels and reduce subsidies.

"There is no such need," Husni said when asked whether the 2006 subsidy figure meant the government would have to further increase domestic fuel prices next year.

Husni told reporters there would be further parliamentary hearings to discuss the fuel subsidy target, but added that normally what has been approved by the working group would also be approved at later hearings. ADVERTISEMENT



The parliamentary group last month approved key assumptions for the draft 2006 budget, including an average oil price at $57 per barrel and oil production at 1.11 million barrels per day.

Concerns over meeting higher oil import and subsidy costs, due to soaring global oil prices, helped force the rupiah to a four-year low of 11,750 per dollar on Aug. 30.

The rupiah has since strengthened, and was around 10,125 at 0700 GMT on Friday, due in part to the October fuel price hike and a series of interest rate increases by the central bank.

Indonesian officials had estimated fuel subsidies might reach more than 100 trillion rupiah, or one fifth of budget spending this year, if domestic fuel prices had not been not hiked.

[Alvin]

U.S. business circle asks KPK to help create conducive investment climate in Indonesia

NEW YORK (Antara): The U.S. business circle has pinned their hopes on the Corruption Eradication Commission (KPK) for the creation of conducive investment climate in Indonesia.

The hope was disclosed at a meeting between U.S.businesspeople with KPK deputy chairmen Erry Riyana Hardjapamekas and Amien Sunaryadi as well as Yunus Husein, chairman of the Financial Transactions Reports Analysis Center of Indonesia here on Friday.

"Corruption has become an important issue, not only for Indonesia, but also the investors who have business links with the country," said Wayne J. Forrest, director the American-Indonesian Chamber of Commerce (AICC), the sponsor of the meeting together with the Financial Services Volunteer Corps (FSVC).

Forrest said that real action by the Indonesian government to fight rampant corruption was badly sought by the business circle in the U.S., with or without KPK.

"The latest development in Indonesia is interesting to follow," he said, referring to KPK's investigation on the Supreme Court.

During the meeting the businessmen questioned the extent of authority and targets on the part of KPK in its drive to wipe out corruption in a number of sectors.

Erry Riyana said that the U.S. businessmen's expectations focused on the creation of business regulation certainty, consistency in laws having links with their businesses and assurance for service payments.

"For them it's a bit weird why license processing that could be simple has to be made very complicated, which ends up with money being paid (bribes)," Erry said. (**)

[Alvin]

Indonesia`s electronic market to grow by 103 pct in 2010


JAKARTA, 10/15 - Indonesia`s market of electronic products will grow 103 percent to reach 22.5 trillion rupiah (some 2.25 billion US dollars) in five years, local media Bisnis Indonesia reported Friday.

According to data from the Indonesia`s Electronic Marketer Club and Indonesian electronic Businessmen Union, in 2010, the country` s television market will share the biggest portion with 9.3 million unit, valued at 11.2 trillion rupiah (some 1.12 billion US dollars), followed by air conditioner 2.1 million units with value of 4.9 trillion rupiah (some 490 million US dollars), refrigerator with 2.8 million units with value of 3.8 trillion rupiah (about 380 million US dollars), and washing machine 2.2 million units with value of 2.6 trillion rupiah (some 260 million US dollars).

The report said that last year, the biggest sales were dominated by television with value of 5.4 trillion rupiah (some 540 million US dollars), followed by refrigerator with value of 2. 6 trillion rupiah (some 260 million US dollars), air conditioner with value of 2.1 trillion rupiah (some 210 million US dollars) and washing machine with value of 981 million rupiah (about 98,100 US dollars).

[bahar]

Indonesia's rubber glove output expected to rise due to increased demand amid bird flu

JAKARTA (AP): Indonesia expects to produce more rubber gloves this year as health workers in Asia and elsewhere take greater precautions to protect themselves against bird flu, an industry official said Tuesday.

Output in Indonesia, which is among the world's biggest latex glove manufacturers, is expected to rise 12.5 percent to 9 billion pieces this year, said A. Safiun, chairman of the Indonesian Rubber Glove Manufacturers Association.

"Global demand is already growing due to rising hygiene consciousness," Safiun told DowJones Newswires. "That will grow further as the avian flu will spur wider use of rubber gloves in Asia."

More than 60 people have died of bird flu in Southeast Asia, including three in Indonesia, since the disease began ravaging poultry stocks in region two years ago. The outbreak now threatens to spread to other parts of the world such as Europe.

Indonesia, Malaysia and Thailand are world's major latex glove manufacturers, accounting for about 85 percent of global rubber glove sales in 2004.

Most of the gloves are used in the U.S. and Europe, but Safiun said the bird flu outbreak is expected to help foster the use of disposable rubber gloves in Asia.

"Once people use rubber glove, they will continue using it," he said.

Indonesia's rubber glove exports rose 26 percent to 46,567 metric tons in 2004. In January-to-May this year, Indonesia exported 25,891 tons of rubber gloves. (**)

[Alvin]

Indonesia's President Weathers Tough Year
By CHRIS BRUMMITT, Associated Press Writer
2 hours, 42 minutes ago



JAKARTA, Indonesia - Indonesia's president had a tough first year: The Asian tsunami killed more than 131,000 people. Polio and bird flu outbreaks strained the country's health system. Soaring oil costs threatened a budding economic recovery.

While Susilo Bambang Yudhoyono's popularity helped see him through the crises — including this month's suicide bombings on Bali — analysts have given him mixed reviews since his landslide victory in the country's first-ever direct vote for head of state.

"I think he has done quite well," said Greg Fealy, an Indonesia specialist at Australia's National University. "A lot of times he could have done better. He has been hesitant."

The retired 56-year-old general, who took office a year ago Thursday, won plaudits for his handling of the Dec. 26 tsunami that devastated Aceh, a province on the Indonesian island of Sumatra that was the spot hardest hit by the massive earthquake and giant waves. That was followed by a landmark peace agreement in the same province, which for decades had been torn apart by separatist violence.

His decision this month to more than double gas prices to relieve budgetary pressures due to the high price of crude internationally was also praised by economists, and protests against the move quickly fizzled.

Still, many observers were disappointed with Yudhoyono's perceived indecisiveness in making quick policy decisions and failure to push for more radical change in the world's most populous Muslim nation, especially given his large mandate.

Hopes were high when Yudhoyono took office on Oct. 20, 2004. It had been a chaotic transition to democracy following the end of the Suharto dictatorship in 1998. Indonesians were eager to see him make good on campaign promises to fix the economy, battle endemic graft and tackle Islamic militants blamed for a series of deadly attacks since 2000.

"It was a tough year," starting with the tsunami and ending with a deadly terrorist strike, said presidential spokesman Dino Djalal. "He had to be reactive and to improvise to respond."

"That distracted us from what we wanted to achieve," he said. But it also highlighted Yudhoyono's abilities as a leader, especially as a crisis manager, the spokesman added.

A little more than two months after being sworn in, a massive earthquake off the country's western coast sent 33-foot high waves crashing into Aceh, killing at least 131,000 people and leaving half a million homeless.

Yudhoyono flew directly to the province and immediately invited foreign troops to help out in the region, which had been closed to outsiders because of civil war. It was a bold decision that has since been credited with saving many lives.

Djalal initially told one reporter after the tsunami that he doubted the president would tolerate an outside military presence. But he recalled that Yudhoyono later said the situation had changed: "'It's a humanitarian situation, we have to accept help,'" he quoted the president as saying.

Several bankers, lawmakers and ex-Cabinet ministers are either being investigated, on trial or have been convicted for corruption. But analysts say it is too soon to judge his anti-graft credentials.

Unlike his predecessor Megawati Sukarnoputri, Yudhoyono has often been seen mixing with the country's millions of poor and regularly addresses the media, which in general still support him.

"He has kept his popularity amid all the troubles," said Jakarta-based political analyst Indria Samego. "That is his major success this year."

[Alvin]

INDONESIA TO BE PART OF PILOT PROJECT TO ERADICATE CORRUPTION

Wednesday October 19, 2005, 4:01 pm

JAKARTA, Oct 19 Asia Pulse - The Financial Action Task Force (FATF) Asia Pacific Group on Money Laundering has declared Indonesia along with two other countries as pilot projects of corruption eradication, an official said.

"We and other two countries are declared as pilot projects for corruption eradication using a money laundering approach," Yunus Husein, head of the Centre for Report and Financial Transaction Analysis (PPATK), said here on Tuesday.

He further said the FATF Asia Pacific Group on Money Laundering in a joint session had made the decision in Paris last weekend.

In February, Indonesia was excluded from the list of countries which are not cooperative in eradicating money laundering.

Some members of PPATK and the Corruption Eradication Commission (KPK) recently visited some cities in the US.

The visit was aimed at gaining US assistance to eradicate corruption and money laundering the US government has offered.

"We have given a briefing on how we have dealt with corruption and money laundering to convince investors to enter Indonesia," Yunus added.

(ANTARA)

[David-80]

Interesting! from 30 Billion to 32 billion in less than two weeks...

Indonesia international reserves rise to $32.19 bln

JAKARTA, Oct 19 (Reuters) - Indonesia's international reserves rose to $32.19 billion in the second week of October, from $30.44 billion a week earlier, central bank data showed on Wednesday.
Bank Indonesia also said on its Website (www.bi.go.id) that base money rose to 227.20 trillion rupiah ($22.42 billion) compared with 226.87 trillion rupiah the previous week.


cheers

[David-80]

A major history for Indonesia's gasoline business...

Shell to open Indonesia fuel station in retail lead

JAKARTA, Oct 19 (Reuters) - Shell will open its first petrol pump station in Indonesia next month, leading the way for the private sector and foreign firms to gain a foothold in the retail market, the company said on Wednesday.
Jakarta gave Shell, BP Plc , Malaysia's Petronas [PETR.UL] and five Indonesian firms temporary licences last year, paving the way for them to directly import fuel and sell to local customers, after revoking state oil firm Pertamina's monopoly.

"We are currently finalising construction of the pump station in West Java. We plan to open it next month," Wally Saleh, Shell Indonesia's spokesman said, adding that the company plans to boost its retail investments and will build more pump stations.

The first station will sell high-octane gasoline at market prices, he told Reuters.

Oil companies are eager for a stake in the retail market in Indonesia, the world's fourth-most populous nation, but will have to compete against Pertamina's subsidised prices for the most popular low-grade fuels.

Shell is also negotiating with Jakarta to sell low-grade fuels at the subsidised rates, Salleh said, adding the company wants the government to set very clear rules for the sale of state-controlled fuels.


Indonesia nearly doubled gasoline prices, increased diesel by 105 percent, and almost trebled kerosene prices this month in an effort to curb the debilitating effect of subsidies on its budget and rupiah currency.

Despite the increases, fuel rates in Indonesia are still among the lowest in Asia.

Pertamina said Indonesia would consume 64.8 million kilolitres (407.5 million barrels) of oil products in 2005, including 59.3 million kl (373 million barrels) under subsidies.

Oil products consumption in 2006 is seen at 65.6 million kl (413 million barrels), including 41.5 million kl (261 million barrels) under subsidy. (1 kl=6.289 barrel)

[wS]

Oil guru says crude could hit $190 this winter
‘Prices are really cheap today and they need to go a lot higher,’ analyst says

Reuters
Updated: 3:41 p.m. ET Oct. 19, 2005
OTTAWA - Consumers should brace for crude oil and natural gas prices possibly doubling or tripling this winter, Matthew Simmons, a best-selling author and oil-supply bear, said on Wednesday.

"Prices are really cheap today and they need to go a lot higher, and they probably will go a lot higher," Simmons said in Ottawa.

"I am very concerned, given the destructive damage done by (Hurricanes) Katrina and Rita, that the United States must be closer to starting to see significant product shortages than we've seen since 1979."

Too much got destroyed and too little has been brought back on stream, the Houston-based analyst said.

He also said that cold weather this winter could bring a very high risk of natural gas curtailment in the United States.

"Either one of those events (oil product shortage or natural gas shortage) could send prices two to three times higher than they are today," he said after a speech in Ottawa.

That could translate into natural gas prices of $40 per million British thermal units from more than $13 now, he said. Doubling or tripling crude would put it in the range of $125 to $190 per barrel.

"Everyone keeps thinking there is a (price) ceiling...There is no ceiling," said Simmons, who wrote in his book "Twilight in the Desert" that Saudi oil output is at or near its peak.

He said he has seen little sign that higher prices so far have done much to reduce consumption.

Simmons said supplies of heating fuel oil were in okay shape, but could drain fast if the weather turned cold. Diesel is tight and shortages of jet fuel had caused some planes to be diverted from some airports.

"It's going to be painful for people to get used to actually paying real money for a really valuable resource," he said.
------------------------------------------------------------------------

Wow triple oil price??? Painful condition for SBY.

[tata]

http://www.thejakartapost.com/detaillatestnews.asp?fileid=20051019185956&irec=1

Govt to form a team to verify TNI businesses

JAKARTA (Antara): The government will soon establish a team to verify businesses run by the Indonesian Military (TNI), secretary general of the Ministry of Defense Sjafrie Sjamsoeddin said on Wednesday.

The TNI headquarters and the Ministry of Defense have made inventories on the all the businesses run by the TNI and are in the process of handing them over to the office of the minister of state enterprises, Sjafrie said.

Sjafrie made the remarks after attending a specialcoordination meeting on the military business transfer, attended by Minister of Defense Juwono Sudarsono, Minister of Justice and Human Rights Hamid Awaluddin, Minister of Finance Yusuf Anwar andsecretary to the office of the state minister of stateenterprises Muhammad Said Didu.

There are 219 business units managed by TNI, Sjafrie said, adding that the verification and analysis on the business units would be coordinated by the state minister of state Enterprises.

Meanwhile, Said Didu said that the first step in theverification process would be to separate which business units were run using state facilities and which were not.

Only the ones using state facilities will be handed over to the state, he said, urging people not to generalize by considering that all the TNI businesses were managed out of the state facilities. (**)

[Zorobabel]

The guys sounds like a sensational author trying to sell books. However, I do believe $100-125 is not out of the question given some recent analyses by major investor groups. Sooner or lately, most likely later, the Indonesian government is going to have come up with clear-cut, long term policies to deal with the oil problem. For the last half century the Indonesian domestic economy has been built around a framework of cheap fuel. Newly industrialized nations such as South Korea, Taiwan, Japan, the rebuilt Western Europe, and even the US have taken other measures. So, while the fuel price has doubled in these developed economies over the last two years inflation has not even hit 1%, whereas in Indonesia a little more than doubling in the fuel price will push up inflation about 3-4% higher than previous estimates by the end of the year.

Indonesia needs to look for alternatives in developing a framework. Japan is probably the best example. The public transit systems were developed there while the poor represented the majority of the population. Even today in Japan roughly 45% of all travel is done by rail, bus, or other public transportation. In the major urban areas, it is closer to 60%. The most major factor of the government's proposed infrastructure push should not be roads but other forms of transportation. More rail, urban transport systems (not just for Jakarta), rural bus and van routes, etc.

Otherwise, the Indonesian economy is continually going to be held hostage by fuel prices. The decisions made now and in the next few years are going to have a major impact on the future of the nation's transportation systems for the next 50 years.

[Anton]

The guys sounds like a sensational author trying to sell books. However, I do believe $100-125 is not out of the question given some recent analyses by major investor groups. Sooner or lately, most likely later, the Indonesian government is going to have come up with clear-cut, long term policies to deal with the oil problem. For the last half century the Indonesian domestic economy has been built around a framework of cheap fuel. Newly industrialized nations such as South Korea, Taiwan, Japan, the rebuilt Western Europe, and even the US have taken other measures. So, while the fuel price has doubled in these developed economies over the last two years inflation has not even hit 1%, whereas in Indonesia a little more than doubling in the fuel price will push up inflation about 3-4% higher than previous estimates by the end of the year.

Indonesia needs to look for alternatives in developing a framework. Japan is probably the best example. The public transit systems were developed there while the poor represented the majority of the population. Even today in Japan roughly 45% of all travel is done by rail, bus, or other public transportation. In the major urban areas, it is closer to 60%. The most major factor of the government's proposed infrastructure push should not be roads but other forms of transportation. More rail, urban transport systems (not just for Jakarta), rural bus and van routes, etc.

Otherwise, the Indonesian economy is continually going to be held hostage by fuel prices. The decisions made now and in the next few years are going to have a major impact on the future of the nation's transportation systems for the next 50 years.

Good Post. Well said. But do the right people have the balls to carry it out?

[Alvin]

The guys sounds like a sensational author trying to sell books. However, I do believe $100-125 is not out of the question given some recent analyses by major investor groups. Sooner or lately, most likely later, the Indonesian government is going to have come up with clear-cut, long term policies to deal with the oil problem. For the last half century the Indonesian domestic economy has been built around a framework of cheap fuel. Newly industrialized nations such as South Korea, Taiwan, Japan, the rebuilt Western Europe, and even the US have taken other measures. So, while the fuel price has doubled in these developed economies over the last two years inflation has not even hit 1%, whereas in Indonesia a little more than doubling in the fuel price will push up inflation about 3-4% higher than previous estimates by the end of the year.

Indonesia needs to look for alternatives in developing a framework. Japan is probably the best example. The public transit systems were developed there while the poor represented the majority of the population. Even today in Japan roughly 45% of all travel is done by rail, bus, or other public transportation. In the major urban areas, it is closer to 60%. The most major factor of the government's proposed infrastructure push should not be roads but other forms of transportation. More rail, urban transport systems (not just for Jakarta), rural bus and van routes, etc.

Otherwise, the Indonesian economy is continually going to be held hostage by fuel prices. The decisions made now and in the next few years are going to have a major impact on the future of the nation's transportation systems for the next 50 years.

good post... problem is , our government lacks vision.

[Sielo]

Growing No. Of Poor In Indonesia Puts Pressure On Budget: Report

JAKARTA, Oct 20 Asia Pulse - The number of poor families in Indonesia rose to 16.5 million, exceeding the target of 15.5 million entitled to a cash subsidy, the Kompas daily reported Thursday.

The increase has caused a problem for the government, which must raise additional funds to pay families their cash subsidy entitlement.

The government provides a subsidy of Rp100,000 (US$10) a month per family in the poor category to compensate for the fuel price hikes made on Oct 1.

Head of the National Development Planning Board Sri Mulyani Indrawati told the daily that payments for the additional number of poor families could not be made until next year because the subsidy fund could only cater for 215.5 million families.

The additional 1 million families means an additional budget of Rp300 billion, Sri said.

Chief Economics Minister Aburizal Bakrie said the subsidy for poor people is not permanent, adding, the subsidy system will change when the country's economic situation improves.

[Alvin]

Indonesia prepares reforms to woo foreign investors
By Shawn Donnan in Jakarta
Published: October 20 2005 03:26 | Last updated: October 20 2005 03:26

Indonesia's government is working on a deregulation package intended to boost foreign direct investment in south-east Asia's largest economy, officials said yesterday.


The package is designed to address concerns that President Susilo Bambang Yudhoyono who celebrates his first anniversary in office today has failed to deliver improvements promised for Indonesia's ailing investment climate.

“We have tried to address the macroeconomic issues. Now we have to focus on getting investment really going,” Mari Pangestu, Indonesia's trade minister, said in an interview with the Financial Times.

“We've already begun that process. But the major response [from investors] so far has been ‘stop saying and start doing'.”

Mrs Pangestu, other officials, and government advisers said ministers had been asked to identify unnecessary regulations and find other ways to simplify bureaucracy. The government aims to release a policy package early next year.

The initial focus, they said, would be on areas such as customs, licensing, and tax. The aim would be both to demonstrate tangible progress to investors while reducing the influence of a powerful Suharto-era civil service, which has proved a barrier to reforms.

FDI has shown real signs of recovery this year for the first time since the 1997-98 Asian financial crisis, with approvals topping $10bn (€8.3bn, £5.7bn) during the first nine months. That figure, however, remains well below the levels exceeding $30bn that Indonesia attracted before the crisis.

As an example of what is planned in the new deregulation measures, officials cited a recent compensation package for business that accompanied the rise in government-set fuel prices on October 1.

That package included reduced tariffs on imported sugar for the food and beverage industry and a halving of the number of weigh stations on Indonesian highways to reduce the informal tolls on trucking companies.

Now “we have to enlarge its scope and deepen its magnitude”, said Rizal Mallarangeng, a spokesman for Aburizal Bakrie, the chief economic minister.

However, questions remain about Jakarta's capacity to deliver such a policy package.

A draft tax law originally intended to be more business-friendly has resulted in a revolt by the country's main business group after it was apparently hijacked by the head of the tax office, one of Indonesia's most powerful bureaucrats. People close to the government also say they are watching the dispute as a sign of how much control Mr Yudhoyono can exert over bureaucrats.

“If [the draft tax law] goes through without any changes then clearly that's not a good signal,” said one senior official.

There are some signs that Mr Yudhoyono's anti-graft efforts are yielding changes in the civil service. One study found that bribes and other informal taxes in Indonesia had fallen to 6 per cent of business costs from 10 per cent previously, said Chatib Basri, a University of Indonesia economist who advises the government.

Additional reporting by Taufan Hidayat

[Alvin]

Indonesia Ranked 6th Most Corrupt
Posted by: Roy Tupai on 10, 18 2005


Indonesia is the 6th most corrupt country in the world, according to the latest report on global corruption perceptions.

The Corruption Pereceptions Index 2005, compiled by Berlin-based Transparency International and released on Tuesday (18/10/05), covered 159 countries. Indonesia was placed at 138, along with Azerbaijan, Cameroon, Ethiopia, Iraq, Liberia and Uzbekistan.

Analysts say corruption has become worse in Indonesia since the downfall of former dictator Suharto in 1998 due to abysmal law enforcement, the proliferation of new political parties serving their own vested interests and the granting of greater powers to the nation’s rapacious regional administrations.

Indonesia’s much touted press freedom has failed to stem the level of graft, with courts often being accused of siding with allegedly corrupt politicians and tycoons.

The administrations of former presidents Megawati Sukarnoputri, Abdurrahman Wahid and B.J. Habibie were unwilling or unable to overcome endemic corruption.

There were high hopes the situation would improve after President Susilo Bambang Yudhoyono came to power a year ago on an election platform to eradicate corruption. Although his adminsitration has achieved some success, analysts say he must do more to remove crooked senior officials from the courts, the bureaucracy, police and other state institutions.

Corruption Perceptions Index
Transparency International, an independent organization that tracks corruption around the world, first published its annual Corruption Perceptions Index (CPI) in 1995.

On the CPI, a 10 indicates a perfectly clean country, whereas a 0 refers to a country where business transactions are entirely penetrated by corruption involving immense sums in kickbacks, extortion, fraud, etc.

The CPI is based on the perceptions of business people, the general public and country analysts.

This year Indonesia’s corruption perception score was 2.2, a very slight improvement over its performance in recent years. Indonesia has never done particularly well in the survey, always managing to appear near or at the bottom of the list. In 1995 it scored 1.94, the lowest score of 41 countries surveyed.

Transparency International said the new CPI shows that corruption still rampant in 70 countries.

More than two-thirds of the 159 nations surveyed scored less than 5 out of a clean score of 10, indicating serious levels of corruption in a majority of the countries.

Transparency International said the 2005 CPI bears witness to the double burden of poverty and corruption borne by the world’s least developed countries.

“Corruption is a major cause of poverty as well as a barrier to overcoming it,” said Transparency International chairman Peter Eigen. “The two scourges feed off each other, locking their populations in a cycle of misery. Corruption must be vigorously addressed if aid is to make a real difference in freeing people from poverty.”

The organization said that despite progress on many fronts, including the imminent entry into force of the United Nations Convention against Corruption, 70 countries - nearly half of those included in the CPI - scored less than 3, indicating a severe corruption problem.

Among the countries included on the new CPI, corruption is perceived as most rampant in Chad, Bangladesh, Turkmenistan, Myanmar and Haiti – also among the poorest countries in the world.

Transparency International said corruption is hampering the achievement of the Millennium Development Goals - including the halving of extreme poverty by 2015 - by undermining economic growth and sustainable development that would free millions from the poverty trap.

"Fighting corruption must be central to plans to increase resources to achieve the goals, whether via donor aid or in-country domestic action. Moreover, extensive research shows that foreign investment is lower in countries perceived to be corrupt, which further thwarts their chance to prosper," said the organization.

It said that when countries improve governance and reduce corruption, they reap a “development dividend” that, according to the World Bank Institute, can include improved child mortality rates, higher per capita income and greater literacy.

“Corruption isn’t a natural disaster: it is the cold, calculated theft of opportunity from the men, women and children who are least able to protect themselves,” said Transparency International chief executive David Nussbaum

"Leaders must go beyond lip service and make good on their promises to provide the commitment and resources to improve governance, transparency and accountability.”

There is hope that the UN Convention against Corruption, which will enter into force in December 2005, will lead to a reduction in graft. The Convention will aim to accelerate the retrieval of stolen funds, push banking centres to take action against money laundering, allow nations to pursue foreign companies and individuals that have committed corrupt acts on their soil, and prohibit bribery of foreign public officials. Transparency International said low-income countries that embrace and implement the Convention will "have a head start in the race for foreign investment and economic growth".

Transparency International recommended that lower-income countries increase resources and political will for anti-corruption efforts; and enable greater public access to information about budgets, revenue and expenditure.

It said higher-income countries should combine increased aid with support for recipient-led reforms; and reduce tied aid, which limits local opportunities and ownership of aid programmes.

All countries were urged to promote strong coordination among governments, the private sector and civil society to increase efficiency and sustainability in anti-corruption and good governance efforts; and ratify, implement and monitor existing anti-corruption conventions.

2005 CPI
1 - Iceland 9.7
2 - Finland 9.6
New Zealand 9.6
4 - Denmark 9.5
5 - Singapore 9.4
6 - Sweden 9.2
7 - Switzerland 9.1
8 - Norway 8.9
9 - Australia 8.8
10 - Austria 8.7
11 - Netherlands 8.6
United Kingdom 8.6
13 - Luxembourg 8.5
14 - Canada 8.4
15 - Hong Kong 8.3
16 - Germany 8.2
17 - USA 7.6
18 - France 7.5
19 - Belgium 7.4
Ireland 7.4
21 - Chile 7.3
Japan 7.3
23 - Spain 7
24 - Barbados 6.9
25 - Malta 6.6
26 - Portugal 6.5
27 - Estonia 6.4
28 - Israel 6.3
Oman 6.3
30 - United Arab Emirates 6.2
31 - Slovenia 6.1
32 - Botswana 5.9
Qatar 5.9
Taiwan 5.9
Uruguay 5.9
36 - Bahrain 5.8
37 - Cyprus 5.7
Jordan 5.7
39 - Malaysia 5.1
40 - Hungary 5
Italy 5
South Korea 5
43 - Tunisia 4.9
44 - Lithuania 4.8
45 - Kuwait 4.7
46 - South Africa 4.5
47 - Czech Republic 4.3
Greece 4.3
Namibia 4.3
Slovakia 4.3
51 - Costa Rica 4.2
El Salvador 4.2
Latvia 4.2
Mauritius 4.2
55 - Bulgaria 4
Colombia 4
Fiji 4
Seychelles 4
59 - Cuba 3.8
Thailand 3.8
Trinidad and Tobago 3.8
62 - Belize 3.7
Brazil 3.7
64 - Jamaica 3.6
65 - Ghana 3.5
Mexico 3.5
Panama 3.5
Peru 3.5
Turkey 3.5
70 - Burkina Faso 3.4
Croatia 3.4
Egypt 3.4
Lesotho 3.4
Poland 3.4
Saudi Arabia 3.4
Syria 3.4
77 - Laos 3.3
82 - China 3.2
Marocco 3.2
Senegal 3.2
Sri Lanka 3.2
Suriname 3.2
83 - Lebanon 3.1
Rwanda 3.1
85 - Dominican Republic 3
Mongolia 3
Romania 3
88 - Armenia 2.9
Benin 2.9
Bosnia and Herzegovina 2.9
Gabon 2.9
India 2.9
Iran 2.9
Mali 2.9
Moldova 2.9
Tanzania 2.9
97 - Algeria 2.8
Argentina 2.8
Madagascar 2.8
Malawi 2.8
Mozambique 2.8
Serbia and Montenegro 2.8
103 - Gambia 2.7
Macedonia 2.7
Swaziland 2.7
Yemen 2.7
107 - Belarus 2.6
Eritrea 2.6
Honduras 2.6
Kazakhstan 2.6
Nicaragua 2.6
Palestine 2.6
Ukraine 2.6
Vietnam 2.6
Zambia 2.6
Zimbabwe 2.6
117 - Afghanistan 2.5
Bolivia 2.5
Ecuador 2.5
Guatemala 2.5
Guyana 2.5
Libya 2.5
Nepal 2.5
Philippines 2.5
Uganda 2.5
126 - Albania 2.4
Niger 2.4
Russia 2.4
Sierra Leone 2.4
130 - Burundi 2.3
Cambodia 2.3
Congo, Republic of 2.3
Georgia 2.3
Kyrgyzstan 2.3
Papua New Guinea 2.3
Venezuela 2.3
137 - Azerbaijan 2.2
Cameroon 2.2
Ethiopia 2.2
Indonesia 2.2
Iraq 2.2
Liberia 2.2
Uzbekistan 2.2
144 - Congo, Democratic Republic 2.1
Kenya 2.1
Pakistan 2.1
Paraguay 2.1
Somalia 2.1
Sudan 2.1
Tajikistan 2.1
151 - Angola 2
152 - Cote d'Ivoire 1.9
Equatorial Guinea 1.9
Nigeria 1.9
155 - Haiti 1.8
Myanmar 1.8
Turkmenistan 1.8
158 - Bangladesh 1.7
Chad 1.7

[bahar]

In summary, the government and all other stakeholders agreed to reduce terminal handling charges and container handling charges so that both combined will be less than $95. This make the charges more or less on par with Singapore's and Malaysia's.

It's part of an effort to reduce high cost economy and a form of compensation for the industry following massive fuel hike recently.
====================================================

Biaya Peti Kemas Turun US$ 55
Hendi Suhendratio - detikcom

Jakarta - Pemerintah akhirnya menurunkan biaya peti kemas sebesar US$ 55 atau dari US$ 150 menjadi US$ 95 per kontainer 20 kaki.

"Terminal handling charges (THC) dan container handling charges (CHC), kombinasi kedua itu tidak boleh lebih dari US$ 95. Dan itu sudah kita putuskan," kata Menteri Perhubungan Hatta Radjasa kepada wartawan di Gedung Depkeu, Jalan Lapangan Banteng, Jakarta, Jumat (21/10/2005).

Biaya peti kemas ada dua jenis, yakni THC dan CHC. Tarif yang ditetapkan
pemerintah untuk THC maksimum 50 persen dari CHC. Sedangkan untuk CHC yang
ditetapkan Pelindo saat ini adalah US$ 150.

Pemerintah akan segera memberlakukan keputusan tersebut. "Itu diberlakukan sekarang. Tapi kan surat keputusannya belum keluar. Mungkin Senin suratnya keluar," tambah Hatta.

Rencananya, pemerintah akan berdialog dengan operator pelabuhan untuk menentukan kombinasi THC dan CHC pada Senin (24/10/2005) pekan depan. Saat ini ada dua pilihan kombinasi, yakni US$ 75 untuk CHC dan US$ 25 untuk surcharge atau US$ 80 untuk CHC dan US$ 15 untuk surcharge.

Hatta mengaku, banyak pihak yang keberatan dengan pemangkasan biaya peti kemas ini karena akan kehilangan pendapatannya. "Memang ada yang keberatan. Tapi demi kepentingan nasional dan daya saing," tegas Hatta.

Ketua Asosiasi Pertekstilan Indonesia (API) Benny Sutrisno menambahkan, dengan penurunan biaya peti kemas ini, maka pengusaha tekstil dapat menghemat ongkos pelabuhan US$ 100 per bulan atau ekuivalen dengan gaji sebulan buruh.

Dengan perhitungan 6 juta kontainer per tahun atau 500 ribu kontainer per bulan, maka menurut Benny bisa menyelamatkan 250 ribu buruh.

Niat memangkas biaya peti kemas ini sebenarnya sudah diutarakan sebelum kenaikan BBM 1 Oktober lalu. Penurunan biaya ini merupakan bagian dari kompensasi bagi industri, khususnya pelabuhan, terkait kenaikan harga BBM 1 Oktober.

Dengan turunnya biaya penanganan peti kemas hingga US$ 50 per kontainer, diharapkan menguntungkan para eksportir hingga US$ 300 juta per tahun.

Penurunan biaya peti kemas ini juga menyebabkan level tarif peti kemas
Indonesia sama dengan negara-negara lain di Asia, seperti Singapura dan
Malaysia. (qom)

[Blue_Sky]

Faisal Basri: Pajak Bandwidth Kebijakan Dungu
Wicaksono Hidayat - detikInet

Faisal Basri (Kompas.com)
Jakarta, Pengamat ekonomi Faisal Basri beranggapan, adanya rencana pajak bandwidth dalam RUU Perpajakan yang baru sebagai sebuah kebijakan yang dungu.

Faisal membenarkan kabar adanya Rancangan Undang-Undang Perpajakan baru yang saat ini telah diajukan ke Dewan Perwakilan Rakyat. RUU tersebut, ujarnya, direncanakan bisa menjadi UU pada awal 2006.

Di kalangan komunitas teknologi informasi, RUU tersebut menimbulkan keresahan karena konon salah satu pasalnya mengusulkan pengenaan pajak pertambahan nilai (PPN) pada bandwidth yang berasal dari luar negeri. "Saya katakan, kok kampungan banget, dungu, sontoloyo? Kebijakan ini tidak memahami dunia maya," ujarnya kepada detikinet.

Kebijakan tersebut, lanjut Faisal, seakan-akan dibuat secara sembarangan, tanpa melibatkan komunitas yang terkait. Padahal, ujarnya, komunitas TI sudah sepantasnya dilibatkan.

Di sisi komunitas TI, pajak ini dikhawatirkan akan melambungkan tarif internet. Pada gilirannya hal itu dikhawatirkan akan membuat teknologi makin tak terjangkau.

Bukan hanya itu, Faisal melihat dari sisi peraturan, pajak bandwidth itu juga agak salah kaprah. "Intinya, bandwidth itu ada di luar negeri, atau kalau satelit itu kan ada di awang-awang dan dimiliki oleh Inggris atau Amerika.Masak memajaki orang luar negeri dengan PPN?" tuturnya.

Sedangkan bagi perusahaan dalam negeri yang menggunakan bandwidth dari luar negeri kemudian dikenakan pajak, Faisal melihat hal itu akan menyulitkan. "Kalau memang ada di dalam negeri dan perusahaan dalam negeri bisa dikreditkan. Kalau ini? Kan nggak bisa," ia menambahkan.
(wsh)

[sanhen]

Huh? Which country in this world that applies TAX to bandwidth??? This is one silly regulation.

[Blue_Sky]

^^
Maybe our government want to be recorded in Guniess Book of Record for the one and only country that have such a stupid regulation

:sleepy:

Compare to Singapore and Malaysia our internet technology is far behind and now with this?? I really cant imagine

[sanhen]

Yeah, our copper network is old. Although many are upgraded by Telkom, but the network have too many intereference in the cabling making it unsuitable for broadband. Plus our link to internet backbone is slowwwwww. And I heard there is this APJII or something that act as an internet cartel in Indonesia. Plus Departemen Kominfo is just too slow in action and lacks in vision.

[h4nh4n]

damn!



no wonder why Indonesia always behind from another countries in information system...

[Alvin]

Tuesday October 25, 11:34 AM
Indonesia cuts 2005 GDP growth forecast again
JAKARTA, Oct 25 (Reuters) - Indonesia's president said he hoped the economy would grow by 5.7 or 5.8 percent this year, a further downward revision of the GDP growth forecast, but economists said on Tuesday even that was optimistic.
Indonesia has been cutting its GDP forecasts because of the impact of high world oil prices, rising inflation and high interest rates on Southeast Asia's largest economy.

Its budget forecast expansion of 6 percent. The chief economics minister cut that to 5.9 percent on Oct. 3 and President Susilo Bambang Yudhoyono's new forecast represents a further reduction.

Yudhoyono was speaking on Monday during a visit to the eastern region of Sulawesi, the official Antara news agency said.

"Despite the hardships at the moment, Indonesia can still have a high economic growth rate ... We hope the country's economic growth rate can reach 5.7 or 5.8 percent by the end of this year," Yudhoyono said.

Economists were doubtful, especially in the wake of a near meltdown in the rupiah currency in August that forced the central bank to jack up interest rates sharply. ADVERTISEMENT



"I think that's a very tall order, given what we have seen, the small crisis in August, the central bank raising rates, and inflation," said Euben Cuaton Paracuelles, an economist at DBS Bank.

"I think it will be difficult for the economy to achieve a high end of the five percent range."

Yudhoyono's comments follow remarks by central bank governor Burhanuddin Abdullah late on Monday that inflation could be as high as 14 percent this year because of big increases in domestic fuel prices this month.

Abdullah said interest rates might have to rise further.

INFLATION FEARS

The central bank had previously predicted 2005 inflation of 12 percent, after fuel price rises averaging more than 100 percent took effect on Oct. 1 as state subsidies were reduced to take pressure off the state budget and the rupiah.

The consumer price index rose 9.06 percent in September from a year earlier. Inflation last year was 6.4 percent.

"The 14 percent inflation forecast itself is surprising," said Winang Budoyo, an economist at Mandiri Sekuritas.

"I hope after ... this month, the pressure on prices would ease for the rest of the year due to a lack of purchasing power."

He said Mandiri Sekuritas was forecasting GDP growth for the year of 5 percent. The economy grew 5.1 percent in 2004.

Indonesia has raised its benchmark one-month SBI interest rate by nearly 360 basis points since the start of the year and Abdullah said on Monday the central bank would keep monetary policy tight through the first half of 2006.

The one-month SBI rate is currently at 11 percent.

Around half the rise in interest rates came in the third quarter, when the rupiah dropped to a four-year low of 11,750 per dollar, due in part to pressures stemming from record-high world oil prices. It was at 10,030 per dollar on Tuesday.

Even though it is a member of the OPEC oil-producing cartel, Indonesia imports oil products, for which it must pay U.S. dollars, which puts downward pressure on the rupiah.

Sharply higher prices of staple goods have caused unrest and rioting in Indonesia in the past, especially at the height of the Asian financial crisis in 1997-98.

However, this month's big increase in the price of gasoline, diesel and the kerosene that poor Indonesians use for cooking triggered protests that were muted by the country's recent standards.

[Blue_Sky]

Luhur Hertanto - detikFinance


Jakarta - Di tengah bertambahnya beban masyarakat akibat kenaikan harga BBM, pemerintah tetap gengsi untuk minta keringanan utang karena merasa masih mampu mencicil. Padahal pada tahun 2006, utang yang jatuh tempo cukup besar.

"Kita mempunyai kemampuan untuk membayar. Kita tidak ada alasan menunda utang yang sudah jatuh tempo," kata Kepala Badan Pengkajian Ekonomi, Keuangan, dan Kerja Sama Internasional (BAPEKI) Departemen Keuangan Anggito Abimanyu.

Hal ini disampaikan dia usai bertemu Wapres Jusuf Kalla untuk membahas APBN 2006 di Istana Wapres, Jl Medan Merdeka Selatan, Jakarta, Selasa (25/10/2005).

Dijelaskan Anggito, utang luar negeri yang jatuh tempo tahun depan dan harus dibayar pemerintah berjumlah Rp 90-an triliun. Rincian utang tersebut adalah Rp 60 triliun untuk cicilan utang pokok dan cicilan bunga sekitar Rp 30 triliun.

Utang itu antara lain kepada Bank Dunia, Asian Development Bank (ADB), bilateral dan multilateral. "Bilateralnya yang paling besar ke Jepang," tambahnya.

Angka itu berarti melebihi jumlah subsidi BBM tahun 2005 yang dipangkas menjadi Rp 89 triliun, dengan mengorbankan kenaikan harga BBM. (qom)

link (http://jkt2.detikfinance.com/indexfr.php?url=http://jkt2.detikfinance.com/index.php/detik.read/tahun/2005/bulan/10/tgl/25/time/175819/idnews/468825/idkanal/4)

[Blue_Sky]

http://www.bi.go.id/NR/rdonlyres/EF6B57A1-C0D4-4031-B563-AF7644266DF0/2963/uangbaru.jpg

http://www.bi.go.id/NR/rdonlyres/1CF9E90B-1B78-41C0-ACA5-4816FA5CF700/2961/uncut.jpg

http://www.bi.go.id/web/id/Siaran+Pers/sp+79605.htm
No.7/ 96 /PSHM/Humas


Uang Kertas Pecahan Rp50.000 dan Rp10.000 Tahun Emisi 2005 Resmi Diluncurkan



Bank Indonesia mulai hari ini secara resmi mengeluarkan dan mengedarkan uang kertas baru pecahan Rp50.000 dan Rp10.000 tahun emisi 2005 sebagai alat pembayaran yang sah di Indonesia. Uang pecahan Rp 50.000 tahun emisi 2005 bergambar utama Pahlawan Nasional I Gusti Ngurah Rai di bagian depan dan gambar Danau Beratan di Bedugul, Bali, pada bagian belakang. Sedangkan uang pecahan Rp 10.000 tahun emisi 2005 bergambar utama Pahlawan Nasional Sultan Mahmud Badaruddin II di bagian depan dan gambar Rumah Limas di Palembang pada bagian belakang.

“Kantor pusat maupun seluruh Kantor Bank Indonesia hari ini siap mendistribusikan uang kertas baru tersebut kepada masyarakat yang membutuhkan”, papar Deputi Gubernur Bank Indonesia, Maulana Ibrahim. Penerbitan uang kertas emisi baru tersebut merupakan implementasi kebijakan Bank Indonesia di bidang pengedaran uang yaitu untuk memenuhi kebutuhan uang rupiah di masyarakat dalam jumlah nominal yang cukup, jenis pecahan yang sesuai, tepat waktu dan dalam kondisi yang layak edar.

Uang kertas pecahan baru yang diterbitkan kali ini juga mengakomodasi kebutuhan para tuna netra dengan menyediakan kode tertentu (blind code) di samping kanan bagian muka uang. Disamping itu juga terdapat beberapa tambahan unsur pengaman yang lebih canggih dan mudah dikenali oleh masyarakat seperti benang pengaman yang jauh lebih lebar yang terlihat seperti dianyam (windowed), nomor seri yang berjenis teleskopik dan tidak simetris (asimetris) dan tinta berubah warna (OVI/optical variable ink).

Selain itu, seperti pada saat mengeluarkan uang kertas baru pecahan Rp100.000 dan Rp20.000 tahun emisi 2004, bersamaan dengan dikeluarkannya uang kertas baru pecahan Rp50.000 dan Rp10.000 tahun emisi 2005, Bank Indonesia juga mengeluarkan Uncut Banknotes (uang khusus yang belum dipotong/uang bersambung) dalam bentuk 2 lembar, 4 lembar dan 45 lembar dengan jumlah terbatas. Selain sebagai benda koleksi, Uncut Banknotes ini juga tetap berlaku sebagai alat pembayaran yang sah dan lazim dikeluarkan di berbagai negara sebagai penerbitan uang khusus.

Tujuan lain dikeluarkannya uang kertas baru ini adalah memperhatikan usia edar yang telah cukup lama pada pecahan sebelumnya yaitu 6 tahun untuk uang kertas pecahan Rp50.000 tahun emisi 1999 dan 7 tahun untuk pecahan Rp10.000 tahun emisi 1998. Walaupun uang kertas pecahan baru tersebut sudah resmi ditetapkan sebagai alat pembayaran yang sah, uang pecahan Rp50.000 Tahun Emisi 1999 dan Rp10.000 Tahun Emisi 1998 masih tetap berlaku sebagai alat pembayaran yang sah. Gambar dan ciri-ciri lengkap uang kertas dimaksud juga dapat dilihat di situs Bank Indonesia (www.bi.go.id).

Terkait dengan peningkatan kebutuhan uang kartal pada hari raya lebaran, Bank Indonesia telah siap pula memenuhi kebutuhan masyarakat akan hal tersebut. “Bank Indonesia bekerjasama dengan beberapa perusahaan penukaran uang pecahan kecil, telah pula siap mengantisipasi penukaran uang pecahan kecil di beberapa tempat strategis, termasuk Kantor Bank Indonesia”, tambah Maulana.

Jakarta, 20 Oktober 2005
BIRO HUBUNGAN MASYARAKAT

Rizal A. Djaafara
Kepala Biro



sumber berita : http://www.bi.go.id/web/id/Siaran+Pers/sp+79605.htm
No.7/ 96 /PSHM/Humas
berita terkait :
detil ciri-ciri dari masing2 pecahan
http://www.bi.go.id/web/id/Info+Terbaru/Humas/peng+urk+191005.htm
pengumuman dikeluarkan uang baruhttp://www.bi.go.id/web/id/Info+Terbaru/Humas/it+uang+baru+191005.htm

[Alvin]

2006 budget to be more expansive to create jobs and accelerate economic growth. 1.1% deficit is the target.

------------------------------------------------------------------------
APBN 2006 lebih ekspansif
JAKARTA: Wapres Jusuf Kalla memproyeksikan APBN 2006 yang lebih ekspansif dalam penghematan maupun penerimaan negara guna mendorong dan menciptakan lapangan kerja, termasuk mencapai target pertumbuhan 6,1%.
Kepala Badan Pengkajian Ekonomi Keuangan dan Kerjasama Internasional (Bapekki) Anggito Abimanyu mengatakan ada dua hal yang menyebabkan APBN 2006 bisa lebih ekspansif.

Pertama, bisa berhemat karena belanja subsidi BBM dapat dikurangi signifikan. Kedua, penerimaan negara cukup stabil pada 2006 sehingga ada ruang bagi pemerintah untuk lebih ekspansif memotori penciptaan lapangan kerja melalui pembangunan infrastruktur.

"Dalam pertemuan tadi Wapres memberi arahan supaya kita agresif lagi dalam ekspansi APBN. Beliau ingin ada tambahan ekspansi ekonomi," kata Anggito yang bersama Menkeu Jusuf Anwar diterima Wapres Jusuf Kalla di Istana Wapres kemarin.

Anggito menyatakan pada 2006 nanti akan lebih ekspansif karena subsidi tertentu, konsumsi tertentu dan konsekwensi laba Pertamina yang besar bisa diambil sebagai bagian dari penerimaan.

1,1% PDB

Sementara itu, wakil pemerintah dan Panitia Anggaran DPR dalam Panitia Kerja (Panja) A tadi malam menyepakati defisit anggaran RAPBN 2006 sebesar 1,1% dari PDB.

Menkeu Jusuf Anwar mengatakan peningkatan defisit hingga mencapai 1,1% disebabkan adanya usulan tambahan belanja sebesar Rp5 triliun yang akan dialokasikan untuk sektor kesehatan, pendidikan, pertahanan keamanan, pertanian, dan perhubungan.

Dia menambahkan defisit 1,1% itu diharapkan dapat menjamin pertumbuhan PDB sebesar 6,1% dan meningkatkan jumlah lapangan kerja.

Sebelumnya hasil Panja A, setelah digabungkan dengan hasil Panja B menurunkan angka defisit menjadi sekitar 0,6% dari PDB 2006.

Amin Said Husni, Ketua Panja A, mengatakan potensi penurunan defisit anggaran dalam RAPBN 2006 tersebut didapatkan setelah Panja B menemukan 'kesalahan penempatan' alokasi dana untuk tiga BUMN sekitar Rp350 miliar di antaranya untuk PT KAI dalam belanja negara.

"Sekalipun jumlahnya tidak terlalu besar tapi secara persentase [dari PDB] bisa turun jadi 0,6% dari PDB. Semestinya masuk dalam kategori penyertaan modal pemerintah dalam perusahaan negara [BUMN]."

Oleh Erwin Nurdin & Lutfi Zaenudin
Bisnis Indonesia

[XxRyoChanxX]

wow new paper money...nice

[Alvin]

Indonesia steers toward recovery By Donald Greenlees International Herald Tribune

THURSDAY, OCTOBER 27, 2005


JAKARTA Out on what is called Motor Main Street here, there are still reminders that foreign manufacturers once viewed Indonesia with the enthusiasm they usually reserve for China and India. Dotted along this dusty road in north Jakarta are auto manufacturing plants bearing names like Toyota, Honda and Daihatsu.

In the 1970s, Indonesia gained the distinction of being the first country in Asia where Japanese carmakers set up full assembly plants as a launching pad for cheap exports.

The factories still bustle with workers, but the numbers have thinned in recent years amid tougher competition from elsewhere in the region. Nowadays most of these factories serve Indonesia's own appetite for about half a million cars a year.

Yet even though many manufacturers, foreign and domestic, have eschewed Indonesia in recent years, blaming regulatory problems, poor law enforcement and rising wage bills, one is making a bet on the country.

Squeezed between the big names in automaking in a drab strip of metal sheds and low-rise office blocks, 1,000 employees of Indonesian-owned Inkoasku are busy supplying steel and alloy wheel hubs to major manufacturers.

The company is also exporting wheels to carmakers in Asia and Europe and has confirmed its commitment to stay in Indonesia by building a factory in West Java.

"In terms of quality we are better than India and China," said Inkoasku's chief executive, Hadi Kasim, explaining his faith in domestic manufacturing. "China can sell more cheaply, but the quality is not as good."

Kasim said that he paid a 7.5 percent tariff to import a type of steel that Indonesian steelworks do not make, and that government regulation foisted on him another layer of unnecessary costs. But he is one of a growing number of manufacturers and other investors who are gambling that Indonesia can still compete. This is despite the enduring problems of corruption and terrorism and sudden economic shocks, like a 22 percent plunge in the rupiah last August before it recovered.

The sentiment is borne out in figures showing a sustained rebound of investment that promises to underpin medium-term growth of 7 percent a year, according to World Bank forecasts. In an economic report released in early October, the bank highlighted figures showing that investment had grown at a rate of more than 10 percent for six consecutive quarters - the longest period since the late 1980s.

From January to August this year, the bank said capital goods imports grew by an "amazing" 36 percent.

In nominal terms, capital goods imports are as high as they were in 1995 to 1996, before the economic crisis.

"At the end of the day, what matters are results and so far the results are good," said Andrew Steer, the World Bank's country director for Indonesia.

"If someone had said to us a year ago: 'Would you be happy with investment growth of 15 percent over a year and investment to GDP rising from less than 20 to approaching 23 percent of GDP in the first year? Would you regard that as success?' I think almost everybody would say that is a pretty good first year's work," Steer said.

Indonesia's economic managers are winning credit from observers for taking some tough decisions to keep the economy on a sustainable growth track.

Most notable was a decision by the year-old government of President Susilo Bambang Yudhoyono to slash subsidies on gasoline, diesel and kerosene, which had ballooned with the world price of oil and were threatening to consume a third of the budget. It is a move Steer described as "a huge marker in the entire administration that they can make extremely tough decisions."

Gasoline prices were raised 88 percent and kerosene, used mainly by poor households for cooking, rose 186 percent despite fears of popular protests.

It was the second increase this year. Even so, Indonesians are buying their fuel at well below world prices.

There were also other, less-noticed reforms flagged along with the cuts to fuel subsidies. To soften the blow from more expensive fuel, the government announced packages of social assistance and business reforms.

Among the business measures were cuts to tariffs, transportation taxes and charges, and the removal of some red tape in customs.

The feared backlash against the rise in fuel prices failed to materialize, partly the result of direct financial compensation to 15.5 million poor households. Even another series of terrorist bombings in Bali on Oct. 1, the same day that fuel prices rose, only briefly ruffled financial markets.

Still, the challenges are great. The increase in fuel prices and rising inflation and interest rates have sapped some of the momentum from the economy. Bank Indonesia, the central bank, forecasts growth will slow to 5.7 percent from an expected 5.9 percent this year and has shaved forecasts for next year. Inflation is forecast to rise to 12 percent by year end, largely because of the central bank's inaction on interest rates last year.

Moreover, the government often struggles to have its agenda implemented because of bureaucratic inertia or resistance and the time it takes to get legislation through Parliament.

Critics say the president and economic ministers have not used the mandate given by voters last year decisively enough. Yudhoyono is the first president to be directly elected. Already there is talk of a reshuffle to dump members of the economic team.

In an interview, Aburizal Bakrie, the coordinating minister for economic affairs, responded to the critics by declaring: "I am fighting the bureaucracy." He vowed to push ahead with reforms to encourage business and investment and is negotiating a package that he hopes to announce in January. Among the items on his agenda are more tariff reductions.

The appointment of Bakrie, the former head of one of Indonesia's largest family-owned conglomerates, to the chief economic ministry initially raised eyebrows because of concerns over a potential conflict of interest. The businesses are now run by Bakrie's brothers and son.

But Bakrie trades on his business credentials to show he knows what needs to be done. Told of the complaints by Kasim, the wheel maker, over the tariff on steel imports, Bakrie immediately said he would abolish the tariff.

"I will be very bold about this," he said. "As a former businessman, I should say that there is no point in keeping a tariff in which there is no local industry."

[sanhen]

eh.. the news about is pasted twice... *just realize it after half way reading the duplicated part*

[Alvin]

A good blog, this one.
------------------------------------------------------------------

October, 26 2005 @ 11:58 am

Envy Thy Neighbour

Once again Transparency International on October 18, 2005 announced its Corruption Perception Index 2005, and once again Indonesia falls behind its ASEAN counterparts (except Myanmar). Should we be jealous of Singapore that continues to rank in the top five corruption-free countries?

Indonesia did improve by 0.2 point, from the index point of 2.0 (in 2004) to 2.2 (10 being the maximum point for 100% clean of corruption). Good enough for 6th place as the world’s most corrupt country. The Indonesian chapter of Transparency International said the tiny improvement became insignificant in the ranking as other countries also showed better performances. TI-Indonesia credited the improvement to the work of the Corruption Eradication Commission (KPK) and the State Auditory Body (BPK). However, even though the organization has high hopes of the KPK which is co-led by TI-Indonesia’s former chairman Erry Riyana Hardjapamekas, the organization figures that such anti-corruption campaigns is far from enough. TI-Indonesia’s Chair and lawyer Todung Mulya Lubis said that the corruption perception index does not reflect the level of corruption. It tabulates the perceptions of business performers and analysts on economic practices in Indonesia. Such perceptions are formed through mostly their experiences and interactions in the country.

The World Economic Forum (WEF) said that Indonesia is an “uncompetitive” nation since it requires up to 151 days to business licenses – not to mention also the hurdles of red tape bureaucracy, bribes and corruption. Transparency International Chair Peter Eigen said that “when countries improve governance and reduce corruption, they reap a development dividend’. And in this relation, Mulya Lubis said researches have proved that corrupt countries have low level of foreign investments. Exactly what the country is struggling with.

Now then, should we envy Singapore?

One of the aspects missed by the index in the relations of corruption and Singapore is how the country becomes such a safe haven for many people, and in our case, safe haven for Indonesian debtors and corruption suspects. There are a handful of names. Debtor Sjamsul Nursalim played sick and did the 'Pinochet' in Singapore. BNI scandal culprit Maria Pauline Lumowa ran there too. Recently, the Attorney General Abdul Rahman Saleh said his office is still trying to extradite 12 corruption suspects from neighboring Singapore.

Indeed the country is relatively clean from corruption and there is so much we can learn from the city, … ehm, country. But you do have to feel sorry about how un-free the country is from freedom of expression, particularly on politics.

AUTHORITARIAN CAPITALISM is the term as its government places a “limited and selective set of persistent policy interventions into market activities” while on the other hand, the same government imposes “heavy restrictions on political activity”. Professor Christopher Lingle of the Case Western Reserve University said that such which has been adopted by Singapore’s single-party regime beams “conflicting and misleading signals about a relatively free economy whereas political freedoms are repressed within an authoritarian-based government”.

Hope this is not one of the models the government is considering when improving TI Corruption Index comes to mind.

Well, this is no scapegoat to Indonesia’s corruption problems. There surely will be more blogs on KKN. Singapore is not why Indonesia becomes so corrupt. But, SBY and the other previous presidents (Soeharto not included since he is just beyond the term guilty) are to blame for failing to pursue corruption suspects hiding in Singapore. While there are some prominent cases tackled by KPK, there are still lots of big fish the country has allowed to escape. In this day and age, we need more than little fish.

By: Enrico Aditjondro | Category: Economy

[Alvin]

Friday October 28, 2:54 PM
Indonesia '05 budget deficit may be just 0.5 pct/GDP
JAKARTA, Oct 28 (Reuters) - Indonesia's 2005 budget deficit might come in at 0.5 percent of the country's gross domestic product (GDP), below the official forecast of 0.8 percent, Vice President Jusuf Kalla said on Friday.
He attributed the potentially lower deficit to the fact the government may not have completed all its planned spending by the end of the year.

Indonesia's government and the parliament's budget commission agreed on Thursday on a 2006 budget with a deficit set at 22.43 trillion rupiah ($2.2 billion) or 0.7 percent of the country's gross domestic product.

Indonesia's finance minister Jusuf Anwar had earlier in the week proposed a 1.1 percent deficit for 2006.

[David-80]

There is rumour if Finance and BUMN ministers will get replace, as for BUMN minister, which is sugiharto (ex-medco) I am not suprised with the replacement, Sugi and Bakrie had been in personal conflict ever since they were first elected last year.

cheers

[Alvin]

There is rumour if Finance and BUMN ministers will get replace, as for BUMN minister, which is sugiharto (ex-medco) I am not suprised with the replacement, Sugi and Bakrie had been in personal conflict ever since they were first elected last year.

cheers

I think the Housing Minister should be replaced..no...FIRED... he's failed miserably in his first year with no progress whatsoever in the construction of public housings/apartments.

[Alvin]

Indonesia drive to halt graft turns to judiciary
By Shawn Donnan in Jakarta
Published: October 31 2005 01:45 | Last updated: October 31 2005 01:45

A year into the rule of President Susilo Bambang Yudhoyono, graft busters in Indonesia are turning their attention to the country’s notoriously corrupt judiciary through a case involving the half-brother of former strongman Suharto and Indonesia’s top court.

Investigators from Indonesia’s Anti-Corruption Commission, or KPK, are on Monday expected to question two senior Supreme Court officials in connection with claims that Mr Suharto’s half-brother, Probosutedjo, paid more than Rp16bn ($1.6m, €1.3m, £898,500) to court officials to have a corruption conviction either thrown out or reduced.

The case emerged earlier this month after Mr Probosutedjo complained publicly that he had been forced to pay the bribes to Bagir Manan, the Supreme Court’s chief justice, and other court officials, all of whom have denied any wrongdoing.

The payments, he said, were made in connection with his pending appeal of a 2003 four-year sentence for pocketing Rp100bn in state reforestation funds during his half-brother’s rule.

Judicial corruption is widely acknowledged as one of the biggest problems facing foreign businesses in Indonesia and one of the main barriers for Mr Yudhoyono’s government in its bid to attract fresh foreign investment to south-east Asia’s largest economy.

It is not clear why Mr Probosutedjo, who like many Indonesians goes by one name, made what appear to be self-incriminating complaints public, although in televised appearances since, he has adopted the attitude of an outraged customer.

But together with the arrest last week of the general heading the national police fraud squad in connection with a $170m (€140m, £96m) bank fraud case, the issue has emerged as a sign of progress in the fight against graft in Indonesia, long considered one of the world’s most corrupt countries.

“We have never seen a general at the police arrested, or the chief [judge] of the Supreme Court investigated. This is really the first time something like that has happened,” said Teten Masduki, head of Indonesia Corruption Watch.

Until now the anti-graft efforts initiated by the government of Mr Yudhoyono, who took office last year promising to lead a war against corruption, have been focused on the country’s big state banks and regional politicians.

With the bribery allegations at the Supreme Court, however, the KPK says it now has a way into tackling corruption in the judiciary.

“This is the entry point for us to judicial reform,” Erry Riyana Hardjapamekas, the KPK’s deputy chairman, said in an interview with the Financial Times on Sunday.

Indications that the KPK was taking the Probosutedjo case seriously emerged last Thursday when commission investigators raided offices at the Supreme Court.

[Zorobabel]

Indonesia's Telkomsel users up 71.5 pct y/y in Sept

JAKARTA, Oct 31 (Reuters) - Indonesia's largest mobile phone operator PT Telekomunikasi Selular, had 23.48 million mobile phone users at end of September this year, up 71.5 percent from the same time in 2004, the company said on Monday.

Its total blended average revenue per users (ARPU) declined 19 percent to 86,000 rupiah ($8.6).

[wS]

BTW is PT Telekomunikasi Selular belongs to PT Telekom Indonesia? or is it the same?

[sanhen]

its a different company. telkom held the majority of shares, the rest is owned by singtel *i think*

[Blue_Sky]

Kerugian Akibat Flu Burung Rp1,1 Triliun

JAKARTA-Kerugian yang diderita peternak ayam akibat merebaknya wabah flu burung hingga akhir 2004, diperkirakan mencapai Rp1,1 triliun. Sekitar 2,5 juta peternak merugi akibat kematian unggas maupun kehilangan pasar akibat turunnya konsumsi daging ayam.

"Satu-satunya bahan pangan yang harganya turun menjelang Lebaran hanya daging ayam. Harga terakhir dijual Rp3.500 per kilogram. Padahal, menjelang Lebaran selalu di atas Rp7.000 per kilogram,” kata Menteri Pertanian Anton Apriantono usai rapat koordinasi tingkat menteri membahas persiapan pandemik flu burung di Kantor Menko Kesra, Jalan Medan Merdeka Barat, Jakarta, Minggu malam lalu.

Rapat yang berakhir pukul 23.45 tersebut, membicarakan rekomendasi konferensi menteri kesehatan dari 80 negara dan sembilan donor internasional membahas antisipasi pandemik manusia yang disebabkan Avian Influenza. Rakor dipimpin Menko Kesra Alwi Shihab dan dihadiri Mendag Mari Elka Pangestu, Menneg Lingkungan Hidup Rachmad Witoelar, Mentan Anton Apriantono, Menkes Siti Fadilah Supari dan Menneg PPN/Kepala Bappenas Sri Mulyani Indrawati.

Anton mengatakan, Indonesia kehilangan pangsa pasar utama daging ayam karena Jepang tidak lagi bersedia menerima ekspor daging ayam asal Indonesia. Ini akibat Indonesia dimasukkan dalam daftar negara terinfeksi flu burung berat. “Padahal, dari 1,4 miliar ekor ayam di Indonesia, hanya sekitar 10 juta ekor ayam yang terinfeksi flu burung. Meski hanya sedikit tapi seluruh peternakan terkena imbasnya,” kata Anton.

Menurut Menkes Siti Fadilah Supari, bila terjadi pandemik flu burung Departemen Kesehatan membutuhkan anggaran setidaknya USD13 juta (sekitar Rp130 miliar) untuk pembelian obat antivirus AI (Tamiflu), surveillance dan pemantauan kondisi luar biasa, penyediaan sarana alat kedokteran serta penyiagaan 44 rumah sakit rujukan untuk merawat penderita. Asumsinya, pandemik flu burung menyerang 1,4 persen populasi atau sekitar 2.800 orang.

Siti Fadilah mengatakan, Indonesia baru memiliki 750 ribu tablet Tamiflu bantuan Australia dari total kebutuhan untuk kondisi darurat sekitar 22 juta butir. Meski demikian, kebutuhan persediaan obat tersebut sulit untuk dipenuhi karena kapasitas produksi Roche AG, produsen Tamiflu, telah full booked hingga tahun 2007. “Salah satu poin penting, rekomendasi Ottawa adalah terbuka kemungkinan Tamiflu akan menjadi obat generik yang bisa diproduksi oleh setiap negara,” katanya.

Menkes menegaskan, belum ditemukan kasus penularan flu burung dari manusia ke manusia yang mampu memicu pandemik manusia. Yang ada adalah loncatan dari unggas ke manusia. Untuk itu, menkes meminta masyarakat meletakkan kandang unggas minimal 200 meter dari rumah, memelihara sanitasi kandang dan menimbun kotoran secara rutin serta memasak daging ayam dengan suhu minimal 70 derajat celcius.

Saat ini, ada lima pasien flu burung positif yang tengah dirawat di sejumlah rumah sakit rujukan, di mana tiga orang di antaranya meninggal dunia, 38 orang suspect flu burung dengan enam orang meninggal dunia dan 76 pasien negatif di mana 14 orang di antaranya meninggal dunia. (noe/jpnn)

[Alvin]

Bad news, inflation is balooning......
-----------------------------------------------------------

Indonesia's October Inflation Rises to 17.9% on Fuel (Update1)
Nov. 1 (Bloomberg) -- Indonesia's inflation rate accelerated last month at its fastest pace in at least three years after the government more than doubled fuel prices on Oct. 1.

Consumer prices in Southeast Asia's largest economy climbed 17.9 percent in October from a year earlier after a 9.1 percent rise in September, the Central Statistics Bureau said today in Jakarta. That's faster than the median forecast of 13.3 percent in a Bloomberg survey.

BP Transjakarta Busway, which runs buses on dedicated lanes, raised fares by 40 percent, while PT Blue Bird, a Jakarta-based taxi company, increased rates by 25 percent after President Susilo Bambang Yudhoyono's government more than doubled fuel prices to keep the budget deficit at about 0.9 percent of gross domestic product. Rising prices may force Bank Indonesia to raise interest rates, said economist Lee Heng Guie.

``I expect the central bank to raise rates by another 25 basis points by the end of the year,'' Lee, an economist at CIMB Securities Sdn. in Kuala Lumpur, said before the announcement. ``A higher interest rate and rising inflation will slow down household consumption and we still have to watch out for the bird flu, which could slow down spending further.''

Indonesia's central bank on Oct. 24 raised its 2005 inflation estimate to 14 percent from 12 percent, its second revision this month. Bank Indonesia raised its key rate used as a reference for its bill sales a full-point rise to 11 percent on Oct. 4, the fourth increase in nine weeks. The central bank's one-month bill, known as the Sertifikat Bank Indonesia, or SBI, last yielded 11 percent in May 2003.

Fuel Prices

The currency has risen 6.2 percent from a four-year low in August after the government pledged to raise fuel prices and the central bank increased interest rates. The rupiah has fallen 8.8 percent this year, making it the second-worst performing among 15 Asia-Pacific currencies tracked by Bloomberg.

Yudhoyono's government almost tripled kerosene prices and more than doubled diesel tariffs on Oct. 1. Gasoline prices rose by 88 percent. The move will help the government cap subsidies this year at 89.2 trillion rupiah ($8.7 billion).

Indonesia's inflation rate reached a 26-month high of 8.8 percent in March after the government increased fuel prices by an average of 29 percent to cut subsidies. October's 17.9 percent inflation rate was the highest since the statistical office changed its base year for the compilation of the consumer price index to 2002.

A separate report showed that exports rose to $7.28 billion in September, from $7.24 billion a year earlier. Imports rose to $4.9 billion, from $4.2 billion. The trade surplus widened to $2.38 billion in September from $1.63 billion in August.

[Zorobabel]

You gotta do what you gotta do.

[Alvin]

Interest rates are up by 125 basis points!!!!!!!!! I'm starting to worry now...
----------------------------------------------------------------------

Indonesia Raises Key Rate to Stem Surging Inflation (Update1)
Nov. 1 (Bloomberg) -- Indonesia's central bank raised its benchmark interest rate for a fifth time in nine weeks after inflation jumped to a six-year high. Stocks and the rupiah fell.

Bank Indonesia raised its key rate, used as a reference for its bill sales, to 12.25 percent from 11 percent, the central bank said today in a statement. Consumer prices surged 17.9 percent in October from a year earlier after a 9.1 percent rise in September, the government said today in a separate report.

The rupiah slumped to a four-week low on concern President Susilo Bambang Yudhoyono's Oct. 1 fuel price increases will stoke inflation and slow growth in Southeast Asia's biggest economy.

Indonesia's key stock index fell, reversing gains after the release of the inflation report. The Jakarta Composite Index fell 8.12, or 0.8 percent, to 1058.10 at the midday trading break, after gaining 1 percent earlier today. The rupiah fell 0.8 percent to 10,190 against the dollar at 12:47 p.m.

Indonesia's financial markets will close tomorrow through Nov. 8 for the Eid-ul Fitr holiday.

The currency may extend this year's 9 percent slide, the second-worst among the 15 Asia-Pacific currencies tracked by Bloomberg after the Japanese yen, on concern higher interest rates will slow growth.

The rupiah slumped to a four-year low in August as surging oil prices drained the country's finances and boosted demand for dollars. Indonesia, the only member of OPEC that is a net oil importer, has capped fuel prices for the past three decades.

[bahar]

I'm afraid this is not gonna be the last one this year.

But personally I think the central bank has acted more independently from the government nowdays. The last plunge in rupiah was partly caused by inaction on the part of the central bank, most likely influenced by the government not to slow growth down. Yea... I think it's a bold move to raise 1.25%. I tend to agree with the central bank.

[Alvin]

^^A very bold move.....but necessary.
It's really bad for business though, I can see a jump in bank non-performing loans and consumer loan defaults. Bad for property market too.

[sanhen]

yes.. i think whats happening now is all expected.

[Alvin]

3Q GDP figures will be released in about two weeks or so. Anyone would like to join my little game of guessing? I'm predicting 5.3% y-o-y growth for 3Q 2005, and 5.5% growth for the whole of 2005. (have to downgrade it now that outlook's deteriorated)

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


Wednesday November 2, 7:38 AM
UPDATE: Indonesia Inflation, Rate Rise Choke GDP Outlook


By I Made Sentana and Phelim Kyne
OF DOW JONES NEWSWIRES

JAKARTA (Dow Jones)--Indonesia's central bank Tuesday raised interest rates at its most aggressive pace since the Asian crisis in response to a surge in inflation, which together threaten to undermine the country's upbeat economic growth forecasts, analysts say.

ADVERTISEMENT


The consumer price index soared 17.89% in October from a year ago, prompting the central bank to increase the benchmark Bank Indonesia rate by 125 basis points to 12.25%, which is at its highest since February 2003.

The size of the rate rise was the largest since the Asian financial crisis in the late 1990s. The dulling impact of the tightening on activity will make it difficult for the government to achieve its growth forecasts.

Indonesia's government of President Susilo Bambang Yudhoyono has projected gross domestic product will expand 6.0% on-year in 2005 and 6.2% in 2006. Those projections outpace the economic expansion of 5.4% on-year in 2004.

Coordinating Minister for the Economy, Aburizal Bakrie, downplayed the October CPI result, which outpaced a 13.66% consensus of economists' forecasts and the September CPI rise of 9.06%.

He said the sharp rise in prices is a "one-off" increase that will start to subside this month.

"Inflation will start to slow down in the first semester of 2006 and this trend will continue to the end of next year," Bakrie and the central bank said in a joint statement.

The economy minister attributed the inflation surge to the government's sharp cut in fuel subsidies, which on average more than doubled fuel prices on Oct. 1. He said the government projects inflation will average a more modest 7.0% to 8.0% in 2006.

But the fuel-price-powered inflationary surge and the interest rate hike implemented to reduce it will take their toll on economic growth, said HSBC Regional FX Strategist, Richard Yetsenga.

"With the inflation shock being larger than expected and higher interest rates...our economists look for GDP down to 3.0% by early 2006, from the 6% plus rates of (the first half of 2005)," Yetsenga said in a research note.

Standard Chartered economist Fauzi Ichsan said that his bank will likely revise down its current Indonesia GDP growth projection of 5.5% on-year in 2005 due to the combination of rising inflation and higher interest rates.
"Consumption has already been hit" by the fuel price rise-powered inflation increase, Ichsan said.

Indonesia relies on domestic consumption to deliver around 70% of total annual gross domestic product.

The gloomy projections are the latest bad news for an economy that began 2005 with some of the rosiest macroeconomic projections in the region.

Since then Yudhoyono's economic team has grappled with the budget-busting impact of record-high oil prices on the global market that hover around $60 per barrel.

High oil prices contributed to a currency "mini-crisis" in September that drove the rupiah down to its lowest level against the U.S. dollar for more than two years.

The rupiah has since stabilized and ended flat Tuesday at IDR10,115 against the U.S. dollar

The twin threat of rising inflation and climbing interest rates are already drowning out economic bright points, including official data Tuesday that showed a 52% rise in Indonesia's trade surplus in September from August to $2.48 billion.

"The rupiah will continue to weaken in the fourth quarter (of 2005) as inflation expectations are still high and the U.S. Federal Reserve still looks willing to raise rates," said Mandiri Securities Debt Market Research head Paulus Nurwandono.

Nurwandono expects that inflationary pressure will boost the USD/IDR to an average of 10,500 to 11,00 by end-2005 and the benchmark Bank Indonesia rate will hit 12.5% to 13.0% within the same time period.

Bank Indonesia Governor Burhanuddin Abdullah has indicated that the central bank is prepared to implement interest rate hikes as needed to stave off inflation, but hasn't issued any projections on where rates will go in the months ahead.

Burhanuddin must balance any future rate hikes with the potential harm they might do to economic growth, Standard Chartered's Ichsan said.

"The issue is (Bank Indonesia) has to find a balance between assuring the market that they're serious about fighting inflation and ensuring that the real sector isn't excessively hit by higher rates," Ichsan said.

"Some market players would want a 200 basis point increase to dampen inflation expectations, but it would hit the real sector."

[Zorobabel]

I also say 5.3% growth in Q3. I expect GDP growth for the entire year to be about 5.65%.

[Alvin]

Indonesia's prospects at risk from epidemic
By Ian Bremmer
Published: November 1 2005 02:00 | Last updated: November 1 2005 02:00

Foreign investors are bullish about Indonesia's mid- to long-term growth prospects.


They cheer President Susilo Yudhoyono's political popularity, his stated goal of rooting out corruption at all levels of government, and Indonesia's growing reputation as an investment haven from political risks in China.

For the first four months of 2005, approvals for foreign direct investment rose to nearly $5bn; a 50 per cent increase on the same period last year. But the bulls overlook a growing risk to their investments: the Indonesian government's unwillingness to deal openly with the threat of avian flu.

Mr Yudhoyono's political popularity is the bedrock of investor confidence in Indonesia. He was elected in free and fair balloting, a legitimacy that his predecessor, Megawati Sukarnoputri, never enjoyed. Mr Yudhoyono's public approval numbers remain safely above 50 per cent, despite a sharp rise in domestic energy prices that increased fuel costs by an average of 50 per cent.

Mr Yudhoyono's efforts to root out corruption have had early, well-received results.

Investors flock to Indonesia as a hedge against political risk in China. Mr Yudhoyono's government is beginning to profit from steps to improve Indonesia's fraught investment climate.

Investor confidence is buoyed by a peace agreement signed in August by representatives of the Indonesian government and separatist rebel groups from the long-troubled Aceh province.

The document is loosely worded and does not guarantee long-term stability. But it has suspended a bloody 30-year conflict.

The process of rebuilding an Aceh in which more than 130,000 people were killed in last December's tsunami remains agonisingly slow. But the slow pace is more a result of careful planning than of corrupt and bloated bureaucracy. The international attention and financial support for Indonesian development that followed the tsunami will bring economic opportunities for the citizens of the hardest-hit regions.

So Indonesia continues to profit from investor confidence. However, markets have yet to price in the most dangerous threat to Indonesia's economic, political, and social stability: the spread of bird flu throughout the archipelago.

Elsewhere in Asia, fears that a bird flu epidemic will kill humans and rattle markets have attracted more attention. Taiwan's benchmark index plunged 2.4 percent on October 17 to its lowest level in more than five months. Hong Kong's Hang Seng index dropped 0.6 percent on October 25 on similar worries about larger-than-expected declines in tourism-related stocks.

The Asian Development Bank estimates a mild outbreak of a human-to-human transmission of the H5N1 virus may mean losses of up to $110bn in reduced consumption, investment, and trade. It says a pandemic may mean a global recession.

Some Asian governments faced strong criticism for their handling of the severe acute respiratory syndrome epidemic two years ago. It taught most of them a valuable political lesson in the importance of transparency and preparation. Yet, Indonesia, largely untouched by Sars, remains secretive about threats to public health and unprepared.

International health experts found evidence of avian flu in Indonesia more than two years ago. Many believe the virus has reached birds in two-thirds of the country's provinces.

At least seven people have been infected since July. Four have died. International health experts strongly suspect more humans have been infected and that the number will rise as the monsoon season begins in November.

Mr Yudhoyono's government has chosen to hide the scale of the threat. Indonesia has south-east Asia's largest populations of people and poultry and, unlike the country's investment climate, Indonesia's health care infrastructure has yet to recover from the 1997 Asian financial crisis.

Tri Satya Putri Naipospos, Indonesia's national director of animal health, says she warned her government of the scale of the problem more than a year ago. She gave details of the emerging threat in an interview with a local newspaper in September. She was fired the next day.

Anton Apriyantono, agriculture minister, says the government takes the threat of bird flu seriously and that Mr Yudhoyono receives a daily briefing on efforts to contain the disease. But the minister has also told journalists: "We don't want to publicise too much about bird flu because of the effect on our farms. Prices have dropped very drastically."

There is no evidence yet that any of the disease's Indonesian casualties are the victims of human-to-human transmission of the disease.

Yet government secrecy and the refusal so far to undertake the mass culling of suspected poultry called for by international public health experts shouldtrouble anyone who isbetting on Indonesia's investment climate.

[David-80]

I am going to predict Q3 gdp at 5.8%, as customer spendings were increasing ahead of the fasting month and the fact that during july, august and september premium gasoline prices were still 2,700 rupiah.

cheers

[David-80]

After airline deregulation, lets welcome the gasoline deregulation.


Shell opens first retail outlet in Karawaci


Shell Indonesia, a local arm of Royal Dutch Shell Plc, opened its first retail outlet (photo) at the upmarket Lippo Karawaci housing estate in Tangerang, some 20 kilometers west of Jakarta.

Shell offers Super and Super Extra gasoline with octane levels of 92 and 95, respectively. The Super is sold at Rp 5,700 (57 U.S. cents) per liter while Super Extra is offered at Rp 5,900.

The two types of gasoline are direct competitors for state oil and gas firm PT Pertamina's Pertamax and Pertamax Plus, which are sold at the same prices.

The retail outlet is Shell's first investment plan in the downstream sector, following the implementation of Law No. 22/2001 on oil and gas. The implementation ended Pertamina's monopoly in the downstream sector as well.

"We are proud to be back in the fuel business in Indonesia," Shell Indonesia country chairman Bob Moran said in a statement. "This site is the first of a series of outlets under development and we are prepared to make significant investments in the fuel retailing business in Indonesia."

Shell, which gets the supply of its high octane fuel from Singapore, will open its next outlet in Warung Buncit, South Jakarta, hopefully by the end of the year.

Chairman of the Downstream Oil and Gas Regulatory Body Tubagus Haryono said that "customers will have a choice, which will lead to improved service levels". --

The Jakarta Post/Leony Aurora

[tata]

Good news. I heard Petronas is also coming?
Next we wait is deregulation on railways


OOT, don't you see that this is kind of 'pattern' that works in Indonesia if we want a change? I mean change on politics, business, even social life, there must be a push from outside?

[David-80]

Good news. I heard Petronas is also coming?
Next we wait is deregulation on railways

Yeah petronas is coming too. Anyway, i would like to see deregulation of telecommunication sector rather than on railway network. Telkom has been the problem why Indonesia telecommunication sector is one of the most expensive in house-hold sector.

OOT, don't you see that this is kind of 'pattern' that works in Indonesia if we want a change? I mean change on politics, business, even social life, there must be a push from outside?

you mean there has to be foreign-trend before it actually change? because i see it that way in Indonesia :P

cheers

[sanhen]

OOT, don't you see that this is kind of 'pattern' that works in Indonesia if we want a change? I mean change on politics, business, even social life, there must be a push from outside?

the pattern is competition. many bumn in indonesia holds monopoly. and monopoly most of the time does not permit growth. it is competition as part of humanity that bring advancement to human life.

[David-80]

The good side of the economy. We are enjoying a large amount of trade surplus.

Exports up by 21% in first nine months of year

The Jakarta Post, Jakarta

The Central Statistics Agency (BPS) reported on Tuesday that the country's exports showed continuous growth during the first nine months of the year, driven by higher demand for non-oil products.

Supported by stronger global demand for electronic and mechanical goods, January-to-September total exports stood at US$62.31 billion, a 21.15 percent increase over the same period last year.

Non-oil and gas exports during the January-September period, which account for almost 78 percent of Indonesia's total income from international trade, rose 21.04 percent to $48.35 billion as compared to last year's figure.

Sales of oil and gas, meanwhile, rose 21.56 percent in the same period to $13.9 billion. However, during September alone, exports of these commodities dropped by 4.58 percent as compared to August's figure of $1.79 billion.

During the first nine months of the year, exports of electronic goods rose to $5.2 billion from $4.8 billion, while sales of mechanical goods rose to $3.1 billion from $2.7 billion in 2004.

Indonesia's exports hit a record high last year, reaching $69.71 billion, up 11.49 percent from 2003. This was mainly attributable to strong sales of non-oil and gas commodities and goods, including palm oil, electronic goods, clothing, coal and tin.

However, the Ministry of Trade's research and development agency warned that this year, as statistical calculation had shifted to the on-line method, the increase should be lower, at around 13 percent to 14 percent.

Trade minister Mari Elka Pangestu had said previously that Indonesia would focus the development of its exports on electronics, as well as footwear, textiles and textile products.

Combined, the three industries contributed $16.33 billion to the country's exports last year. As of June, exports from the three sectors stood at $7.16 billion.

Currently, a special team from the trade ministry is formulating incentives for the development of the three sectors.

The mineral fuels sector, which includes coal, also showed impressive growth from $1.95 billion in 2004 to $3.12 billion this year.

Global demand for coal has increased as countries around the world seek alternative energy sources, partly due to soaring oil prices.

The country's trade balance recorded a surplus of $18.56 billion for the first nine months of the year, with imports coming in at $43.75 billion.

Imports in September dropped to $4.89 billion, 9.3 percent lower than the $5.4 billion recorded in June

[Zorobabel]

The import drop is obviously related to depreciation of the Rupiah. It should be good for exports in the long run as well.

[otanx]

Indonesia's export on mechanical and electronic goods...
does anyone knows more details about this ,
such as what sort of goods we are producding, is there any particular brand that commenced its production in Indonesia. ?


cheers,

Otanx

[cOcO_cHaneL]

ada nilai plus yah dari Shell? less polluttion or what

[sanhen]

^^ Wah indonesia produce so many electronics... many being made at batam... Fridge (eg. Samsung).. Electronic Scale (eg. TEC).. Harddisk (eg. Seagate).. Monitor (eg. Polytron).. TV (eg. Sony).. you name it. But mostly from respective brand (overseas brand). Locally made and owned is only Polytron, AFAIK. I think Samsung (or LG, cant remember) also concentrates LCD/Plasma manufacturing in Indonesia.

[tata]

German's Semiconductor manufacturers INFINEON has a factory in Batam as well.

[Blue_Sky]

Astaga!Warta-Apa yang ditakutkan dan diramalkan oleh Bank Indonesia (BI) tentang laju inflasi yang dipredikis bisa melebihi 15% akhirnya benar-benar terajdi. Sampai pirode Januari-Oktober 2005 laju inflasi bahkan sudah mencapai 15,65 persen.

Sebuah angka yang sangat besar, Pemicunya adalah tingginya inflasi bulan Oktober saja yang mencapai 8,7 persen! Meningkat drastis dibandingkan bulan September yang hanya sebesar 0,69 persen.

Sedangkan inflasi year on year, yakni Oktober 2005 terhadap Oktober 2004 sebesar 17,89 persen. Ini adalah inflasi tertinggi selama kurun waktu empat tahun terakhir.

Penyebab inflasi terbesar adalah kenaikan harga BBM per 1 Oktober yang menyumbang inflasi sebanyak 3,47 persen. Diikuti biaya angkutan atau transportasi untuk dalam kota dan luar kota yang menyumbang 2,08 persen yang keduanya menyumbang inflasi 5,6 persen. Tingginya inflasi selain BBM juga dipengaruhi oleh kondisi menjelang Lebaran.

"Ini adalah inflasi tertinggi selama kurun waktu empat tahun terakhir," kata Ketua Badan Pusat Statistik Choiril Maksum dalam jumpa pers di kantor BPS, Jalan Dr Sutomo, Jakarta, Selasa (1/11/2005).

Kota-kota yang disurvei berjumlah 45 kota seluruhnya mengalami inflasi yang sangat signifikan. Inflasi tertinggi terjadi di Bandar Lampung yang mencapai 12,87 persen, dan inflasi terendah di Palu 3,84 persen.

Angka ini menjadi sinyal buruk bagi dunia usaha juga, apalagi Bank Sentral AS (Teh Fed) juga berencana menikkan suku bunga dalam waktu dekat. Dampaknya, secara tidak langsung Bank Indonesia (BI) juga harus menaikkan suku bunga terutama untuk menjaga iklan investasi di Indonesia lebih kompetitif juga mempertahan nilai rupiah.

"Namun bila suku bunga terus belumbung, juga berdampak buruk terhadap dunia usaha. Bahkan, bisa membuat dunia usah tidak bisa bergerak lebih leluasa akibat bunya tinggi tersebut," kata analis perbankan.

Meski demikian kita menunggu konsistensi BI yang sudah menyatakan tidak akan menaikkan BI rates di atas 12 persen selama tahun 2005 ini

astaga (http://www.astaga.com)

[Alvin]

Short term pain is long term gain for Indonesia's economy: analysts

Sunday November 6, 2005, 4:28 pm



Click to enlarge photo

JAKARTA, (AFP) - A massive rise in fuel prices has resulted in short term pain for Indonesia amid soaring inflation and jacked-up interest rates which threaten higher unemployment and social unrest.

Analysts remain convinced however that the government's policy of abandoning fuel subsidies will pay off over the longer term and deliver fiscal stability for Southeast Asia's largest economy.

David Chang, research director at Kresna Securities said financial markets and industries would be badly hit for the next six months by the rising costs of living before the economy improves.



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"I would think that the decision to raise fuel prices is the correct decision," he told AFP. "Unfortunately Indonesia has to go through a period of hardship."

However, Chang added the overall outlook remained solid.

The government slashed fuel subsidies on October 1 after its currency was battered to a four-year low as it was sold off to snap up dollars to pay for oil imports priced at historic highs.

Fuel prices rose an average of 126 percent as a result, forcing hundreds of protesters onto the streets around the nation and about 70,000 workers in the country's textile sector alone to lose their jobs.

Benny Sutrisno, chairman of the Indonesian Textile Association, was quoted by the state Antara news agency as predicting 100,000 workers will have been dismissed by the end of the year.

Protest rallies that followed the price hike were small by Indonesian standards and came nowhere near the fevered frenzy of 1998, when ex-dictator Suharto was toppled after raising fuel prices amid Asia's then economic crisis.

But data released last Tuesday showed that the full brunt of an economic storm may have only just arrived, with inflation for October clocking in at 8.7 percent from September, or 17.9 percent higher year-on-year.

This was way above expectations.

Bank Indonesia had forecast a month-on-month rise of 5.0 percent and the enormous spike prompted the central bank to immediately hike its key interest rate by 125 basis points to 12.25 percent.

The rate was just 8.75 percent in August.

Bank Indonesia is also forecasting economic growth for 2005 at between 5.5 and 6.0 percent, which compares with the government's annual growth forecast of 6.0 percent.

Song Sen Wun, a regional economist at Singapore-based CIMB-GK Research, said the sharply higher than expected inflation number was partly due to fuel price hikes being implemented ahead the festive season marking the end of the Muslim fasting month of Ramadan.

Traditionally, this is a period when people spend-up big, buying gifts for relatives and friends before travelling back to their home provinces, thus adding further pressure to the inflation figures.

"This kind of inflation is inevitable because of the big jump in fuel costs. Certainly businesses are trying to exploit the high fuel costs. There will be people who overcharge," he told AFP in regards to the holy month.

He said the government had made the right decision in raising prices and that inflation figures were still at a level the economy could tolerate, with prices expected to ease in November and December.

"Inflation will come off from early 2006 and the second half of 2006, more significantly. This is short term pain for the economy," he said.

The hike also created "a valid foundation for the economy to rebuild" but Song cautioned the government must now deliver on economic reform, specifically in tackling corruption and attracting foreign investment.

Standard Chartered economist Fauzi Ichsan agreed but warned that rising interest rates risked increasing unemployment and poverty.

And this could outweigh the intended fiscal benefit, with the overall impact putting a drag on economic growth, he added.

However, he was also adamant that the policy of abandoning fuel subsidies should help the economy over the longer run.

"The fuel price increase was so steep that its impact on prices is immediate but I expect it will be one-off and after that inflation will fall gradually," he said.

[Blue_Sky]

Would You Rather Own Google or Indonesia?: William Pesek Jr.

Oct. 11 (Bloomberg) -- Faced with poverty, surging oil prices and terrorist threats, many of Indonesia's 235 million people probably never noticed the milestone. Ditto for global investors, who care more about such things.

In April, Google Inc. surpassed Indonesia's entire stock market in value.

Think about it. A seven-year-old company that produces no physical products is now more valuable than the equity of Southeast Asia's biggest economy. Indonesia is an archipelago of some 18,000 islands holding natural resources --including oil -- that make the world's richest nations salivate. Google is, well, an Internet search tool.

It raises an intriguing question, and one Mark Matthews, a Singapore-based director at Merrill Lynch & Co., posed this week in a sales note to clients: Which would you rather own: 100 percent of the Indonesian equities market or Google?

A bit existential perhaps, but a question that focuses the mind and gets at a bigger point. Matthews' take on it? Indonesia is the clear winner.

``Indonesia is a hairy asset to be sure,'' he wrote. ``It has African levels of corruption, thousands of islands spread out over three time zones, Islamic extremists. But judging by the market's ability to withstand the most recent mini-crisis and Bali bombs, this is in the price. So there is upside if they can eventually get it right. And it is something real.''

Today's Cotton Gin?

Matthews can't help but wonder if Google will go the way of inventor Eli Whitney. ``The cotton gin changed America,'' Matthews wrote. ``It revitalized the South and boosted the British textile industry, and had a thousand other effects. And this earned the inventor, Eli Whitney, almost nothing.''

What's all this got to do with Google? ``That's sort of where Google is today,'' Matthews wrote. ``Google has a small lead over a pack of competitors, all eager to fight for one of the few remaining high-margin zones left in tech-land. Does Google management know that the supply of advertising space on the Internet is unlimited?

Google's market cap is $92 billion and last year it had $3.2 billion in sales. Indonesia's stock market is valued at $72 billion and its gross domestic product is $258 billion. PT Telekomunikasi Indonesia, the nation's biggest telephone operator, alone had sales of 33.9 trillion rupiah ($3.3 billion) in 2004. In other words, one company that's just 14 percent of the Jakarta Composite Index had more sales than Google.

Indonesia's Pros and Cons

Matthews' basic conclusion is this: Folks who buy Indonesia at current prices may do better than those who buy Google.

In 1998, for example, Microsoft Corp.'s market cap was bigger than South Korea's. Now Microsoft's is $272 billion and Korea's is $530 billion. ``If I could take a 7-year view on them, I would long Indonesia and short Google,'' Matthews says.

Aficionados of the information age may fear Matthews is spending too much time in the tropical sun. The stock of the most- used Web search engine rose 62 percent this year alone. Clearly, people are making some serious money off Google. And how many companies have seen their name become a verb?

Google comparisons aside, Matthews raises some interesting points about the state of the world's fourth most-populous nation.

The aftermath of the deadly Oct. 1 bombings in Bali hasn't been what their perpetrators might have expected. If the hope of the suicide bombers who killed themselves and 19 other people was to shake confidence in Indonesia's economy, they failed miserably.

Bonds Tell the Story

That Indonesia's stocks are still up nearly 10 percent this year is one sign. A more important one is that Indonesia drew excess demand last week for its biggest overseas debt sale, and that it plans to sell more 30-year bonds in 2006.

If investors viewed Indonesia as a basket case -- which many did following the 2002 Bali bombings and the 2003 attack on the JW Marriott Hotel in Jakarta -- would they really have placed $4.25 billion of orders for the $1.5 billion of 10- and 30-year debt it sold? That demand prompted the government to increase the sale by 20 percent.

While the yields Jakarta is paying are higher than those offered in April, they were at the bottom of the range marketed to fund managers. The demand reflects confidence President Susilo Bambang Yudhoyono is making progress toward reducing Indonesia's budget deficit, protecting currency reserves and attacking corruption.

Subsidy Gamble

Risks indeed abound in Indonesia, an economy whose only real consistency is its ability to confound investors. The place has crushing poverty, terrorist threats and chronic inefficiencies. And those are just the concerns investors focus. Any Asia-wide outbreak of bird flu, for example, could hit Indonesia hard.

Yudhoyono says he's tackling the problems that cost Indonesia the foreign direct investment it needs. Earlier this month, he almost tripled kerosene prices and more than doubled diesel tariffs to cap fuel subsidies and reduce the budget deficit.

While a tricky maneuver for any leader, that's a particularly perilous one in Indonesia. In 1998, the removal of subsidies fueled violent protests that toppled President Suharto. Yet Standard & Poor's on Oct. 3 said Yudhoyono's move was ``encouraging'' and will spur investor confidence.

It's a reminder that in any Google versus Indonesia debate, Asia's No. 7 economy may not be as bad a bet as you think.

To contact the writer of this column:
William Pesek Jr. in Tokyo at wpesek@bloomberg.net and

http://quote.bloomberg.com/apps/news...a3S8S2 OMmWb4

[tata]

hmmm I read this Google thingy somewhere in Indo forum..... *thinking*

[alb3rt]

ya i think i've read that news also
or prob i read another news that talks abt google oso??
dunno

[Alvin]

hmmm I read this Google thingy somewhere in Indo forum..... *thinking*
Yes I posted that article a while ago :)

[Blue_Sky]

Well sorry Alvin
I didnt saw it before

[Alvin]

Is Southeast Asia back on form?
By Jame DiBiasio 08 November 2005
The region is competing better against China and India than the headlines suggest, argues policy wonk.



"Southeast Asia is the comeback kid," says Manu Bhaskaran, senior research fellow at the Institute of Policy Studies in Singapore and a partner at Washington DC-based advisor Centennial Group. Addressing members of the Asia Society in Hong Kong, he says that despite some dire news headlines, the region's political stability and economic restructuring has improved enough to allow it to adapt to competitive challenges from China and India.

"Southeast Asia is not a loser - yet," he says.

Take political risks first. Despite the horrors of the second Bali bombing, Indonesia has been able to isolate terrorist cells, reducing the scale of damage they can achieve. Terrorism will happen anywhere but Indonesian and other regional societies can absorb these shocks.

Indonesia's elections have been peaceable and widely legitimized, and in Indonesia and Malaysia the moderates have consistently defeated Islamists. An important sign of this stability is the failure of riots - much anticipated by the global press - to materialize when Jakarta reduced fuel subsidies. And in Malaysia, Abdullah Badawi is quietly rebuilding institutions such as the judiciary and civil service that were undermined by Mahathir Mohammed for his own political ends.

Bhaskaran is more concerned by Thailand and the Philippines. Thaksin Shinawatra has bungled an ethnic Malay insurgency in the south, blowing up a minor irritant into a running sore that will last a generation. Disgust in the Philippines with the rapacious elite, and that elite's dissatisfaction with Gloria Arroyo, ensures more turmoil, despite her having evaded impeachment for allegedly rigging an election.

The region is showing major positives on the economic front. Cyclically it is benefiting from continuing global GDP growth as an exporter to OECD countries, particularly in the tech sector.

But the real story is restructuring. After the 1997-98 financial crisis and the subsequent tech crash, the region is once again seeing domestic GDP grow and foreign direct investment (FDI) return. "Southeast Asian businesses are competitive and creating new niches," he says.

Southeast Asia has been a winner from China's rise, although individual companies or sectors have been wiped out. FDI to the region has held steady even as China's has grown, and the profitability of Southeast Asian investments is similar to Chinese ones. China's huge current-account surplus with America is mirrored by similarly sized deficits with the rest of Asia, which is shipping raw materials and components to the mainland for final assembly, before goods are exported to America.

As a whole, Southeast Asia has seen new competitive industries arise thanks to political stability and the ability to adjust to the challenges and opportunities of globalization. This is particularly true of its biggest and most important economy, Indonesia, as well as of Malaysia and Singapore, with pockets of success elsewhere. But this assessment takes Southeast Asia as an average; certain countries are really struggling, and all of them still have a long way to go.

Bhaskaran raises two concerns in Southeast Asian economies. First, these countries must respond as China moves up the value chain and produces the components formerly bought from Southeast Asia. Multinational companies' suppliers are already relocating to China.

Second, if liberalization continues in India, it will become a manufacturing competitor at the low end of the scale, in toys and garments for instance, as it already has become in high-end automobile engineering.

Bhaskaran also believes the weak spot in Southeast Asian economies is Indonesia's growing unemployment; lots of idle young men in crowded cities can spell trouble. Corruption is a well-documented concern. The central bank had been too loose with monetary policy and the government was too slow to tackle fuel subsidies, although these failures are being addressed. But the banks have been cleaned up and are starting to lend again, and after years of outflows, FDI is heading back toward positive space, with Philip Morris, British Petroleum and Japanese automobile companies setting up shop.

Other countries are a mixed bag too: Malaysia has no answer to the loss of its manufacturing business to China, but it is finding new oil and gas deposits, and growing its exportable services such as Islamic banking and healthcare. Singapore, after years of imploding property prices and struggling to survive its neighbours' problems, is witnessing a boom in new companies, particularly in construction and in services such as pharmaceuticals, wealth management and oil-related services.

Thailand also has its niches, such as healthcare, auto parts and appliances, and Thaksin has done a good job pumping money into rural areas, although the economy suffers from weak consumption and investment. The Philippines' main economic growth comes from remittances, particularly among its highest earners; its electronics industry has been destroyed, its manufacturing is wasting away and it suffers from high political risk.



© Copyright FinanceAsia.com Ltd
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don't appear on this web site.
To subscribe to FinanceAsia Magazine Click Here

[Blue_Sky]

SPBU ASING- Sebuah stasiun pengisian bahan bakar umum (SPBU) milik perusahaan Shell Indonesia dioperasikan di kawasan Karawaci, Tangerang, Banten, pekan lalu. Shell menjadi perusahaan asing pertama yang terjun dalam penjualan eceran BBM dengan produknya Shell Super (oktan 92) seharga Rp 5.700 per liter dan Shell Super Extra (oktan 95) seharga Rp 5.900 per liter.

JAKARTA - Tahun 2010 Indonesia dikhawatirkan akan menjadi negara importir bahan bakar minyak (BBM) terbesar di Asia. Sebab, defisit atau kekurangan BBM diperkirakan akan mencapai lebih dari 700.000 barel per hari (bph). Kondisi itu, terutama disebabkan masih terbatasnya kapasitas produksi BBM di seluruh kilang Pertamina.

Pengamat perminyakan, Kurtubi, mengatakan di Jakarta, pekan lalu, sekarang pun ketimpangan antara kapasitas produksi seluruh kilang Pertamina dengan kebutuhan BBM di dalam negeri, sudah sangat jauh.

''Jadi kalau sampai lima tahun mendatang Indonesia tidak membangun kilang baru, kondisi akan semakin parah. Impor BBM akan meningkat tajam, karena kebutuhan BBM di dalam negeri semakin tinggi. Sekarang saja, kita sudah harus mengimpor BBM sekitar 25 persen dari total kebutuhan, mengingat kemampuan memproduksi BBM di semua kilang paling banter sekitar 780.000 bph, sedangkan kebutuhan sudah sekitar 1,2 juta bph,'' katanya.

Agar kebutuhan BBM dalam negeri dapat tercukupi, namun volume impor tidak ditambah, menurut Kurtubi, dalam lima tahun ke depan Indonesia harus memiliki setidaknya empat kilang baru dengan kapasitas produksi masing-masing sekitar 200.000 bph.

''Kalaupun kita harus mengimpor, ya cukup impor crude (minyak mentah) saja, jangan impor BBM. Harga minyak mentah memang masih berpotensi naik atau paling tidak bertahan di kisaran 60 dolar AS per barel. Jadi harga produk BBM pasti akan sangat tinggi. Mulai sekarang kita harus mengumandangkan pentingnya swasembada BBM, bukannya terus-menerus mengandalkan dari impor,'' ujarnya mengingatkan.
--------------------------------------------------------------------------
http://www.suarapembaruan.com/News/2...nomi/eko01.htm

[Alvin]

Yudhoyono met Steve Forbes today at the Presidential Palace.
--------------------------------------------------------------------------

Selasa, 08 November 2005, 17:10 WIB
Forbes Yakin Ekonomi Indonesia Membaik Mulai Tahun Depan

Laporan -

JAKARTA, investorindonesia.com

Steve Forbes, pemimpin majalah ekonomi terkenal Forbes Magazine meramalkan kondisi ekonomi Indonesia akan membaik mulai tahun depan dan akan menjadi salah satu kekuatan ekonomi di Asia setelah Cina dan India.

"Jika tidak diganggu oleh berbagai polemik dan bermacam birokrasi, ekonomi Indonesia akan tumbuh secara fantastis di masa datang. Indonesia akan menjadi salah satu negara dengan pertumbuhan paling cepat di dunia," kata Steve Forbes dalam jumpa pers usai bertemu Presiden Susilo Bambang Yudhoyono di Kantor Presiden Jakarta, Selasa.

Menurut Forbes, Presiden Yudhoyono sebagai seorang kepala negara telah mengambil sebuah keputusan yang sulit, namun tepat dari perspekstif ekonomi, yaitu menaikkan harga bahan bakar minyak (BBM) demi untuk mengurangi tekanan terhadap beban negara.

Tingginya angka inflasi yang dialami Indonesia tahun ini menurut Forbes sama sekali tidak disebabkan oleh krisis moneter, tapi akibat kenaikan harga minyak dunia, dan masalah tersebut juga dialami oleh negara lainnya.

"Sebagian penyebab tingginya angka inflasi yang dialami Indonesia adalah akibat kenaikan harga bahan bakar minyak, dan masalah itu terpisah dari masalah inflasi moneter. Masalah minyak adalah masalah dunia, bukan hanya masalah Indonesia," katanya.

Namun Forbes menyatakan keyakinannya bahwa harga minyak dunia akan segera turun dan dengan demikian perekonomian Indonesia juga akan tumbuh dan berkembang lebih baik pada tahun-tahun mendatang.

"Saya kira harga minyak akan turun pada 12 bulan mendatang, sekitar US$ 15 sampai 20 (per barrel, red)," katanya.

Tantangan yang harus dihadapi Bank Indonesia, kata Forbes, adalah menstabilkan nilai tukar rupiah terhadap dolar, dan diyakini krisis ekonomi seperti yang terjadi pada 1997 dan 1998 tidak akan terulang karena semua orang sudah belajar dari pengalaman tersebut.

Lebih jauh Forbes mengatakan bahwa pertemuannya dengan Yudhoyono membahas berbagai masalah, baik yang terkait dengan perkembangan ekonomi, korupsi, UKM, demokrasi, pendidikan serta masalah izin bagi investor asing.

"Tujuan saya bertemu dengan Presiden Yudhoyono adalah untuk mengetahui secara langsung mengenai perkembangan yang terjadi di Indonesia, tidak hanya berdasarkan dari bahan bacaan," kata Forbes.

Untuk masa mendatang, Forbes mengakui bahwa ia berniat untuk menerbitkan majalah pimpinannya dalam versi Bahasa Indonesia karena sejauh ini, majalah tersebut sudah mempunyai edisi bahwa Cina, Korea, Jepang, Arab dan Yahudi. (ant)

[XxRyoChanxX]

Im really hopeful for Indonesia...!!!

[Alvin]

here's that news in english.


Forbes Convinced Indonesia's Economy to Improve Starting Next Year


Jakarta (ANTARA News) - Steve Forbes, the chief of top economic magazine Forbes, has predicted that Indonesia`s economy will improve starting next year and that will become one of economic powers in Asia after China and India.

"If it is not disrupted by various polemics and red tape Indonesia`s economy will grow fantastically in the future. Indonesia will be one of the countries to record the fastest growth rate in the world," he told newsmen after meeting President Susilo Bambang Yudhoyono here on Tuesday.

He said President Yudhoyono as a head of state had made a difficult but correct decision namely increasing the prices of fuel oils to reduce the state`s burden.

He said the high rate of inflation in the country this year was not caused by a monetary crisis but the world`s crude price hike which was also experienced by other countries. "The oil problem is not only the problem of Indonesia but of the whole world," he said.

Forbes believed the price of crude would soon drop and as a result Indonesia`s economy would also grow faster than ever.

"I think the price of crude will decline in the next 12 months by 15 to 20 percent," he said.

He said the challenge Indonesia`s central bank had to face was stabilizing the exchange rate of the country`s currently rupiah.

Forbes was convinced Indonesia would not experience the economic crisis like in 1997 and 1998 because everyone had learned from it.

He said he had discussed various issues linked to economic development during the meeting with President Yudhoyono such as corruption, small and medium businesses, democracy, education and foreign investment permits.

He said he wished to know directly from President Yudhoyono the development in the country.

He said he intended to publish Forbes Magazine in the Indonesian language version. The magazine has already published the magazine in the Chinese, Korean, Japanese, Arab and Jewish language versions. (*)

LKBN ANTARA Copyright © 2005

[MARINHO]

Indonesia is a very very rich country in terms of (young)labour force, natural resources, geographical position (selat Melaka), and in the future indonesia will have sufficient water.

Just wait for political and economical reforms and the Indonesian miracle will be shining again.

[drwho]

State Bank Of India Buys 76% Of Indonesia IndoMonex Bk -2

Dow Jones Newswires

November 07, 2005 05:47 ET


State Bank Of India Buys 76% Of Indonesia's IndoMonex Bk

MUMBAI (Dow Jones)--State Bank of India (500112.BY) Monday said it has bought a 76% stake in Indonesia's PT Bank IndoMonex, an unlisted bank headquartered in Jakarta.

The press release gave no details of the purchase price.

(MORE TO FOLLOW) Dow Jones Newswires

November 07, 2005 06:12 ET

State Bank Of India Buys 76% Of Indonesia IndoMonex Bk -2

SBI Chairman A K Purwar said that the acquisition would give his bank an entry into Indonesia and "increase its footfall in the ASEAN region."

Officials at IndoMonex couldn't be reached for comment.

This will be SBI's third overseas acqisition during the current fiscal after Indian Ocean International Bank of Mauritius and Kenya's Giro Commercial Bank Ltd.

http://sg.biz.yahoo.com/051107/15/3w99d.html

[XxRyoChanxX]

here's that news in english.


Forbes Convinced Indonesia's Economy to Improve Starting Next Year


Jakarta (ANTARA News) - Steve Forbes, the chief of top economic magazine Forbes, has predicted that Indonesia`s economy will improve starting next year and that will become one of economic powers in Asia after China and India.

"If it is not disrupted by various polemics and red tape Indonesia`s economy will grow fantastically in the future. Indonesia will be one of the countries to record the fastest growth rate in the world," he told newsmen after meeting President Susilo Bambang Yudhoyono here on Tuesday.

He said President Yudhoyono as a head of state had made a difficult but correct decision namely increasing the prices of fuel oils to reduce the state`s burden.

He said the high rate of inflation in the country this year was not caused by a monetary crisis but the world`s crude price hike which was also experienced by other countries. "The oil problem is not only the problem of Indonesia but of the whole world," he said.

Forbes believed the price of crude would soon drop and as a result Indonesia`s economy would also grow faster than ever.

"I think the price of crude will decline in the next 12 months by 15 to 20 percent," he said.

He said the challenge Indonesia`s central bank had to face was stabilizing the exchange rate of the country`s currently rupiah.

Forbes was convinced Indonesia would not experience the economic crisis like in 1997 and 1998 because everyone had learned from it.

He said he had discussed various issues linked to economic development during the meeting with President Yudhoyono such as corruption, small and medium businesses, democracy, education and foreign investment permits.

He said he wished to know directly from President Yudhoyono the development in the country.

He said he intended to publish Forbes Magazine in the Indonesian language version. The magazine has already published the magazine in the Chinese, Korean, Japanese, Arab and Jewish language versions. (*)

LKBN ANTARA Copyright © 2005

Im praying for my beloved country!!

[Alvin]

Wednesday November 9, 05:01 PM


Demand For Scooters Climbs 137 PCT In Indonesia

JAKARTA, Nov 9 Asia Pulse - Demand for scooters in Indonesia shot up 137.5 per cent to 123,863 units year-on-year in the first nine months of this year on strong demand for the Yamaha brand.

Data released by the country's largest automotive maker and distributor, PT Astra International, showed Yamaha scooters produced by PT Yamaha Motor Kencana Indonesia dominate scooter sales in the country.

Sales of Yamaha scooters totaled 123,176 units in the January-September period, up 208.9 per cent from the same period last year.

Sales of Taiwan's brand of Kymco, which has also gained popularity in the country, totaled only 8,893 units and those of Italian Piagio, which long dominated the market in the country previously, totaled only 755 units.

(ANTARA)

[Blue_Sky]

'Forbes' may publish Indonesian edition

Forbes magazine, an American business and financial magazine founded in 1917 by BC Forbes, is exploring the possibility of publishing an Indonesian-language edition here.

Malcolm Stevenson "Steve" Forbes Jr., Forbes editor-in-chief, president and chief executive officer of its publisher, Forbes Inc., said on Tuesday that he saw no reasons for the magazine not to expand into Indonesia.

"We are looking forward to having an Indonesian edition of Forbes magazine. We already have a number of local language editions in China, Korea, Japan, Russia, Poland and Turkey," he said after a meeting with President Susilo Bambang Yudhoyono at the presidential office.

He did not elaborate on any expansion plan.

Headquartered at Fifth Avenue in New York City, Forbes magazine has generated several spinoff products, including Forbes FYI, Forbes Asia, Forbes.Com, history magazines American Heritage and American Heritage of Invention & Technology and American Legacy.

Regarding the meeting with President Susilo, Forbes said that it was basically aimed at seeking firsthand information on conditions in Indonesia, specifically on the country's current state of the economy, bureaucracy and legal reform.

"The purpose of our meeting is to get firsthand information on how the President sees the future of Indonesia, not just from reading," said Forbes, who was a candidate in the U.S. presidential primaries in 1996 and 2000. -- JP

[Blue_Sky]

Govt to ink deal with Japan on LNG

Leony Aurora, The Jakarta Post, Jakarta

The government plans to sign the heads of an agreement (HoA) by the end of this month with Japanese buyers to extend an existing liquified natural gas (LNG) supply contract of six million metric tons per annum that expires in 2010.

The pricing formula for the LNG cargoes produced by the LNG plant in Bontang, East Kalimantan, has been agreed upon, said Upstream Oil and Gas Regulatory Agency (BP Migas) chairman Kardaya Warnika on Tuesday.

Prices will be based on the Japanese cocktail crude price, he said, without elaborating.

"The Japanese buyers are also interested in extending the contract of another six million metric tons a year from Bontang," said Kardaya. "We have not made any decisions yet on this request. The gas resources in the area are finite."

Japan, which is Indonesia's largest LNG purchaser, has a contract for 12 million metric tons of the fuel annually from Bontang. The buyers in Japan had previously requested lower prices for the contract extension.

"We are asking for a suitable price, considering that oil prices have stayed above US$40 per barrel," BP Migas deputy of marketing and finance Eddy Purwanto said.

LNG prices have a strong correlation to oil prices.

Indonesia, the world's largest LNG exporter, has been forced to reduce LNG shipments for next year by 10 percent due to lower production from the aging gas fields in East Kalimantan and Nanggroe Aceh Darussalam, where the Arun plant is located.

Buyers in South Korea, Taiwan and Japan have agreed to cut their imports from the Bontang plant by 30 cargoes -- equivalent to 1.8 million metric tons of LNG -- down from the 370 shipments that had been ordered, BP Migas said on Oct. 21.

The agency is also trying to get nine shipments of 75 cargoes contracted from Arun, which is sees declining supply from fields operated by ExxonMobil Oil Indonesia, to be dropped.

The production of Chevron and Vico, which supply PT Badak NGL's plant in Bontang, is also on the decline. The only producer still able to raise production in the area is Total E&P Indonesie, which supplies some 70 percent of the natural gas needed by the plant.

Meanwhile, Eddy said that although PT Pacific Oil & Gas Indonesia had secured a preliminary license to build an LNG plant in Bontang with an annual capacity of 3.5 million metric tons, the plan still required still government approval to go ahead.

"The company will have to get supply from one of the producers," said Eddy. "They (the gas producers in the province) are having trouble already meeting their commitments (to the existing Bontang plant).

"Why should we have an LNG train in (the existing) Bontang plant lying idle while another plant is being built?" he asked.

The government would also take into consideration domestic demand for gas, particularly with given the plan to construct pipelines connecting gas-rich Borneo island to densely-populated Java, as well as state power firm PT Perusahaan Listrik Negara (PLN)'s plan to build an LNG receiving terminal in West Java.

Separately, Pacific Oil & Gas, which is majority owned by Pacific Oil and Gas International Corp., has secured a contract to supply LNG to Jiangshu, China, starting at the end of 2009, Antara news agency reported. PetroChina owns 30 percent of the company, while the Chinese government controls 10 percent of its shares.

[JAG2]

Indonesia is a very very rich country in terms of (young)labour force, natural resources, geographical position (selat Melaka), and in the future indonesia will have sufficient water.

Just wait for political and economical reforms and the Indonesian miracle will be shining again.

I totally agree with you and thanks for your words and opinion.

[Alvin]

Young Indonesian executives fight a business culture of corruption
By Donald Greenlees International Herald Tribune

WEDNESDAY, NOVEMBER 9, 2005


JAKARTA Take a money-losing newspaper, an organ of conservative Islam, and put it in the hands of Erick Tohir, a 35-year-old entrepreneur in a hurry to create a media empire.

The result is an impressive business revival. Within five years, sales of the newspaper, Republika, rose by 70 percent in a highly competitive media market. Ranked by circulation, it leaped to third place from ninth among Indonesian national dailies. From a loss of $1.2 million a year in 2000, it returned to modest profit by 2005.

Tohir is one of a new generation of young Indonesian business executives winning plaudits for acumen in a environment better known for monopolies and corruption than entrepreneurial flair.

Since buying Republika from an Islamic foundation, Tohir and his three business partners have built a company spanning newspapers, magazines, television, radio, advertising and film.

But it is not just sudden business success that makes Tohir stand out. It is his claim to be fighting the corrupt excesses of the Indonesian business world. He is not alone. A new breed of young executives, many the children of Indonesia's old business elite, has returned home in recent years from studies in the United States and Europe espousing a new business-school morality and promising to make changes to a predatory corporate culture.

In fliers plastered to the bathroom walls of Tohir's editorial office, employees are reminded of the importance of practicing "integrity" and "honesty" in their jobs.

Tohir, who obtained a master's degree in business administration from National University in San Diego, said he led by example. He attributed Republika's circulation success to a combination of a new moderate editorial line that appeals to mainstream Muslims and a tough anticorruption stance that resonates with the public. He said he had warned his business partners that the newspaper would not spare them if they were caught doing anything unlawful.

"I cannot hide that kind of thing," Tohir said. "If other newspapers write it, why should my newspaper not write it? Since the beginning, I told my partners or other shareholders that the media business is not only a business. You also have to have public responsibility."

The new business morality has some interesting advocates. Ilham Habibie said he wanted his private holding company - with investments in mining and energy, aerospace, manufacturing, and financial services - to be a "model" enterprise. His father, Bacharuddin Jusuf Habibie, was the third president of Indonesia and part of the inner circle of Suharto during his rule from 1966 to 1998, a time of widespread corruption.

"Through this company, we want to set an example of how business should be done," said Ilham Habibie, 42, who holds a doctorate in aeronautical engineering from the Technical University of Munich and a master's degree in business administration from the University of Chicago. "All the companies that I manage or supervise should work to the highest standard of professionalism."

There are good reasons for the business-school generation to be seen to advocate better corporate governance as they establish their own business reputations and seek the confidence of investors and bankers.

Since the economic crisis of 1997, investors and lenders have been slow to return to many parts of Asia, especially Indonesia. International corruption-monitoring groups, like Transparency International, consistently rate Indonesia as one of the most corrupt countries, an image that further dents the enthusiasm of potential investors.

Michael Backman, a business consultant and author of "Asian Eclipse: Exposing the Dark Side of Business in Asia," said that outside Japan, fund managers still allocated a tiny part of their investment portfolios to Asia and that when they did, they often preferred a few relatively safe spots. Among the reasons for investor wariness is the poor attitude of companies toward corporate governance and weak government regulation.

"As growth has returned to Asia, the desire for reform, and certainly its imperative, has slowed," Backman said.

He added that the generation of young Western-educated business people that has emerged since the economic crisis was making a difference by applying more of a textbook approach to management and investing in new industries. But while this generation shifts out of the textile factories of their parents and into new technology and services businesses, Backman cautioned that the business culture of Asia was likely to be slow to change.

"There will be some new business groups out of these new guys which are very rational and very worthy and demanding of investors' money," he said. "And there will be others who simply use their new skills to raise more capital" outside Indonesia. "It basically equips them to get money and look more presentable to get money, and then to take the money back to Indonesia and follow the practices of the old school."

For Indonesia's future business leaders, the image makeover will not be easy. Anindya Bakrie, 31, who heads Bakrie Telecom and the national television network ANTV, two divisions of Bakrie Group, has to try harder than most. His father, Aburizal, is also coordinating minister for economic affairs. This is the kind of connection that in the old days would have been a license to print money.

In an era of anticorruption drives, Aburizal, who stepped down from the family business when he went into politics, insisted that he was "not going to do any favors for anybody." Likewise, his son, who recently signed up the News Corp. subsidiary STAR TV as an investor in the family television network, said he was annoyed at suggestions that the political connection aids his business.

"It forces me to work harder, work much more carefully, work more diligently, because even if you are doing the right thing, people are going to say you are doing the wrong thing," he said.

Bakrie studied industrial engineering at Northwestern University in Illinois before pursuing a master's degree in business administration at Stanford University in California. Later, he worked as a junior financial analyst at Salomon Smith Barney in New York. His time there ended under a cloud after the U.S. Securities and Exchange Commission filed an insider trading complaint against him in 1998. He returned to Indonesia and, according to SEC documents, was fined $40,000.

Bakrie now says eliminating corruption in Indonesia is vital for the health of the economy and the creation of a competitive business culture. Acknowledging that "there will always be a level of corruption imposed on anybody doing business in Indonesia," he said he had pragmatic reasons for opposing it.

"Corruption to us is a cost to do business," he said. "Just like any other cost, the lesser the better."

Others like Ayu Hakim, 30, who attended Boston College and studied most of her life in the United States, had the high ideals she acquired in her years abroad tested when her father died last year and she returned to Indonesia to help run the family business. The array of family investments includes manufacturing, property and oil trading.

"Trying to stay clean here is absolutely a full-time job," she said.

[bahar]

JAKARTA (XFN-ASIA) - President Susilo Bambang Yudhoyono said the government is planning to implement concerted measures with Bank Indonesia to bring back inflation to single-digit levels by the end of next year.

"I will explain (the details) after we meet with the monetary authority," he told a press briefing. He made the comment following the release of higher-than-expected October inflation data on Nov 1.

October inflation hit 8.7 pct month-on-month and 17.89 pct year-on-year, the biggest increase recorded since 1998. The Central Bureau of Statistics puts the blame for the sharp rise in inflation to the 126 pct fuel price hike carried out on Oct 1 and rising consumption during the Ramadan fasting month.

"We will prepare monetary and fiscal policies in the near future," Yudhoyono said without elaborating further.

So far, Bank Indonesia has responded by hiking its key reference rate, known as the BI rate, by 125 basis points to 125 pct last Nov 1. The BI rate serves as a guide for the benchmark interest rate of Bank Indonesia Certificates (SBI) in the following three months. But at today's auction, the one-month SBI rate rose 125 basis points to match the BI rate at 12.25 pct.


aloysius.bhui@xfn.com

[bahar]

We have to develop our bond market to be as strong as India's :)
-------------------------------------------------------------------------

Indonesia's Pertamina plans $500 mln bonds in 2006

JAKARTA, Nov 9 (Reuters) - Indonesia's state oil company, PT Pertamina, is planning to raise $500 million in bonds next year to finance medium- and long-term projects, its finance director said on Wednesday. However, Alfred Rohimone said that would depend on the results of an audit of the firm, which will start this month. "It is likely that we will issue $500 million in bonds in 2006. We have needs to finance our medium- and long-term projects which cover upstream and downstream operations," Rohimone told reporters.

Pertamina is in charge of the import and distribution of oil products in Indonesia. Its dollar purchases to finance imports have been cited as one factor behind the weakness of the rupiah currency this year.

Production problems and ageing oil wells have made Indonesia a net crude oil importer despite its membership of the Organization of the Petroleum Exporting Countries (OPEC).

[Alvin]

Daihatsu to increase investment by $80 million to 2007, to employ 2200 more workers.
------------------------------------------------------------------


Daihatsu Tambah Investasi US$ 80 juta
Kamis, 10 November 2005 | 14:18 WIB

TEMPO Interaktif, Jakarta:PT Astra Daihatsu Motor akan menambah investasinya di Indonesia sebesar US$ 80 juta sampai tahun 2007. Penambahan investasi ini akan meningkatkan kapasitas produksi menjadi 150 ribu unit per tahun. Saat ini produksi Daihatsu mencapai 78 ribu unit per tahun.

Menteri Perindustrian, Andung A. Nitimiharja mengatakan, investasi ini akan menyerap tenaga kerja sebanyak 2.200 orang, menjadi 6.700 karyawan pada 2007.

Investasi Daihatsu akan dilakukan melalui dua tahap. Pertama, tahun depan mereka akan menginvestasikan US$ 10 juta yang menjadikan produksi mereka mencapai 114 ribu unit per tahun. Tahap ke dua, investasi Daihatsu akan dimulai Desember 2005 dengan investasi US$ 70 juta.

“Investasi ini juga akan menggerakkan supporting industries (industri penunjang) dalam negeri,” ujar Andungx kepada wartawan di ruang kerjanya, Kamis (10/11).

Menurut dia, selain dipasarkan dalam negeri, produksi Daihatsu akan diekspor. Saat ini perusahaan itu telah mengekspor 3.200 unit per bulan ke Malaysia. Dengan tambahan investasi ini direncanakan ekspor menjadi 4.000 – 4.500 unit per bulan.

Selain ke Malaysia, mereka merencanakan ekspor ke Afrika Selatan, Meksiko, dan Filipina. Astra Daihatsu Motor di Indonesia memasarkan mobil dengan produknya, yaitu Xenia, Avanza, dan Zebra. Sutarto

[Zorobabel]

Good for the government...

---

Oil Prices Drop Below $58 Per Barrel
By BRAD FOSS, AP Business Writer

Crude futures fell by more than $1 Thursday, dipping below $58 a barrel, as reports from the U.S. government and an international energy watchdog eased supply concerns.

The federal Energy Information Administration released data that showed natural gas in storage grew more than expected last week, surpassing a level that many analysts believe is necessary to meet winter demand.

Also, the Paris-based International Energy Agency said in a monthly report that global oil demand growth in 2005 would be slightly lower than previously expected.

These reports gave added momentum to already declining energy futures, a trend that traders attribute to warmer-than-usual autumn weather in the U.S. Northeast and Midwest, and some moderation in gasoline demand due to high prices.

"We don't have any big demand right now. Heating is not upon us yet, cooling is behind us and the summer driving season is behind us," said James Cordier, president of Liberty Trading Group in Tampa, Fla. "If you're going to have a soft spot, this is it."

Cordier said technical charts suggest that oil prices could fall to the mid-$50 range, before finding some support. Moreover, he said the downtrend was likely to be stopped in its tracks by late December, assuming normal winter temperatures.

Light sweet crude for December delivery fell $1.23 to $57.70 a barrel in midday trade on the New York Mercantile Exchange, the lowest level for front-month contract in about three and a half months. On Wednesday, oil prices settled at $58.93 a barrel — the lowest close since $58.65 on July 22.

Gasoline slipped by more than 4 cents to $1.5075 a gallon while heating oil fell almost 5 cents to $1.74 a gallon.

Nymex Natural gas futures declined by 43.9 cents to $11.23 per 1,000 cubic feet.

The drop in the price of natural gas futures followed the release of Energy Department data showing that U.S. storage of natural gas grew by 61 billion cubic feet last week, bringing total storage above 3.2 trillion cubic feet — a level many analysts consider a crucial measure of adequate pre-winter supply.

The IEA lowered its forecast for global oil demand growth in 2005 by 70,000 barrels a day to 1.2 million barrels per day. The agency also said that
OPEC's production capacity could rise by 1.2 million barrels per day to 33 million barrels per day by the end of next year.

On Wednesday, the federal Energy Information Administration said crude-oil inventories rose 4.5 million barrels to 323.6 million barrels in the week ended Nov. 4 from a week earlier. Crude stocks are about 13 percent higher than they were a year ago.

With energy prices falling despite the continued loss of output of oil, natural gas and gasoline in the aftermath of hurricanes Katrina and Rita, Cordier said it is a clear indication that the market is being driven by a dropoff in demand.

He added that demand should pick up again later in the year, assuming normal winter weather patterns.

[XxRyoChanxX]

good for them!

[Blue_Sky]

Sumitomo plans power, mining sector expansion

Rendi A. Witular, The Jakarta Post, Jakarta

Sumitomo Corporation, one of Japan's oldest and leading business icon's, is set to expand its power, mining and transportation businesses in Indonesia, on the back of abundant resources and fairly stable political and security conditions.

The company's president and chief executive officer, Motoyuki Oka, said on Thursday that with some US$3.5 billion already invested in Indonesia over the past 50 years, Sumitomo was seeking to expand further and tap more business opportunities here.

"Indonesia is an important country for Sumitomo, and we will expand our business here," said Motoyuki after meeting with President Susilo Bambang Yudhoyono to discuss the company's investment plan.

"We are discussing with the President possible projects in the power sector based on geothermal, coal and natural gas resources. We are also discussing projects in the mining and transportation sector," he said.

Motoyuki refused to disclose the details of the company's investment plan. However, based on the company's written report to Susilo, it is planning to invest between $2 billion and $3 billion to expand its copper production in the Elang field in Sumbawa, West Nusa Tenggara.

It is also planning to construct a 14.3-kilometer mass railway system in Jakarta, which would be supported by the Japanese government under the Official Development Assistance (ODA) program.

The system, which would link areas in Lebak Bulus, Blok M, Setiabudi and Dukuh Atas, is expected to cost some $700 million.

In the power sector, Sumitomo is preparing to construct several geothermal power plants in Java and Sumatra with a capacity of between 40 megawatts (MW) and 110 MW.

It is also planning to expand the capacity of the Tanjung Jati B power plants by adding another two units of coal-fired plants with a capacity of 660 MW each.

The company is also looking into the possibility of acquiring an existing gas-fired plant in West Java with a capacity of 720 MW, as well as constructing an additional one with a capacity of between 750 MW and 1,000 MW. However, the company did not disclose the amount of its investment for the power projects.

Aside from the investment plans, the company is also seeking an opportunity to extend its contract with the government on the purchase of liquefied natural gas (LNG) from the Bontang field in East Kalimantan to be exported to Japan and South Korea.

"The meeting between Sumitomo and President Susilo was not only a discussion about investment plans, but also about the company's interest in extending its LNG export contract," said Minister of Energy and Mineral Resources Purnomo Yusgiantoro.

Purnomo said the contract, which allows Sumitomo to ship some 12 million metric tons of LNG annually, will expire in 2010.

The history of Sumitomo dates back to Masatomo Sumitomo (1585 - 1652), who opened a successful book and medicine shop in Kyoto in the 17th century before expanding to other field of business.

[Alvin]

Project delays push down 2005 budget deficit
Urip Hudiono, The Jakarta Post/Jakarta

The government is expecting a narrower deficit for this year's state budget, a finance ministry official says, with delays in some development projects putting the brakes on spending amid higher-than-expected revenues.

The Ministry of Finance's Director General of the Treasury, Mulia P. Nasution, said on Friday this year's budget deficit may amount to only 0.5 percent of the gross domestic product (GDP), instead of the targeted 0.9 percent -- or Rp 23.2 trillion (some US$2.3 billion).

"Although government spending is expected to rise within this year's last two months, some of it will be carried over to next year," Mulia said.

"State revenues from taxation for this year will likely be higher as well, so we are expecting a lower deficit -- hopefully under 0.5 percent (of the GDP)."

Government expenditures that will likely be unrealized and carried over to next year, Mulia added, included several post-tsunami reconstruction projects in Aceh, as well as several education, health and rural infrastructure development projects the government had planned for this year as a way to mitigate the impact on the poor for this year's fuel price hikes.

"There are also several government procurement projects whose contracts have recently been signed, but which will only be completed by April next year," he added.

With the economy still relying on government spending, a lower deficit from unrealized government expenditures could also hamper growth, as shown in this year's first and second quarter year-on-year growth of only 6.35 percent and 5.54 percent, respectively, as compared to an average of more than 6.5 percent during the same periods last year.

Mulia did not mention the total value of the delayed projects, pending their exact financial details from related ministries and state agencies.

The total funds allocated this year for the post-tsunami reconstruction projects in Aceh amounted to some Rp 10 trillion, while the infrastructure projects nationwide was around Rp 20 trillion.

Last year, the budget deficit amounted to Rp 23.8 trillion, the government's official budgetary report stated, which is lower than the Rp 26.3 trillion -- or 1.3 percent of the GDP -- as previously expected.

For 2006, the government is expecting a budget deficit of Rp 22.4 trillion, or 0.7 percent of the GDP.

"The budget deficit for next year until 2009 will be different than this year, as we are prepared to widen it to stimulate higher economic growth and create more jobs," Mulia said.

"We will also improve the efficiency of ministries and state agencies so they will be allocated on time."

This year's lower-than-expected deficit may come as an irony, as the government had previously mentioned how the deficit could reach 1.3 percent of the GDP, as one of its arguments to cut the fuel subsidy costs -- which were multiply rapidly due to surging oil prices -- thereby increasing domestic fuel prices in the name of fiscal sustainability.

[Alvin]

RI economic to post less robust growth, say analysts
The Jakarta Post, Jakarta

With both inflation and interest rates on the rise, Indonesia's economy is forecast to wrap up the year with lower-than-expected growth, analysts say, as consumption slows amid still-weak exports and investment.

In its latest assessment on the economies of Southeast Asia, global investment bank Morgan Stanley revised downwards its outlook for Indonesia's economy, estimating that the country's gross domestic product (GDP) would likely grow by only 5.3 percent this year.

The New York-based bank even sees Southeast Asia's largest economy growing even slower in 2006 -- at only 5.2 percent, lower than the government's official 6.2 percent forecast and less than analysts' consensus of 5.7 percent.

By comparison, Morgan Stanley revised upwards its forecast for Singapore, to 4.7 percent this year and 4.9 percent next year, and also Thailand, to 4.6 percent and 5.4 percent, on the two's stronger exports.

"The Indonesian economy is clearly decelerating from the hectic 6.7 percent pace of 2004's final quarter, and we suspect it will decelerate to about 4.7 percent in the second half of 2005," said economist Daniel Lian, who co-authored the bank's outlook update with Deyi Tan.

"However, respectable growth of 5.9 percent in the first half of 2005 means only a slight decrease to a full-year's growth forecast to 5.3 percent from 5.4 percent."

Indeed, several economists, as well as the central bank and government officials have already estimated that this year's growth would slow to below the previously expected 6 percent, as Indonesia's main economic engine of domestic consumption gets cut back as a result of fuel price hikes and rising inflation, which in October had reached 17.89 percent year-on-year.

Businesses also face a slowdown as Bank Indonesia was forced to hike its key interest rates to 12.25 percent in order to contain inflation and support the rupiah.

Rival investment bank Standard Chartered sees Indonesia's economy of slowing to 5.5 percent for this year, although they sat it will pick up slightly next year to 5.7 percent.

The Central Statistics Agency (BPS) is expected to announce Indonesia's third quarter growth sometime this week.

Morgan Stanley pointed out that year-on-year retail sales growth had decelerated to 10.9 percent in the third quarter, from 26.9 percent in the second quarter, as consumer confidence slipped on rising inflation.

Indonesia's trade balance also edged down, with third quarter exports growing by only 10 percent from 24.3 percent in the second quarter, while imports continued to surge at 21.9 percent, on pricier oil and inflation.

On Indonesia's investment prospects, Morgan Stanley was particularly concerned about the risks still hampering capital formation in the country.

"We are not a big believer of the structural investment revival story. Indonesia, unlike Thailand, lacks essential fiscal latitude to support proactive financing and lead investment in its infrastructure plans," Lian said.

"We think the largely merger and acquisition-led foreign direct investments, with no real productive capacity expansion, may dwindle in the future."

However, Morgan Stanley said consumption and trade may improve next year, as the current inflationary impacts from the fuel price hikes mellow, supported by increased government expenditure and a more stable rupiah, in addition to a moderate increase in investment.

[Zorobabel]

I just realized another problem with the weak rupiah is derived from the fact that foreign tourist earnings are the largest source of foreign exchange for Indonesia. So, tourist arrivals are flat (and contracting slightly), while imports are increasing significantly. If Indonesia could ensure security and encourage tourist arrivals again it would be very good news for Indonesia's fiscal situation.

[bahar]

Do you mean Indonesia's export value is less than tourism income? Or Tourism is the largest component of Indonesia's "export"?

[MARINHO]

Well investor confidence will come.... After neglectance by the Orde Baru and following post-Soeharto cabinets the BBM prices are finally increased. This will help the situation and financial stability will take place in the future.

For the moment and near future massive tourists moments are not expected. Due to 'terrorism' and soaring oil prices ticket prices will increase which will led to a decrease in international travel, people will choose to go to regional destinations.

Indonesia can lure tourists back by launching a massive tourism campaign, (CNN-, BBC advertisements) like Malaysia did.
IMO Indonesia has to start a government driven marketing campaign.
As part of the campaign they should reopen flights to Europe, USA.
(BTW The flight operation into Amsterdam was ceased november last because a Garuda employer based in the Netherlands had stolen a large amount of money).

IMO Indonesia should be less dependent from Foreign Exchange and on tourism. As long as the battle on terrorism continues the tourism market is too fragile for changes.

Manufacturing is important together with services including: air transportation, watertransportation and landtransportation. This should be dominated by Indonesian companies not foreign companies.

[Zorobabel]

Do you mean Indonesia's export value is less than tourism income? Or Tourism is the largest component of Indonesia's "export"?
Not exactly. It means that when Indonesia trades internationally they buy and sell in US dollars. Thus, the Indonesian government, exporters, and importers have to exchange rupiah for dollars. When foreign tourists arrived they are often carrying large amounts of US dollars or other currencies. They exchange their money into rupiah, which means that foreign tourism is a massive source of foreign exchange for many countries. So, Indonesia's international trade has been increasing and especially with oil imports they've had to exchange large amounts of rupiah into dollars to buy in the international marketplace while foreign exchange earnings from tourism have contracted slightly this year. Because of this, the rupiah faced a "mini-crisis" earlier this year, and the Indonesian central bank had to pour about $6 billion from forex reserves into stablizing the rupiah.

[sanhen]

Beside tourist, Indonesia have plenty of people working overseas that will buy rupiah when they send money back home.

[David-80]

I just realized another problem with the weak rupiah is derived from the fact that foreign tourist earnings are the largest source of foreign exchange for Indonesia. So, tourist arrivals are flat (and contracting slightly), while imports are increasing significantly. If Indonesia could ensure security and encourage tourist arrivals again it would be very good news for Indonesia's fiscal situation.

I dont think its the largest, maybe one of the largest forex income is the correct sentence. Exports and money from overseas workers are still one of the largest forex income. Indonesian exports value is still higher than tourism industry value in term of US dollar. Most exporters in Indonesia are still using US dollar for trading. Now with trade surplus currently reaching double digit number, i think the tourism industry still contributed less than exports for the forex industry.

cheers

[bahar]

That's exactly what I tought.

[Zorobabel]

You are correct. I don't know why I was thinking it was the largest. Nonetheless, what I said stands, and we have seen how all these things combined impacted the currency.

---

Indonesia agency says delays Q3 GDP data release
JAKARTA, Nov 15 (Reuters) - Indonesia's statistics agency will not announce third quarter GDP data on Tuesday as expected, an official at the agency said.

The official did not say when the data would be released and did not give a reason for the delay. However, Indonesian government departments only resumed operation last week after a long holiday to mark the end of the Muslim fasting month of Ramadan.

A survey of 11 analysts showed a median estimate of 5.0 percent economic growth in Southeast Asia's largest economy in the third quarter from the year-ago period, compared with 5.5 percent growth in the second quarter and lower than a central bank forecast of 5.2 percent to 5.7 percent.

[sanhen]

Hmmm.. so anyone know how much are those income stream in term of percentage?

[Alvin]

Tuesday November 15, 6:40 PM
PREVIEW: Indonesia's GDP Likely Up 5.1% On Year In 3Q By Phelim Kyne
Of DOW JONES NEWSWIRES

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JAKARTA (Dow Jones)--Indonesia's economic growth likely eased slightly year on year in the third quarter due to a shortfall in investment and a slowdown in private consumption.

Five economists polled by Dow Jones Newswires forecast gross domestic product in the July-September period to have expanded an average 5.12% on year, slower than the second quarter's 5.54% pace as private consumption slumped from the combined impact of an average 29% rise in fuel prices in March and a failure of projected investment to materialize.

The forecast is a little lower than what Bank Indonesia is expecting. The central bank recently said the economy likely expanded 5.2% to 5.7% on year in the last three months.

In the same quarter a year ago, GDP rose 5.0% on year.

The economists also forecast an average 2.84% quarter-on-quarter growth for the quarter, faster than the second quarter's 1.01% expansion. Economists though mostly look at the year-on-year number.

The official Central Statistics Agency is expected to announce Indonesia's third quarter GDP data some time next week.

"The GDP (likely) slowed down because of investment ....which wasn't realized as expected," said Mandiri Sekuritas economist Winang Budoyo.

"Private consumption fell due to weakening purchasing power following fuel prices hikes in March."

Foreign direct investment has risen sharply this year due to what analysts say is renewed interest in Indonesia under the stewardship of President Susilo Bambang Yudhoyono, who won a landslide election in September 2004.

Approved FDI rose to $10.33 billion in the first nine months of 2005 from $8.33 billion in the same period last year. Actual FDI soared to $7.64 billion from $2.94 billion in the same period.

Yudhoyono has vowed to boost foreign direct investment, which shrank 26% to $10.3 billion in 2004, by fighting graft and bureaucratic delays.

But analysts say that approved FDI has not grown as much as expected because the government has been slow to tender a series of massive infrastructure projects which were announced earlier this year.

3Q GDP Growth Forecasts
On Year On Quarter
Danareksa Research Institute 5.00% 2.90%
Mandiri Sekuritas 4.92% 2.75%
DBS 5.10% 2.90%
Ideaglobal 5.60% NA
CIMB-GK Research 5.00% 2.80%
Average 5.12% 2.84%
2Q 2005 GDP: up 5.94% on year; up 1.01% on quarter
3Q 2004 GDP: up 5.00% on year; up 3.10% on quarter
-By Phelim Kyne; Dow Jones Newswires; 62-21 39831277; Phelim.Kyne@dowjones.com
-Edited by Mui Khi Lim

[macgyver]

http://www.boston.com/news/world/asia/articles/2005/11/15/indonesia_threatens_to_seize_oil_field/

November 15, 2005

JAKARTA (Reuters) - Indonesia threatened on Tuesday to take over the $2 billion Cepu oil block unless Exxon Mobil Corp. <XOM.N> and state oil firm Pertamina resolve a row by the end of the year over who will operate the resource-rich field.
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"If there is not an agreement, then we can take it over and give it to someone else," chief economics minister Aburizal Bakrie told reporters in comments overshadowing one of Exxon's 10 biggest global undeveloped projects.

"We hope that at the latest, this is resolved by the end of the year."

The row centers over who will operate the field on Java island.

Pertamina has said it wanted the role of operator to be rotated among the two entities but says Exxon rejects this.

The disagreement is holding up follow-through on the closely watched deal, which the government signed in September with Pertamina and Exxon, to develop the block for 30 years.

Cepu, which Jakarta estimates could hold more than 500 million barrels of recoverable oil and produce up to 180,000 barrels per day, could boost waning production by Asia's only OPEC member by 20 percent.

Separately, State Enterprises Minister Sugiharto said there was still time to negotiate, reiterating the government wanted the parties to jointly operate the field.

"Drafting on the legal aspects has to be in-depth. In business, this is normal," he said.

A final agreement on key issues such as the production split and share interests was reached in September with active government involvement but until now Jakarta had appeared to have stepped aside from the current negotiations.

Pertamina and Exxon hold equal 45 percent stakes in Cepu, with the remaining 10 percent going to the regional government.

The government has projected Cepu would begin production in 2008 after an estimated $2 billion in investment, but that date may be pushed back if negotiations drag on.

Under a previous scheme, Exxon Mobil was operator of the block under a technical assistance contract with Pertamina that expires in 2010, and has been negotiating for four years to extend the contract and begin development.
© Copyright 2005 Reuters. Reuters content is the intellectual property of Reuters or its third-party content providers. Any copying, republication, or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters.

[macgyver]

http://sg.biz.yahoo.com/051115/15/3wiib.html

Tuesday November 15, 5:17 PM
Indonesia Toyota Astra Sees Car Industry '06 Sales Dn 21%

JAKARTA (Dow Jones)--Indonesia-based car manufacturer PT Toyota Astra Motor, or TAM, Monday said total industry domestic car sales next year could fall by up to 21% to 420,000 units from an expected 510,000-530,000 units this year due mostly to the high interest rate outlook.

"The high interest rate and inflation rate could hurt car sales next year," TAM President Johnny Darmawan told reporters Tuesday.

ADVERTISEMENT
TAM is 95% owned by Toyota Motor Corp. (TM) and 5% by PT Astra International (ASII.JK).

Darmawan said he expects his company to maintain a market share of above 30% of total domestic car sales this year. He refused to forecast TAM's market share for next year.

The Indonesian automotive industry had initially targeted car sales this year to rise to 550,000 from 483,295 units sold in 2004.

The central bank early this month hiked its benchmark Bank Indonesia Rate to 12.25% from 11% to stem rising inflation. The Central Bureau of Statistics recently announced that annual inflation in October jumped to 17.89% after the government more than doubled fuel prices.

Analysts said the high interest rate, which is expected to continue to rise in coming months, could prevent people from buying cars through bank loans.

TAM's Darmawan, however, said that if inflation and interest rates stabilize, domestic car sales next year could be flat at 530,000 units.

By Esther Fin Harini; Dow Jones Newswires; 62-21- 3983 1277; djn.jakarta@dowjones.com

-Edited by Alan Soughley

[macgyver]

http://news.xinhuanet.com/english/2005-11/15/content_3784529.htm

JAKARTA, Nov. 15 (Xinhuanet) -- Entrepreneurs from Indonesia and China signed 23 agreements on joint projects worth 800 million US dollars during the Indonesia-China investment forum held here Tuesday.

The deals cover projects of various sectors, including information technology, fishery, mining and electricity.

The forum was attended by around 500 business-people from China's southern province of Guangdong. Also present in the signing ceremony were Indonesian Minister of Industry Andung Nitimihardja, Indonesian Chamber of Commerce and Industry (Kadin) chairman Mohamad Hidayat and Chinese Ambassador to Indonesia Lan Lijun.

On the occasion, Minister Andung called on Chinese investors to set aside doubts in investing in Indonesia, which now is doing its utmost to improve the business climate.

"Indonesia today is among Asia's fastest growth after China and India," the minister said.

The Indonesian government, he said, is working very hard to issue pro-business policies and combat corruption in a bid to lure foreign investment.

One of the projects signed Tuesday is the power plant project in East Kalimantan worth 23 million dollars to be jointly built by PT Samapta Energi Nusantara and Guangdong Machinery IMP Co Ltd. Enditem

[Blue_Sky]

Tax laws still complicated, have grey areas: Analysts

Urip Hudiono, The Jakarta Post, Jakarta

Indonesia will miss the opportunity to attain a tax-based economy if it fails to address the main problems of complicated tax laws and tax officials with questionable integrity, analysts say.

"The devil is in the details, in the fine print of the tax laws," economist Faisal Basri of the University of Indonesia said at a seminar on tax reform on Tuesday.

"Gray areas of tax law articles, which are still open to interpretation, should be reduced. Any planned tax reform should not be patchwork but total reform, including of the tax office," he added.

Rosediana Suharto, a business association representative, gave an example of one gray area, in which agricultural products exempt from value-added tax (VAT) were vaguely defined as "crops which are directly harvested", leading to different interpretation by tax officials.

"If latex is directly collected but immediately treated for better storage, is it then subject to tax?" she asked.

It was only after the Ministry of Agriculture submitted a more specific definition for the draft tax law amendments that the matter was made clear.

The government submitted to the House of Representatives the revision to the laws on general taxation arrangements and procedures, income tax and VAT for deliberation, which will be the third major tax reform since 1983, if approved.

The government expects to rake in Rp 416.3 trillion (US$41.63 billion) in tax revenue next year, up from Rp 351.9 trillion this year. It also aims to raise the tax base to 19 percent by 2009, from some 13 percent at present.

With only some three million taxpayers, Faisal acknowledged the need for a larger tax base for a better economy, but understood the public's reluctance to comply.

"Taxpayers' expectations are actually simple: that tax regulations be clear and tax rates competitive. If these are fulfilled, then the tax base, tax revenue and the business climate will improve, attracting more investment," he said.

A recent World Bank survey shows that businesses in Indonesia spend more than twice as much time on tax matters and make twice the number of tax payments than the Asian average. They also pay an effective rate of 38.8 percent as compared to the region's 31.2 percent average.

"No wonder many don't want to get more of a headache by dealing with taxes. There is also a lack of incentive-based persuasion in tax reform, and instead more draconian power is being given to the tax office," Faisal said.

Concerning calls to include an amnesty for tax evaders to encourage them to register as taxpayers, chairman of the House's finance commission and deliberation team, Paskah Suzetta, said the House would give the government until the end of November to submit such addenda.

"If by then the government has not submitted any, the House can use its initiative," he said.

Faisal, however, warned the lawmakers to avoid creating a possibility for the tax amnesty to be taken advantage of, which would jeopardize the whole essence of tax reform. "It should firmly remain what it is called: a tax amnesty, not a corruption amnesty."

[Blue_Sky]

Companies must have gas stations outside Java to partake in PSO

Leony Aurora, The Jakarta Post, Jakarta

New players in the downstream oil business will not be allowed to distribute subsidized fuel if they do not operate gas stations outside Java, which could give state oil and gas firm PT Pertamina a de facto monopoly after the sector is liberalized.

No plans for gas stations outside Java have been submitted by players such as Royal Dutch Shell Plc. or Malaysia's Petronas, which appear to be the most prepared to take part in the retail sector, the chairman of the Downstream Oil and Gas Regulatory Agency, Tubagus Haryono, said on Tuesday.

"We will not let (new players) supply subsidized fuel only in Java," he said, adding that they appeared to be technically unprepared to participate in the public service obligation (PSO) by next year.

"If they are not ready, we will appoint Pertamina to distribute the fuel," said Tubagus.

Under Law No. 22/2001 on the oil and gas industry, Pertamina will no longer hold a monopoly on the distribution of fuel beginning on Jan. 1, 2006.

The government will divide the country into four trading zones: the first zone is Java and Bali; the second is Sumatra; the third is Kalimantan, Sulawesi, Maluku and Papua; and the fourth is West and East Nusa Tenggara.

Each province will be designated as a developed, less-developed or underdeveloped area. A company that wants to distribute subsidized fuel in a developed area, like Java, which consumes larger volumes of fuel, will be required to build and operate gas stations in underdeveloped areas, such as Papua.

Shell was the first new player to enter the market, opening a retail outlet that sells unregulated high-octane premium gasoline on Oct. 30 in Karawaci, west of Jakarta.

Subsidized-fuel distribution, however, is considered much more lucrative, accounting for up to 95 percent of total fuel consumption here.

Shell Indonesia's vice president for external and business affairs, Wally Saleh, said the company was waiting to see the PSO regulation.

"We hope to participate in the PSO as soon as possible. Let's see how the regulation is," he said, declining to comment if Shell wad ready to operate outside of Java.

The Ministry of Energy and Mineral Resources is scheduled to submit a draft of the PSO concept to the President this week. The draft is expected to be signed before Nov. 23.

Tubagus said new players might want to cooperate with existing private gas stations outside of Java -- Pertamina owns only a few dozen of the some 2,600 gas stations spread across the archipelago -- to speed up their retail development.

He quickly added, however, that most stations already had long-term contracts of between 10 years and 30 years with Pertamina.

[Blue_Sky]

Sungguh mengejutkan! Meski banyak dikeluhkan karena buruknya pelayanan, namun ternyata berdasarkan survei yang dilakukan Bank Dunia, pelayanan pajak Indonesia merupakan yang terbaik dari 23 negara.

Untuk urusan sogok menyogok pajak, dari 43 negara yang disurvei Bank Dunia, Indonesia menempati urutan ke-9. Survei Bank Dunia itu merupakan bagian dari laporan Bank Dunia No. 31708 yang dipublikasikan tanggal 24 Februari 2005.

Hasil survei itu dengan bangga disajikan oleh Menkeu Jusuf Anwar dalam rapat dengar pendapat mengenai RUU Perpajakan dengan DPD di Gedung Nusantara IV, Kompleks DPR/MPR, Senayan, Jakarta, Rabu (16/11/2005).

"Itu dibaca dong sebelum ada komentar. Jadi jangan diambil yang buruknya saja, kenapa kita harus memperburuk muka sendiri kalau orang lain mengatakan bagus. Yang saya sampaikan di sini is the truth and nothing but the truth," ujar Jusuf dengan yakin.

Ia menegaskan, dirinya tidak berbohong mengenai survei ini mengingat pajak adalah masalah krusial karena peranan straegisnya dalam pembangunan negara.

Untuk meyakinkan anggota DPD, Dirjen Pajak Hadi Poernomo pun membagikan hasil survei Bank Dunia itu kepada para anggota DPD.

Dalam hal pajak terutang, dari hasil survei 154 negara, Indonesia menempati peringkat 53. Untuk tarif pajak, dari 51 negara, Indonesia menempati peringkat ke-17.

"Itu bagus, tapi belum puas. Maunya sih semuanya nomor satu. Insya Allah, tapi kita harus menjadi trendsetter," ujar Jusuf.

Namun menurut Jusuf, Indonesia menempati peringkat yang kurang baik dalam hal waktu pengajuan pajak. Dari 155 negara, Indonesia menduduki peringkat ke 118 yakni 560 jam.

Bank Dunia menilai, sistem perpajakan Indonesia sudah modern terutama di bidang pajak penghasilan (PPh) dan pajak pertambahan nilai (PPN).

"Kita sedang membangun large tax office (LTO) dan medium tax office (MTO). Di situ peringkat yang dimilikinya sangat canggih yang dibantu oleh IMF. Jadi kalau kita berprestasi akui saja. Kalau kita buruk pun akui saja," ujar Jusuf.



....sungguh-sungguh mengejutkaaan...... :runaway:

[Blue_Sky]

Jakarta - Asian Development Bank (ADB) mengkategorikan 3 hal utama yang menjadi hambatan bagi peningkatan investasi di Indonesia. Hambatan itu adalah ketidakstabilan ekonomi makro, ketidakpastian kebijakan ekonomi dan regulasi serta masalah korupsi.

Penilaian ADB ini muncul setelah dilakukan penelitian terhadap 700 perusahaan menengah dan besar di 11 provinsi. Lembaga asing memang kerap melakukan penelitian ekonomi di Indonesia.

Peneliti ekonomi ADB Guntur Sugiyarto dalam konferensi persnya di Hotel Borobudur, Jl Lapangan Banteng, Jakarta Pusat, menyatakan, hasil survei iklim investasi di Indonesia menyebutkan korupsi di level nasional mencapai 4,6 persen dari total omset perusahaan. "Di level kota, korupsi sebesar 4,8 persen dari total omset," ungkapnya.

Selain persoalan di atas, masih ada juga masalah lainnya. Masalah itu seperti ketenagakerjaan, perpajakan, keuangan dan infrastruktur. Masalah lain yang tak kalah pentingnya adalah dampak negatif desentralisasi. Pelaksanaan desentralisasi telah memperburuk iklim investasi dan makin menambah ketidakpastian kebijakan ekonomi.

Jika dilihat dari perbandingan besarnya usaha, maka hambatan yang paling besar dialami oleh
perusahaan besar, asing dan eksportir. Sedangkan berdasar wilayahnya, menunjukkan perusahaan di Jakarta mengalami masalah infrastruktur dan korupsi yang lebih besar. Tapi di luar Jakarta, korupsi lebih sedikit tetapi masih menghadapi masalah birokrasi.

Pajak di Indonesia juga termasuk tinggi, sementara biaya dan akses keuangan semakin sulit menyebabkan banyak perusahaan lebih mengandalkan pembiayaan sendiri daripada pinjam bank. Peraturan ketenagakerjaan tentang memperkerjakan dan memberhentikan pekerja serta upah minimum juga masih memberatkan pengusaha.

Direktur Perwakilan ADB Indonesia David Green menyatakan, akhir-akhir ini Indonesia stabil dalam makro ekonomi. "Tapi belum ada peningkatan investasi. Malah sempat tidak pernah ada investasi. Investasi lalu kembali namun masalahnya masih dalam skala small boom," katanya.

detikfinance (http://jkt2.detikfinance.com/index.php/detik.read/tahun/2005/bulan/11/tgl/16/time/154240/idnews/479518/idkanal/4)

korupsi lagi , korupsi lagi :D :D

[Blue_Sky]

Jakarta - Perkembangan iklim investasi di Indonesia saat ini dinilai masih tidak lebih baik dari tahun-tahun sebelumnya. Persoalan klasik seperti rumitnya birokrasi, ketidakpastian hukum dan inefisiensi menjadi persoalan yang menakutkan investor di Indonesia.

Berdasarkan hasil penelitian dan survei dari Foreign Investment Advisory and Search (FIAS), untuk berinvestasi di Indonesia membutuhkan 12 prosedur yang harus dilewati selama 161 hari untuk perizinan serta biaya registrasi yang sekitar 120 persen lebih mahal dari negara lain.

"Ini adalah data yang menakutkan. Akan tetapi sudah ada hal baik yakni adanya komitmen dari pemimpin negara ini untuk menciptakan iklim investasi yang lebih baik," kata ekonom senior FIAS Russel Muir di sela acara seminar Improving Indonesia Investment Climate di Hotel Shangri-La, Jakarta, Rabu (16/11/2005).

Menurut Muir, Indonesia saat ini paling tidak memerlukan reformasi di bidang birokrasi yang radikal untuk memotong jalur-jalur birokrasi yang menghambat seperti masalah waktu perizinan.

Dicontohkan, untuk mendapatkan sebuah kontrak di Indonesia memerlukan 570 hari yang menjadi waktu tunggu ketika kontrak atau proyek tersebut dilaksanakan. Ini sangat berbeda dengan yang ada di Turki selama 27 hari dan Singapura yang hanya 20 hari.

Selain itu, kebanyakan waktu para investor di Indonesia dihabiskan untuk melakukan hal-hal yang tidak produktif dengan pertemuan pejabat negara atau kegiatan laiannya yang tidak ada hubungannya dengan investasi.

Meski pemerintah Indonesia dinilai sudah cukup baik dengan membentuk lembaga atau kelompok kerja di bawah Menko Perekonomian yang diharapkan bisa meningkatkan investasi, namun sangat disayangkan cara kerjanya.

Pasalnya, kelompok kerja ini tidak melibatkan menteri-menteri yang mempunyai kaitan langsung dengan faktor-faktor yang menghambat investasi seperti masalah kepastian hukum.

Tidak Efisien

Sementara itu Chief Economic Poverty Reduction and Economic Management East Asia and Pacific Region Bank Dunia, Homi Kharas, menyoroti masalah ketidakefisienan proses investasi di Indonesia.

Menurut Kharas, beberapa masalah besar yang harus dilakukan oleh pemerintah saat ini adalah memotong jalur birokrasi yang menghambat.

Indonesia juga dinilai tidak lebih baik dari Filipina dalam hal birokrasi ini. Namun jika dibandingkan dengan Kamboja, masih lebih bagus.

"Tapi seharusnya bukan sebagai ukuran karena kondisi sosial politik Kamboja yang buruk saat ini," kata Khares.

Sedangkan dalam biaya registrasi, Indonesia sangat buruk dibandingkan negara-negara Asia lainnya. Misalnya biaya registrasi mendirikan bangunan Indonesia adalah yang paling mahal dibandingkan Vietnam, Thailand, Filipina, Kamboja, Cina dan Korea.

"Yang harus menjadi sorotan juga adalah resistensi yang kuat dari birokrasi terhadap investor, sikap yang tidak produktif seperti budaya suap menyuap, korupsi dan hal negatif lainnya, masih menjadi kesempatan bagi para birokrat tersebut mencari keuntungan," papar Khares.

Bank Dunia juga telah melakukan penilaian terhadap kinerja pemerintah Indonesia dalam hal investasi dengan melakukan survei kepada para investor. Hasil penilaian tersebut menunjukkan kondisi Indonesia seperti stabilitas makro ekonomi, politik, regulasi dan perpajakan, keuangan, SDM, serta sarana dan prasarana, masih di bawah negara-negara Asia lainnya seperti Malaysia dan Filipina.

"Kebanyakan investor ragu-ragu karena ketidakpastian hukum dan politik di Indonesia dan belum lagi masalah-masalah eksternal lainnya seperti terorisme," tutur Khares. (ir)

detik (http://www.detik.com)

[bahar]

Sungguh mengejutkan! Meski banyak dikeluhkan karena buruknya pelayanan, namun ternyata berdasarkan survei yang dilakukan Bank Dunia, pelayanan pajak Indonesia merupakan yang terbaik dari 23 negara.

Untuk urusan sogok menyogok pajak, dari 43 negara yang disurvei Bank Dunia, Indonesia menempati urutan ke-9. Survei Bank Dunia itu merupakan bagian dari laporan Bank Dunia No. 31708 yang dipublikasikan tanggal 24 Februari 2005.

Hasil survei itu dengan bangga disajikan oleh Menkeu Jusuf Anwar dalam rapat dengar pendapat mengenai RUU Perpajakan dengan DPD di Gedung Nusantara IV, Kompleks DPR/MPR, Senayan, Jakarta, Rabu (16/11/2005).

"Itu dibaca dong sebelum ada komentar. Jadi jangan diambil yang buruknya saja, kenapa kita harus memperburuk muka sendiri kalau orang lain mengatakan bagus. Yang saya sampaikan di sini is the truth and nothing but the truth," ujar Jusuf dengan yakin.

Ia menegaskan, dirinya tidak berbohong mengenai survei ini mengingat pajak adalah masalah krusial karena peranan straegisnya dalam pembangunan negara.

Untuk meyakinkan anggota DPD, Dirjen Pajak Hadi Poernomo pun membagikan hasil survei Bank Dunia itu kepada para anggota DPD.

Dalam hal pajak terutang, dari hasil survei 154 negara, Indonesia menempati peringkat 53. Untuk tarif pajak, dari 51 negara, Indonesia menempati peringkat ke-17.

"Itu bagus, tapi belum puas. Maunya sih semuanya nomor satu. Insya Allah, tapi kita harus menjadi trendsetter," ujar Jusuf.

Namun menurut Jusuf, Indonesia menempati peringkat yang kurang baik dalam hal waktu pengajuan pajak. Dari 155 negara, Indonesia menduduki peringkat ke 118 yakni 560 jam.

Bank Dunia menilai, sistem perpajakan Indonesia sudah modern terutama di bidang pajak penghasilan (PPh) dan pajak pertambahan nilai (PPN).

"Kita sedang membangun large tax office (LTO) dan medium tax office (MTO). Di situ peringkat yang dimilikinya sangat canggih yang dibantu oleh IMF. Jadi kalau kita berprestasi akui saja. Kalau kita buruk pun akui saja," ujar Jusuf.



....sungguh-sungguh mengejutkaaan...... :runaway:

I do not see a strong link between the title and the content. Indonesia's tax office give the best service?

Anyone has the detailed survey result from the World Bank about this matter?

[Alvin]

Latest World Bank report on Indonesia:http://siteresources.worldbank.org/INTINDONESIA/Resources/CGI03/277309-1128600788420/ESocUpdate.pdf

Of interest - Indonesia's medium term economic outlook:
- GDP growth to be 5.7% in 2005, 5.5-6.0% in 2006 and 6.5%-7.0% in 2007-2010.
- Government debt to GDP ratio to decline from 54% in 2004 to 27% in 2010.

[Blue_Sky]

I do not see a strong link between the title and the content. Indonesia's tax office give the best service?

Anyone has the detailed survey result from the World Bank about this matter?
Yes i also suprised just like you
Looks like unbelieveable right??

[macgyver]

I do not see a strong link between the title and the content. Indonesia's tax office give the best service?

Anyone has the detailed survey result from the World Bank about this matter?


Pernah kepikiran gak ?
kalo di Jakarta trus gajinya 20 juta :-)
elu liat dech pajak nya berapa .... he he he. ( mungkin 6 jt an yah )

Nah trus pajak nya itu buat apa ?


Enakan di sini nich ...
dapet 20 jt. ya 20 bulet bulet :-)
dapet 50 jt ya 50 juta bulet bulet .......... he he he

[bahar]

You're in Bahrain, aren't you? Is it a zero income tax country? What about corporate tax?

Are there other countries in the middle east which apply zero tax also?

[David-80]

Are there other countries in the middle east which apply zero tax also?

I heard UEA aka Dubai also applies zero tax income. I think Saudi arabia and Qatar also does the same thing. My uncle worked in Saudi as a defence and engineering consultant for the saudi air forces and he got zero tax deduction for his income.

cheers

[bahar]

thanks for the info.

[bahar]

JAKARTA (XFN-ASIA) - Indonesia's gross domestic product (GDP) grew 2.87 pct in the third quarter to September over the second quarter level and was
up 5.34 pct year-on-year, Central Bureau of Statistics (BPS) deputy chairman Slamet Sutomo said.

"On a year-on-year basis, the economic growth slowed down in the third quarter from the second and first quarters," he told a press briefing.

He said the slowdown can be attributed to lower exports and investment growth.

Indonesia's GDP rose 6.12 pct year-on-year in the first quarter to March, before slowing down to a revised 5.84 pct in the second quarter to June.

Analysts polled by XFN-Asia had expected the GDP to have grown 4.92-5.20 pct year-on-year in the third quarter.

They attributed the lower growth to high inflation, which affected people's spending power, and slowing investment activity.

On a quarter-on-quarter basis, analysts expected third-quarter GDP to have grown 2.75-3.00 pct.

Looking ahead, analysts said the government is unlikely to achieve its full-year economic growth target of 6 pct, with their forecasts ranging from 5.0-5.6 pct.

The steep increase in fuel prices in October and the subsequent high inflation have dampened the growth outlook, they said.


aloysius.bhui@xfn.com

alo/bkm/rc

[David-80]

5.38% is slightly better than what the economist predicted, I think Q4 will only be 5.1% or maybe less.


Indonesia Q3 GDP growth slows but above consensus

JAKARTA, Nov 21 (Reuters) - Indonesia's annual economic growth slowed in the third quarter from the second quarter, as a weak currency and rising inflation and interest rates dampened activity, government data showed on Monday.
The 5.34 percent rise in gross domestic product compared with market expectations for an increase of 5.0 percent and showed annual growth in Southeast Asia's biggest economy slowing from a revised 5.84 percent in the second quarter and 6.12 percent in the first three months of this year.

The central bank forecast on Nov. 1 that the data would show annual growth in the third quarter between 5.2 percent and 5.7 percent. It forecast fourth-quarter expansion of between 5.5 percent and 6 percent.

"Growth suffered some declines compared to the second quarter, and this will continue until the end of this year," Juniman, an analyst at Bank Internasional Indonesia, said.

"I think in the fourth quarter it will grow by 5.1 percent year-on-year, taking the full-year figure to 5.5 percent."

He added that higher interest rates were hurting private consumption.

[Zorobabel]

About what I expected. I think it will be quite low in Q4 with most indicators showing private consumption contracting significantly.

[Blue_Sky]

Overcrowded, historical Senen to get face-lift

Damar Harsanto, The Jakarta Post, Jakarta

Forty-five years since its last renovation, the area around Senen market, with its heavy traffic, street vendors and thugs, is scheduled to undergo a complete makeover into a modern, integrated commercial center.

City market operator PD Pasar Jaya will begin the Rp 3 trillion project early next year.

"The raising of the concrete piles will mark the beginning of a three-year renovation of the old market, one of three oldest and largest traditional markets in the capital," PD Pasar Jaya president director Prabowo Soenirman said.

Senen market, known as Vincke Passer during the Dutch colonial era, was built in 1735 by Justinus Cornellis Vincke, who also developed Tanah Abang market in Central Jakarta.

This will be the second refurbishment for the market in the modern era, with the first renovation ordered by the country's founding president Sukarno in 1961.

"We are now in the process of finalizing the urban design guidelines for the project," Prabowo said.

The project will revitalize the market that in the past was a center of trade in the capital, he said.

However, critics have accused the administration of failing to invite the public to play a greater role in the planning and implementation of the project.

The administration has insisted on using its own design for the refurbished Senen, even though an architectural design competition organized by the Central Jakarta municipality last year came up with a winning design. That design, titled "Life in Tomorrow's Senen", was the work of a team of architects led by Maryanti Kusuma Asmara.

Prabowo said the design from Maryanti and team was not being used for two reasons: the shareholders in Senen market were not involved in the competition and the winning design was not "business friendly".

PD Pasar Jaya is the majority owner and operator of Senen market, while six blocks in the market are owned by city developers Pembangunan Jaya and Jaya Realty.

The three companies have formed a joint venture company, PT Jaya City Development, to operate the refurbished Senen market.

Pasar Jaya holds a 35 percent share of the new company, while Pembangunan Jaya has a 35 percent share and Jaya Realty a 30 percent share.

Governor Sutiyoso said on Monday the new Senen market would be integrated with other facilities, including 30-story apartment towers with about 2,500 total units, office buildings, sports facilities, a bus terminal and a railway station.

The operations director at PD Pasar Jaya, Joko Setiyanto, said the modern market would provide space for over 10,000 kiosks for Senen market traders, who over the years have made Senen the place to find a vast range of products, from jewelry, watches and pharmaceuticals, to traditional foods, spices and cookies.

"We want this market to become a 24-hour trade center," he said.

feel free to cut

During the first stage of renovation work on blocks one to three, traders will be moved temporarily to the second floors of blocks four, five and six.

"After we complete the first stage of renovation, then we will go ahead and renovate blocks four to six," Prabowo said.

In addition to the revitalization of the area around Senen market, the administration has floated ideas for reviving other large traditional markets like Tanah Abang and Jatinegara in East Jakarta.

I-Box

Time line of Senen area

1730 Vincke builds a market near Weltevreden palace (now Gatot Subroto Army Hospital), near the Tanah Abang market. The new market is called Vincke Passer. But because the market is only open on Mondays, people begin calling it Senen, which means Monday.

1735 Vincke orders the construction of Jl. Prapatan, linking the Senen and Tanah Abang markets.

1960-1970 Jakarta governor Ali Sadikin orders the renovation of the area around Senen market, which now includes a parking area, bus terminal and the Senen sports complex.

Jan. 15, 1974 The market is burned during violent student demonstrations in the capital against a visit by Japanese prime minister Tanaka.

1987-1992 Jakarta governor Wiyogo Atmodarminto orders the development of a modern block for the market, known as Atrium Senen.

Nov. 23, 1996 A large fire destroys 750 shops and stalls in the market.

Jan. 26, 2003 A fire destroys more than 100 kiosks in the market.

Various sources

[Alvin]

Realized, approved investment on the rise, BKPM says
Urip Hudiono, The Jakarta Post, Jakarta

Investment in the country has remained strong despite rising inflation and interest rates, the latest data from the Investment Coordinating Board (BKPM) says.

The BKPM said on Tuesday actual foreign direct investment (FDI) during January to October had more than doubled to US$8.55 billion in 785 projects, from $3.23 billion in 421 projects for the same period last year.

Realized investments in the transportation, warehousing and communications sectors made up the lion's share of the figure, with 48 projects valued at $2.93 billion. Following were 37 projects worth $1.12 billion in the chemical and pharmaceuticals industry, and 31 projects worth $896 million in construction.

Domestic investments until October, meanwhile, grew by 36 percent to Rp 16.63 trillion (some $1.66 billion) on 178 projects, as compared to Rp 12.19 trillion on 88 projects during the same period last year.

Local investors had mostly favored the food processing industry (with 31 projects worth Rp 3.39 trillion), as well as the construction sector (four worth Rp 2.46 trillion), and the farming and plantation sector (12 worth Rp 2.11 trillion).

Total domestic investment and FDI amounted to Rp 102.13 trillion for the period and provided jobs for 226,096 workers.

This is an increase from the third quarter report last month of Rp 84.5 trillion in total investments and 197,643 employed workers.

In other areas, BKPM figures show that domestic and FDI approvals as of October increased by 22 percent to 156.6 trillion on 1,569 projects from the same period last year, with FDI approvals alone rising by nearly 22 percent to $11.19 billion.

The government is targeting Rp 179 trillion worth of domestic and FDI approvals for 2005, with at least Rp 50.1 trillion expected to be realized within the year.

BKPM's figures exclude investments in the oil and gas industry and in banking and non-bank financial institutions, as these licenses are issued by other government agencies.

And the poor performance of banks may explain why the Central Statistics Agency (BPS) reported that overall growth in Indonesia's investment sector -- which currently makes up 21 percent of the country's gross domestic product (GDP) -- had slowed during this year's third quarter, to 9.18 percent from 14.54 percent in the second.

Indonesia has been struggling to lure back overseas investments -- which peaked at $39.66 billion in 1995, before faltering to $13.64 billion following the 1997-1998 Asian crisis -- to help spur on economic growth and create more jobs.

[tata]

RI undang raksasa software India
Oleh Ahmad Djauhar
Bisnis Indonesia

BANGALORE, India: Presiden Susilo Bambang Yudhoyono mengundang Infosys-raksasa software India-untuk menjadi mitra bisnis perusahaan Indonesia.
Keinginan itu disampaikan kepada Chairman Infosys NR Narayan Murthy saat Presiden Yudhoyono dan sejumlah menteri Kabinet Indonesia Bersatu mengunjungi perusahaan yang berlokasi di Electronic City, Bangalore, Senin.

Presiden mengakui TI saat ini ibarat pilar atau darah bagi kemajuan sebuah bangsa. Karena itu, dia ngotot untuk memajukan industri software di Indonesia dengan menjalin beberapa raksasa software dunia, termasuk Microsoft yang menyatakan kembali komitmennya saat bertemu Presiden di Busan Minggu.

Kepada jajaran pemimpin Infosys, dia berjanji mengirimkan lagi tim ke Bangalore guna merealisasikan rencana kerja sama itu. "Setiba di Indonesia, saya akan meminta Menteri Perindustrian dan Menteri Komunikasi dan Informatika untuk berbicara dengan Anda guna menyusun kerja sama."

Berdasarkan penjelasan Murthy, Infosys yang didirikan pada 1991, kini menyumbang devisa sekitar US$2 miliar dari total nilai ekspor software India sebesar US$17,8 miliar pada 2004.

Perusahaan yang mempekerjakan langsung sedikitnya 40.000 orang-dan tidak langsung sebanyak 1 juta orang-itu tahun lalu meraup laba bersih sekitar US$490 juta. Selain aktif dalam kegiatan bisnis, Infosys juga berpartisipasi cukup besar dalam berbagai kegiatan sosial di India dan dunia.

Khusus di India, kata Anand Krishna, eksekutif Infosys, "Kami memelopori budaya responsible corporate citizen. Hal itu antara lain kami wujudkan dalam bentuk pemberian makan siang bagi 80.000 sekolah kanak-kanak milik pemerintah yang tersebar di seluruh kota di India."

Selain itu, penerapan konsep good corporate governance oleh Infosys diakui membawa dampak sangat bagus bagi kinerja perusahaan India pertama, yang mencatatkan sahamnya di bursa Nasdaq, AS, itu.

Keberadaan perusahaan seperti Infosys sangat penting bagi India untuk menyukseskan rencana pencapaian ekspor software senilai US$50 miliar pada 2008. Industri software di India berkembang pesat karena berbagai aset negeri itu a.l. memiliki komunitas berbahasa Inggris terbesar kedua di dunia dan mampu menghasilkan jutaan insinyur berdaya saing di tingkat global.

Peralatan militer

Sementara itu, dalam kunjungannya ke pabrik peralatan militer Hindustan Aeronautics Ltd, Presiden Yudhoyono sempat menikmati atraksi helikopter ringan DHRUV yang diklaim sekelas Puma.

"Kita perlu menjalin kerja sama pengadaan peralatan militer yang lebih luas, sehingga tidak tergantung hanya pada satu sumber."

Dia menambahkan prioritas pengadaan peralatan militer tetap diupayakan dari industri domestik yang sudah dimiliki. "Kalau belum mampu, baru mengadakan kerja sama dengan pihak yang lebih luas," tulisnya kepada Bisnis dari India.

Secara terpisah, Kadin Indonesia memastikan tawaran kerja sama TI dengan swasta India akan disampaikannya dalam Konferensi Bisnis Tingkat Tinggi pejabat dan pengusaha kedua negara yang akan berlangsung di New Delhi, hari ini. "Konferensi ini diselenggarakan Kadin India yakni CII, ASSOCHAM dan FICCI," kata Ketua Komite Kerja Sama Ekonomi Global Kadin Indonesia Jaka A. Singgih.

Dia mengakui India merupakan salah satu negara terdepan di bidang aplikasi TI di dunia, yang ditunjukkan Infosys.

Jaka, yang juga menjadi Ketua Delegasi Indonesia pada Konferensi Bisnis Tingkat Tinggi RI-India, menyebutkan keberhasilan India dalam penguasaan TI juga ditunjukkan dengan dimilikinya lembah silikon dan perusahaan angkasa luar, Hindustan Aeronautics Ltd. (ahmad. djauhar@bisnis.co.id)

[tata]

Pretty good news: Nokia to build technology center in Bandung

from www.bisnis.com

Rabu, 23/11/2005 16:34 WIB
Nokia akan bangun pusat teknologi di Bandung
oleh : Junaidi Halid

JAKARTA (Bisnis): Nokia bersiap menanamkan modal di Indonesia yang dimulai dengan membangun pusat teknologi dan sistem jaringan telekomunikasi generasi kedua (2G) dan ketiga (3G) di Bandung pada semester pertama 2006.

Marko Kytoharju, Country Director PT Nokia Networks, mengemukakan persiapan investasi perusahaan telekomunikasi kelas dunia tersebut saat ini pada tahap mencari lokasi yang tepat di Bandung.

Meski rencana ini sudah matang, dia belum bersedia menyebutkan nilai investasi yang akan ditanamkan Nokia dalam proyek pembangunan pusat teknologi dan sistem jaringan telekomunikasi itu.

"Belum bisa disebutkan sekarang karena masih dalam tahap persiapan. Yang jelas nilainya sangat signfikan", ujarnya siang ini.

Selain akan dijadikan sebagai laboratorium dan ujicoba sistem dan teknologi Nokia, Marko menuturkan pusat teknologi di Bandung juga akan dimanfaatkan sebagai pusat pengembangan kompetensi dan transfer teknologi bagi pelanggan, karyawan, dan mitra lokal di Indonesia.

Melalui pusat teknologi tersebut, papar dia, tidak tertutup kemungkinan Nokia berkolaborasi dengan penyedia aplikasi lokal untuk mencoba konten ataupun kerjasama program dengan perguruan tinggi lokal.

Ketika ditanyakan perkembangan persiapan proyek tersebut, Marko mengatakan sejauh ini Nokia sudah mengadakan pembicaraan dengan pihak-pihak terkait di Indonesia dan hasilnya positif.

Sedangkan menyangkut rencana investasi di bidang produksi perangkat telekomunikasi, dia mengatakan sejauh ini memang belum ada rencana dari perusahaan asal Finlandia itu.

"Bisa saja investasi sampai ke produksi dilakukan jika pasar Indonesia sudah sangat besar. Kami melihat Indonesia termasuk pasar telekomunikasi yang sangat potensial karena saat ini penetrasinya masih rendah", ujarnya.

Tapi, menurut dia, tidak hanya masalah pasar yang harus dipertimbangkan sebelum memutuskan untuk menanamkan investasi pabrik karena banyak faktor penting lainnya termasuk politik.

[tata]

The BKPM said on Tuesday actual foreign direct investment (FDI) during January to October had more than doubled to US$8.55 billion in 785 projects, from $3.23 billion in 421 projects for the same period last year.


if it's on the same trend by the end of 2005 is projected into US$10.26 billion. Still far from the peak in '95 but on the good trend.

Now, is 2006 easier or harder year?

[Blue_Sky]

Bank Indonesia (BI) dianggap melanggar hak cipta menyangkut penggunaan gambar pahlawan nasional asal Sumatera Selatan, Sultan Mahmud Badaruddin II, yang tercetak dalam lembar uang Rp 10.000 edisi baru berwarna dominan ungu. Pasalnya, BI tidak meminta izin menggunakan gambar tersebut kepada pelukisnya yaitu Eden Arifin, seniman asal Sumatera Selatan. Eden melayangkan somasi dan meminta BI menghentikan peredaran uang tersebut.

Eden Arifin didampingi kuasa hukumnya, Suyud Margono, kepada wartawan di Jakarta, Rabu (23/11), mengklaim gambar Sultan Mahmud Badaruddin II dalam lembar uang baru itu adalah hasil lukisannya. "Hanya ada satu lukisan Sultan Mahmud Badaruddin II. Tidak ada yang lain. Lukisan itu saya yang buat. BI tidak pernah meminta izin menggunakan gambar itu," kata Eden.

Ia menuturkan, lukisan yang dibuatnya itu ditetapkan sebagai gambar resmi Sultan Mahmud Badaruddin II sejak 1982 berdasarkan Surat Keputusan Gubernur TK I Sumatera Selatan No 704/KPTS/X/1982. Pada waktu itu, Eden memenangi lomba membuat lukisan Sultan Kesultanan Palembang Darussalam yang tengah diperjuangkan mendapat gelar Pahlawan Nasional.

Kemudian, pada 1984 Sultan Mahmud Badaruddin II dikukuhkan sebagai Pahlawan Kemerdekaan Nasional oleh Presiden Soeharto kala itu dengan gambar resmi yang dibuat Eden.

Selama ini Eden tidak mengurus hak cipta atas lukisan yang dibuatnya itu. Namun, di Palembang namanya populer sebagai pencipta lukisan Sultan Mahmud Badaruddin II.

Ketika BI memperkenalkan lembaran uang baru nominal Rp 10.000 di Palembang pada awal kuartal keempat tahun ini, Eden terkejut. Pasalnya, lukisan yang dibuatnya itu tercetak di uang baru itu tanpa pernah ada permohonan izin atau pemberitahuan dari BI kepadanya sebagai pencipta.

Ia pun segera mendaftarkan hak cipta lukisannya ke Departemen Hukum dan Hak Asasi Manusia. Hak paten diperolehnya pada 10 Oktober 2005. BI sendiri secara resmi baru mengedarkan uang tersebut pada 20 November 2005.

"Sebagai seniman saya tersinggung karena lukisan itu digunakan tanpa seizin saya. Saya hanya meminta pengakuan. Tidak ada versi lain lukisan Sultan Mahmud Badaruddin II selain lukisan yang saya buat," ujarnya.

Melalui kuasa hukumnya, Suyud Margono, Eden melayangkan somasi kepada BI pada 21 November 2005. Jika dalam waktu 14 hari BI tidak memberikan penjelasan, Eden akan menuntut BI secara pidana dan perdata dengan tuduhan melanggar hak cipta.

Menurut Suyud, hingga akhir Desember BI akan mengedarkan uang pecahan Rp 10.000 sebanyak 200 juta lembar. "Kami menuntut agar BI memberikan hak cipta kepada klien kami sebesar Rp 50 per lembar. Bila BI mengedarkan 200 juta lembar uang Rp 10.000, klien kami berhak mendapat Rp 10 miliar. Jika BI tidak menanggapi tuntutan ini kami meminta agar peredaran uang tersebut dihentikan karena secara hak cipta uang tersebut palsu," kata Suyud.

Langkah BI

Sementara itu, saat dihubungi KCM, Rabu malam, Humas BI Halim Alamsyah mengatakan pilihan pada gambar Sultan Mahmud Badaruddin II semata-mata dilakukan atas dasar kontribusi pahlawan nasional itu bagi pembangunan bangsa. "Tidak ada pertimbangan bisnisnya," kata Halim.

Secara rinci, Halim mengatakan, terkait Rp10.000 baru, sejak dua tahun terakhir, BI sudah melakukan konsultasi dengan berbagai pihak. Konsultasi pertama dilakukan dengan Departemen Sosial (Depsos), jelas Halim. Pasalnya, departemen itu yang ditugasi mengurus soal-soal pahlawan nasional.

Dari konsultasi dengan Depsos diperoleh pertimbangan bahwa Sultan Mahmud Badaruddin II adalah pahlawan yang perlu ditonjolkan. "Depsos yang menyodorkan gambar Sultan Mahmud Badaruddin II," kata Halim seraya menambahkan, Dewan Gubernur, setelah rembukan, menyetujui gambar yang disodorkan Depsos tersebut.

Langkah kedua, papar Halim, pihak BI meminta izin kepada ahli waris Sultan Mahmud Badaruddin II. "Dalam pertemuan kekeluargaan dengan pihak keluarga dan ahli waris, mereka sangat menghargai dan bangga," kata Halim.

Selanjutnya, masih menurut Halim, BI juga melakukan pengecekan terhadap gambar Sultan Mahmud Badaruddin II pada berbagai buku pelajaran resmi yang disetujui Departemen Pendidikan Nasional. "Betul, gambar itu adalah gambar Sultan Mahmud Badaruddin II," kata Halim.

Selanjutnya, berkenaan dengan somasi di atas, Halim mengatakan,"Kalau sekarang ada klaim terhadap hak paten, saya kira kami pulangkan ke Depsos."


source : http://www.kompas.com/utama/news/0511/23/185939.htm

ujung ujungnya minta uang

[macgyver]

I heard UEA aka Dubai also applies zero tax income. I think Saudi arabia and Qatar also does the same thing. My uncle worked in Saudi as a defence and engineering consultant for the saudi air forces and he got zero tax deduction for his income.

cheers

Yupe Almost every country in Middle East applies zero income tax.
But expat here paid less then local :-p funny eh ...

Ada kasta2 pegawai di sini ...
kasta pertama : orang local dan arab
kasta kedua : orang bule
kasta ketiga : orang lain lain .... :)

[Alvin]

Thursday November 24, 5:41 PM
Indonesia cuts 2005 GDP forecast, sees 16 pct inflation

JAKARTA, Nov 24 (Reuters) - Indonesia cut its 2005 economic growth forecast on Thursday and said inflation would end the year at around 16 percent after recent huge fuel price increases, before slipping to single digits by the end of 2006.
Miranda Goeltom, senior central bank deputy governor, said 2005 gross domestic product growth could be 5.2 to 5.6 percent. Finance Minister Jusuf Anwar said the economy was expected to grow by 5.5-5.8 percent, below the budget target of six percent.

Goeltom also said the central bank's target one-month interest rate, the BI rate, would stay below or "approach" the annual inflation rate next year, suggesting to analysts that the authorities would concentrate on supporting growth in the near term. Officials said high global oil prices, which have pushed up demand for dollars for fuel imports and hurt the rupiah, were a significant factor behind the lower economic growth and higher inflation forecasts in Southeast Asia's largest economy.

In October inflation was at 17.89 percent, the highest level in more than six years.

Goeltom forecast it would end 2005 at 16 percent, plus or minus one percentage point, which would be the highest annual rate since the height of the financial crisis in 1998 when inflation was almost 80 percent.

"With the impact from the domestic fuel price hikes, inflation pressures in 2005 are predicted to be higher than what was previously expected," Goeltom said, referring to an average 126 percent increase in government-set fuel prices on Oct. 1. ADVERTISEMENT



Indonesia's 2005 state budget, as revised last month, forecast inflation would end 2005 at 8.6 percent.

Goeltom said inflation should ease to 8-9 percent by the end of next year.

SUPPORT FOR GROWTH

Indonesian President Susilo Bambang Yudhoyono said late last month he hoped the economy would grow by 5.7 or 5.8 percent this year after 5.1 percent in 2004.

Thursday's official forecasts are closer to market estimates. The latest Reuters poll of analysts produced a median forecast of 5.3 percent growth this year.

"Given slow consumer spending and private investment, increased government spending is crucial to keep the economic momentum," said Fauzi Ichsan, Jakarta-based economist for Standard Chartered.

He said Stanchart had revised down its 2006 GDP growth forecast to 5.5 percent from 5.7 percent, while maintaining its 2005 forecast at 5.5 percent.

He expected GDP growth to dip to 4.8 percent in the fourth quarter of 2005 compared with a year earlier, with the slowdown likely to continue into the first half of 2006.

The statistics bureau said this week that the economy expanded 5.3 percent in the third quarter from a year earlier, slowing from 5.8 percent in the second quarter of the year, partly due to weaker investment and consumer spending.

Analysts said the third-quarter performance might be one reason the central bank would shy away from further sharp rises in interest rates.

Agus Priyambada, an economist at Trimegah Securities, said the central bank's approach -- keeping the benchmark interest rate below or approaching inflation -- made sense at the moment.

"Under normal circumstances, we do need to keep a positive real interest rate. But right now, in the short term, I think it would not be a problem to keep negative real interest rates," Priyambada said.

The central bank's BI rate is currently 12.25 percent. It was introduced in July at 8.50 percent. (Additional reporting by Asikin Nurachmad, Gde Anugrah Arka and Harry Suhartono)

[zafarali]

i never thought that INDONESIA is such develope country...i was quite impress after watching some pixs in the thread...well BEST WISHES ti INDO frm other MUSLIM Country PAKISTAN..

[Alvin]

US$6 BLN synthetic diesel factory to be built in East Kalimantan, it will produce high quality diesel to the standard of Euro IV, much higher than the Pertamina Dex which is Euro II. To start operations mid 2008.

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

Accelon bangun pabrik solar di Kaltim

JAKARTA: Accelon Energy System Inc, Kanada, akan membangun pabrik solar sintetis (syntethic diesel) berbahan baku batu bara dengan investasi US$6 miliar, sementara PT Pertamina akan jadi penjamin pembeli (off taker) seluruh produksi sebesar 28 juta barel per tahun.
Dirut Pertamina Widya Purnama mengungkapkan rencana pembelian itu tertuang dalam Memorandum of Understanding (MoU) dengan sifat mengikat (binding) antara Pertamina dan Accelon yang ditandatangani pada 23 November 2005 di Jakarta.

Dalam tiga bulan ini, MoU tersebut ditingkatkan menjadi agreement agar pembangunan pabrik solar sintetis itu segera direalisasikan. Pabrik ini merupakan yang pertama di Kaltim.

Namun dalam kerja sama itu, Pertamina hanya menjadi penjamin pembeli (off taker) sehingga perusahaan pertambangan milik negara ini tidak memiliki saham di pabrik solar sintetis. "Dari mana kami mendapat uang sebanyak itu."

Dalam kontraknya, Accelon hanya boleh menjual seluruh hasil olahan solar sintetis yang dihasilkan dari batu bara kepada Pertamina selama 15 tahun dengan harga sesuai harga internasional.

Dia mengklaim Pertamina akan membeli berdasarkan harga internasional sehingga BUMN itu akan mendapatkan keuntungan karena tidak perlu lagi mengeluarkan biaya transportasi yang besar seperti ketika impor.

"Ekonomi lokal, regional, dan pusat akan memperoleh keuntungan sebesar US$500 juta per tahun."

Proses pengolahan pabrik ini, menurut rencana, mulai dari bahan baku batu bara yang diubah menjadi gas lalu dipadatkan, dan dijahit menjadi syntethic crude, lalu diubah lagi menjadi solar sintetis.

Syntethic crude yang dihasilkan dari batu bara sebenarnya dapat juga diubah menjadi premiun sintetis, namun kenapa Pertamina memilih untuk mengubahnya menjadi solar sintetis.

Pabrik solar sintetis dengan kapasitas produksi 28 juta barel per tahun ini akan dibangun di Kalimantan Timur, yang merupakan wilayah dengan kandungan batu bara terbesar, dan akan beroperasi pada pertengahan 2008.

Jumlah itu setara dengan 5 juta kilo liter per tahun. Artinya, memenuhi 30% kebutuhan impor solar yang selama ini dipasok Pertamina sebesar 17 juta kl per tahun.

Total batu bara yang dibutuhkan pabrik solar sintetis ini 10 juta ton per tahun dari jenis yang berkalori rendah. Selama ini batu bara muda dengan kalori rendah sangat jarang diminati para pengguna batu bara.

Dari batu bara yang berkualitas rendah, pabrik ini akan menghasilkan solar sintetis berkualitas tinggi yaitu Euro IV, jauh di atas Pertamax Dex yang berstandar Euro II.

Secara terpisah Ketua Gaikindo Bambang Trisulo mengatakan tersedianya solar yang memenuhi standar emisi gas buang Euro IV akan memicu industri otomotif mendatangkan mobil dengan teknologi itu.

"Di Eropa sudah mau Euro V. Thailand sudah mau pindah ke Euro IV. Kita memang tertinggal. Tapi setidaknya akan memicu industri otomotif lokal." (Ahmad Muhibuddin) (dwi.djanuarto@bisnis.co.id)

[XxRyoChanxX]

i never thought that INDONESIA is such develope country...i was quite impress after watching some pixs in the thread...well BEST WISHES ti INDO frm other MUSLIM Country PAKISTAN..

best wishes for u too!!

[Blue_Sky]

JAKARTA-Di tengah kondisi pasar elektronik yang suram di tahun 2005 ini, megastore elektronik terbesar di Jepang, PT Best Denki akan membuka outletnya di Indonesia. Rencananya, dalam tiga tahun mendatang akan dibangun lagi lima outlet elektronik besar di Indonesia. "Indonesia adalah pasar elektronik terbesar di wilayah Asia Tenggara, kami tertarik untuk menggarapnya meski saat ini kondisi penjualan elektronik cenderung menurun," ujar Rosli Ali, direktur operasi dan promosi PT Best Denki Indonesia, disaat acara Trade Presentation di Senayan City, kemarin.

Meski tahun 2005 penjualan elektronik suram tapi diperkirakan tahun depan kondisinya akan pulih seperti semula bahkan diperkirakan meningkat sekitar 20 persen.

Menurutnya, penurunan saat ini hanya disebabkan oleh keterkejutan konsumen atas naiknya kebutuhan hidup. Konsumen masih dalam kondisi wait and see, diperkirakan kuartal kedua sudah mulai membaik dan konsumen akan melakukan pembelian lagi. "Kita harus optimis untuk melakukan penetrasi pasar di Indonesia, sesuai produk-produk yang kita jual maka target konsumen kita adalah yang kelas middle up," tuturnya.

Rosli menargetkan perputaran bisnis sebesar US $216 dalam waktu tiga tahun di Indonesia. Hal ini didasarkan atas hasil research yang dilakukan bahwa akan terjadi peningkatan pasar untuk televisi sebesar 14 persen, kulkas 12 persen, air conditioner (AC) 22 persen dan mesin cuci 22 persen. "Untuk DVD player justru kita perkirakan akan ada peningkatan pasar sebesar 100 persen di Indonesia," tukasnya.

Outlet pertama yang dibangun di Indonesia tersebut akan menempati lahan seluas 5.200 meter persegi di Senayan City lantai empat dan merupakan outlet ke-594 di seluruh dunia dan yang pertama di Indonesia. Operasionalnya diperkirakan pada bulan April tahun depan. Hingga tahun 2008 nanti direncanakan akan dibangun lima outlet lagi di Indonesia. "Sebagian besar outlet ada di Jepang, cabang lainnya ada 10 di Singapura, 5 di Malaysia, 5 di hongkong dan 12 di Taiwan," terangnya.(wir/jpnn)

[Zorobabel]

Manufacturing, the backbone of middle-income economies...

---

Indonesia's Manufacturing Industry Grows 6.76% in Q3

JAKARTA, Nov 29 Asia Pulse - Indonesia's manufacturing industry grew 6.76 per cent year-on-year in the third quarter of this year.

Industry Minister Andung A. Nitimihardja said he was optimistic the manufacturing industry will expand by 6.8 per cent this year despite the general slump following the 125 per cent hikes in the price of oil fuels in October.

Without the additional burden as a result of the fuel price hikes, the target would be overshot, Andung said.

The strong growth in the first nine months of this year was attributable to more than expected growth rates recorded in heavy equipment, electronics, machine and telecommunications sector, he said.

He said agro-based industry including food and beverage sector grew 3.7 per cent exceeding the target of 3.4 per cent.

Agro-based industry contributed the largest or 27.4 per cent to the growth of the manufacturing sector.

[Blue_Sky]

Jakarta - Tewasnya otak pelaku terorisme di Indonesia, Azahari, berdampak positif bagi pariwisata Indonesia. Salah satunya, tingkat hunian hotel di Indonesia mengalami kenaikan.

"Bahkan saya berkali-kali disalami pihak hotel di Bali karena tingkat hunian mereka mencapai 100 persen," kata Menteri Kebudayaan dan Pariwisata Jero Wacik.

Hal ini disampaikannya dalam acara program pemulihan kepariwisataan Bali melalui 10.000 tiket gratis tujuan Bali di Ball Room Hotel Aryaduta, kawasan Patung Pak Tani, Jakarta Pusat, Selasa (29/11/2005).

Berdasarkan data Kementerian Budaya dan Pariwisata menunjukkan, hunian hotel di Palembang kini naik menjadi 75 persen, Padang 75 persen, Medan 50 persen, Jawa 80 persen, dan Bali 90 persen.

Menurut Jero, akibat Bali I tahun 2002 lalu, keadaan baru bisa dipulihkan setelah dua tahun. Tapi recovery akibat bom Bali II harus lebih cepat. "Diperkirakan Juni 2006 keadaan kembali membaik," tegasnya.

Mengenai masalah travel warning yang sering dikeluarkan pemerintah asing, Jero mengaku sudah membicarakan hal ini dengan Menlu Hassan Wirajuda.

"Travel warning itu tidak melarang tetapi memberikan peringatan agar berhati-hati. Bagaimanapun juga suatu negara mempunyai kewajiban untuk melindungi warganya," tutur politisi Partai Demokrat ini.

Oleh karena itu, menurutnya, untuk mengantisipasi travel warning, pemerintah harus melakukan promosi pariwisata dengan gencar.

Salah satu promosi itu adalah kerjasama pemerintah dengan Garuda mengadakan program undian 10.000 tiket gratis ke Bali yang terbagi dua yaitu, domestik dan internasional.

Penumpang domestik dapat memeproleh tiket gratis ke Bali dengan cara menggunakan penerbangan Garuda menuju Jakarta. Sedangkan untuk penumpang internasional dapat mendaftar ke website Garuda.
(ahm)

source : http://jkt3.detiknews.com/indexfr.php?url=http://jkt3.detiknews.com/index.php/detik.read/tahun/2005/bulan/11/tgl/29/time/15287/idnews/488735/idkanal/10

[paradyto]

Salah satu promosi itu adalah kerjasama pemerintah dengan Garuda mengadakan program undian 10.000 tiket gratis ke Bali yang terbagi dua yaitu, domestik dan internasional.

Penumpang domestik dapat memeproleh tiket gratis ke Bali dengan cara menggunakan penerbangan Garuda menuju Jakarta. Sedangkan untuk penumpang internasional dapat mendaftar ke website Garuda.
(ahm)

source : http://jkt3.detiknews.com/indexfr.php?url=http://jkt3.detiknews.com/index.php/detik.read/tahun/2005/bulan/11/tgl/29/time/15287/idnews/488735/idkanal/10

Percaya nggak percaya, kemarin saat penerbangan Palembang - Jakarta, Aku yang ambil undiannya didalam tempat undian, ternyata... Ibu2 yang duduk disebelahku yang dapat ticket Jakarta - Bali!!!!

[Alvin]

Wednesday November 30, 12:21 PM

Indonesia c.bank sees GDP growth 5.5-6.0 pct in 2006

JAKARTA, Nov 30 (Reuters) - Indonesia's economic growth is expected to pick up next year compared with this year and the inflation rate will fall sharply, the central bank's governor said on Wednesday.
However, Burhanuddin Abdullah told a seminar the current slow down in economic momentum was expected to last until the second quarter of 2006.

"GDP growth in 2006 is expected to be between 5.5-6.0 percent with the slowing down cycle continuing until the second quarter of 2006," Abdullah said.

He expected 2005 economic growth of 5.6 percent, the top end of a range of 5.2 percent to 5.6 percent forecast earlier this week by Miranda Goeltom, Bank Indonesia's senior deputy governor.

Indonesia's annual economic growth eased to 5.34 percent in the third quarter, the weakest pace in a year, as consumers and businesses were hit by a jump in inflation and interest rates.

Bank Indonesia cranked up its key BI rate to 12.25 percent after annual inflation jumped in October to a six-year high of 17.89 percent, largely the result of an average 126 percent jump in domestic fuel prices on Oct. 1 as the government slashed its fuel subsidies. ADVERTISEMENT



Abdullah said the central bank predicted annual inflation would still be above 17 percent at the end of 2005, but would cool to between 7 percent and 8 percent by the end of next year.

"The tight bias monetary policy would be kept to slow down the inflation," he said.

Abdullah's comments generally reflect those of Goeltom, who forecast earlier this week that annual inflation would end the year around 16 percent, plus or minus one percentage point, and 8 percent to 9 percent by the end of next year.

The central bank's 2005 growth forecast is similar to that of Finance Minister Jusuf Anwar, who earlier this week predicted expansion of 5.5 percent to 5.8 percent.

[Alvin]

Govt should use savings from fuel price hike to increase govt spending and pump up those infrastructure projects to dampen the effects of weak consumption as a result of high interest rates and high inflation...I support expanding the deficit to 1% to create employment and spur growth...

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


INDONESIA'S 2006 GROWTH TARGET STILL ACHIEVABLE: MINISTER

Tuesday November 29, 2005, 11:55 am



JAKARTA, Nov 29 Asia Pulse - Coordinating Minister for Economic Affairs Aburizal Bakrie said the 2006 economic growth target of 6.2 percent will be hard to achieve.

"It will be difficult but still not impossible to reach," he said at the ministry of finance building here on Monday. ADVERTISEMENT



He said the government's budget in 2006 was expected to boost economic growth.

The job of drafting Budget Implemntation Lists ((DIPA) should be completed soon because the government's expenditures will influence the realization of real projects.

State Minister of National Development Planning and Head of the National Development Planning Board Sri Mulyani also expressed optimism that the economic growth targt of 6.2 percent could be reached through hard work.

"God willing it will be achieved. I am optimistic it can be reached if there is no adverse external factor," she said.

She further said the challenge which had to be faced in 2006 was the inflation rate which had weakened consumption, the impact of bird flu oubreaks, international interest rates and the international fuel oil price.

She said the government was so far unable to predict the level of the impact of bird flu on Indonesia.

(ANTARA)

[David-80]

Indonesia international reserves rise to $33.08 bln


JAKARTA, Nov 30 (Reuters) - Indonesia's international reserves rose to $33.08 billion

in the third week of November from $32.36 billion a week before, central bank data showed on Wednesday.
Bank Indonesia said on its Web site (www.bi.go.id) that base money fell to 220.34 trillion rupiah ($21.95 billion) from 230.33 trillion rupiah the previous week.

http://sg.yimg.com/i/aa/providers/reuters.gif

[David-80]

Indonesia's Rei Wants Foreigners Granted Wider Property Rights

JAKARTA, Nov 30 Asia Pulse - Developers of property projects grouped in the Association of Indonesian Real Estate Companies (REI) have suggested the government alter property use rights for foreign companies.
"Other countries allow foreign institutions to use property for 99 years. No wonder if foreign agencies are not interested in purchasing Indonesian property," REI chairman Lukman Purnomosidi said here Tuesday.

REI members expressed similar wishes to extend the property use rights of foreign parties in a one-day seminar here on Monday also attended by National Land Agency chairman Joyo Winoto.

Lukman did not agree with extending property use rights of foreigners from 22 to 99 years, which will be tantamount to selling the country to others.

"We only give the opportunity to foreigners to use properties, not to own them," he said.

A new regulation that allows foreign firms to use property for more than 25 years will contribute more foreign exchange to the state's coffers, beside the multiplier effect from the creation of new jobs, he said


He cited that Dubai and India have enjoyed an economic fortune thanks to foreign contribution as they have adjusted their property use rights of foreigners to their staying permit.

Lukman also said the proposed property use rights of foreigners should be coupled with a series of conditions stipulating that foreign firms are only allowed to stay in high-rise buildings as apartments and condominiums from the third floor and on.

The regulation should also stipulate that foreign agencies are merely permitted to stay in new properties, he said, adding that the number of foreigners residing in Indonesian property should not reach more than 50 percent of the total occupancy rate.

In order to discourage Indonesians buying properties overseas, the government should issue a regulation to curb the flow of funds from Indonesia to foreign countries but increase foreign exchange in the country, he said.

If the government succeeds in this regulation, he said, Indonesia will likely be capable of earning US$20 million-US$30 million annually or even US$100 million a month in the long run.

(ANTARA)

[David-80]

Seems like we have a lot of trade surplus with any countries?

Indonesia, China Trade Estimated to Reach US$14 BLN This Yr

JAKARTA, Nov 30 Asia Pulse - Bilateral trade between Indonesia and China is estimated to reach US$14 billion this year, up from US$13.5 billion last year, an Indonesian official said
The trade value is forecast to rise to US$20 billion in 2006, Indonesian Ambassador to China Sudrajat said.

Indonesian exports to China are dominated by natural gas and coal.

Sudradjat said the two countries have signed a number of trade contracts, memorandum of understanding and other business deals.

Last year the country was favored with a surplus of US$1 billion in trade with China. This year the surplus is expected to widen.

(ANTARA)

[bahar]

but we have a huge trade deficit with Singapore (including re-exports from third countries through Singapore)

[XxRyoChanxX]

Govt should use savings from fuel price hike to increase govt spending and pump up those infrastructure projects to dampen the effects of weak consumption as a result of high interest rates and high inflation...I support expanding the deficit to 1% to create employment and spur growth...

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


INDONESIA'S 2006 GROWTH TARGET STILL ACHIEVABLE: MINISTER

Tuesday November 29, 2005, 11:55 am



JAKARTA, Nov 29 Asia Pulse - Coordinating Minister for Economic Affairs Aburizal Bakrie said the 2006 economic growth target of 6.2 percent will be hard to achieve.

"It will be difficult but still not impossible to reach," he said at the ministry of finance building here on Monday. ADVERTISEMENT



He said the government's budget in 2006 was expected to boost economic growth.

The job of drafting Budget Implemntation Lists ((DIPA) should be completed soon because the government's expenditures will influence the realization of real projects.

State Minister of National Development Planning and Head of the National Development Planning Board Sri Mulyani also expressed optimism that the economic growth targt of 6.2 percent could be reached through hard work.

"God willing it will be achieved. I am optimistic it can be reached if there is no adverse external factor," she said.

She further said the challenge which had to be faced in 2006 was the inflation rate which had weakened consumption, the impact of bird flu oubreaks, international interest rates and the international fuel oil price.

She said the government was so far unable to predict the level of the impact of bird flu on Indonesia.

(ANTARA)

still hope they reach it

[Alvin]

18.4% inflation last month...leads me to think...whether the huge fuel price increase in October was too much of a shock to absorb for the economy.

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


Indonesia's Inflation Accelerates to Six-Year High (Update3)

Dec. 1 (Bloomberg) -- Indonesia's inflation accelerated to a six-year high in November after the government more than doubled fuel prices in October, increasing pressure on the central bank to raise interest rates as early as next week.

Consumer prices in Southeast Asia's largest economy surged 18.4 percent from a year earlier after a 17.9 percent gain in October, Choiril Maksum, director at the Central Statistics Office told a briefing in Jakarta. That was more than the median 17.4 percent forecast in a Bloomberg survey of 11 economists and the highest since June 1999.
PT Aneka Tambang, the world's fifth-largest nickel producer in 2004, raised salaries, and PT Semen Gresik, Indonesia's biggest cement maker, increased prices due to the decision by President Susilo Bambang Yudhoyono's government to more than doubled fuel costs on Oct. 1 to contain the budget deficit. Bank Indonesia Governor Burhanuddin Abdullah yesterday said the regulator will extend its ``tight monetary policy.''

``It's a big surprise on the upside,'' said Euben Paracuelles, an economist at DBS Group Holdings Ltd. in Singapore. The central bank ``will be right to raise rates, but they will have to be careful not to overdo it because economic growth is slowing.''

Bank Indonesia brought forward its monthly board meeting by two days to Dec. 6, central bank spokesman Halim Alamsyah said without giving a reason.

Food Prices

PT Ramayana Lestari Sentosa, Indonesia's second-largest retailer by sales, said it may have to raise prices by as much as 10 percent next year.

``Prices have gone up, our costs have increased,'' said Setyadi Surya, head of Ramayana's promotional division. ``We will, inevitably, raise ours.''

Food prices rose 18.2 percent in November after gaining 18 percent a month ago, while transport prices rose 44.7 percent after rising at a similar pace in October.

``It's bad for companies because consumption will slow,'' said Michael Tjoajadi, who helps manage the equivalent of $957 million in assets at PT Schroder Investment Indonesia.

Bank Indonesia on Nov. 1 raised its benchmark interest rate by a record 1 1/4 percentage points to 12.25 percent, the fifth increase in nine weeks, after October's inflation report showed the consumer price index had risen to a six-year high. The BI rate is used as a reference for the central bank's bill sales.

Crude Oil

``Not only the oil component is affected by the oil price hike but the non-oil component including clothing, education,'' Nizam Idris, an economist at IDEAglobal in Singapore said before the release. ``Inflation expectations is already built into the system so therefore high interest rates should be expected going forward.''

Inflation will probably exceed 17 percent this year, Abdullah said yesterday. Consumer prices rose 1.3 percent in November from a month earlier, the statistics bureau said.

``The risk of economic instability will continue because of the fuel price increase and its second-round effect,'' Abdullah said in a speech in Jakarta. ``The inflation pressure is likely to continue to be high.''

The government is concerned about rising inflation because it has increased transport costs in some of Indonesia's provinces and pushed up the price of basic food items such as red chillies, Finance Minister Jusuf Anwar said.

``Something has to be done with'' the components of the consumer price index, Anwar said in Jakarta on Nov. 24.

Higher prices may reduce consumer spending and crimp growth in the $258 billion economy. Gross domestic product may expand by 5.2 percent to 5.6 percent this year, Bank Indonesia's Senior Deputy Governor Miranda Goeltom said on Nov. 24.

Stocks, Currency

Indonesia's key stock index fell 0.4 percent, while the rupiah gained 0.1 percent to 10,032 against the U.S. dollar.

Indonesia's economy grew 5.3 percent in the third quarter from a year earlier after gaining 5.8 percent in the previous three months. That was the slowest pace in a year.

The rupiah has risen 4.7 percent against the U.S. dollar from its four-year low on Aug. 30 after the government pledged to raise fuel prices and the central bank increased interest rates. The rupiah has fallen 7.6 percent this year, making it the second-worst performing among 15 Asia-Pacific currencies tracked by Bloomberg.

Indonesia almost tripled kerosene prices and more than doubled diesel tariffs on Oct. 1. Gasoline prices rose by 88 percent. The move will help the government cap subsidies this year at 89.2 trillion rupiah ($8.7 billion).

Exports

``We raised our prices soon after fuel prices were increased to adjust to the higher costs,'' said Agung Wiharto, an investor relations official at Semen Gresik. Energy costs account for about a third of Semen Gresik's expenses, he said.

Aneka Tambang raised salaries in September anticipating an increase in fuel prices, said Kurniadi Atmosasmito, finance director at the company.

A separate report released today showed Indonesia's exports rose 4.8 percent to $7.76 billion in October. Imports rose 10.9 percent to $4.79 billion and trade surplus widened to $2.97 billion in October from $2.48 billion a month earlier.



To contact the reporters on this story:
Arijit Ghosh in Jakarta at aghosh@bloomberg.net

[Alvin]

INDONESIA AIMING FOR US$4 BLN IN TELCO EXPORTS BY 2009

Thursday December 1, 2005, 6:49 pm


JAKARTA, Dec 1 Asia Pulse - Indonesia aims to export US$4 billion worth of telecommunications equipment in 2009, up from an estimated US$1.8 billion this year.

Director General for Transport and Telecommunications Budi Dharmadi said for that purpose the government will direct development of the country's telecommunications industry to meet international standards.

Budi said telecommunications industry will serve as one of the pillars for the country's industry in the coming years.

The telecommunications industry has expanded rapidly by 12 per cent-13 per cent annually, he told a seminar in Bandung, West Java, yesterday.

Indonesia's exports of telecommunications products include digital and static components and receivers.

Meanwhile, the Post and Telecommunications Directorate General plans to issue a regulation requiring telecommunications companies in the country to set aside 20 per cent of their annual spending for local products.

(ANTARA)

[Alvin]

Thursday December 1, 3:14 PM
Samsung Renault Eyes Indonesian Market
JAKARTA, Dec 1 Asia Pulse - Samsung Renault, South Korea's fifth largest car maker, is studying plans to exports its sedan products to Indonesia.
Indonesian Ambassador to Korea Jakob Tobing said if the plan comes to reality, Indonesia will be Samsung Renault's first market in Southeast Asia.

Tobing said Samsung Renault has carried out a market study in the country over the past year.

Other South Korean car firms Hyundai, Kia, Daewoo and Ssangyong already have a presence in the country.

(ANTARA)

[Zorobabel]

I don't understand how the inflation is so high. Unleaded gas prices in countries without subsidies have more than doubled in the last two years, yet no country has had 18% inflation cumulative in those two years simply because of increased prices (6% at the max). Many other countries have had to lift their subsidies and they aren't facing the same problem. I remember some buses were doubling their fares after the 29% fuel price increase when they should have only increased the fares 20% (fuel is only one of the expenses of buses). I think there is massive, widespread price gouging going on around the country as companies try to keep the same profit margins as they did under the days huge subsidies rather than conforming to a global standard. On the other hand, it obviously should have been phased. 25% in January as prices started to soar, 25% in March, 25% in May, etc.

[Blue_Sky]

^^
You want to know the answer??
Its our government itself with their big mouth

Penerimaan Pajak Meningkat Gaji PNS Akan Dinaikkan 55%Kemas Irawan Nurrachman - detikNews

Jakarta - Pegawai negeri sipil (PNS) boleh tersenyum lega. Pemerintah berencana menaikkan gajinya hingga 55 persen tahun depan. Kenaikan gaji itu akan diambilkan dari penerimaan pajak yang meningkat 3 kali lipat.
Demikian disampaikan oleh Menteri Negara Pendayagunaan Aparatur Negara (Menneg PAN) Taufik Effendi saat menjadi inspektur upacara penutupan peringatan HUT ke-34 Korpri di Tugu Proklamasi, Jalan Proklamasi, Jakarta Pusat, Selasa (29/11/2005).
"Insya Allah tahun depan kita akan menaikkan gaji PNS, khususnya golongan I dan II yang dulu gaji terendah Rp 680 ribu menjadi Rp 1,060 juta," kata Taufik.
Ditambahkannya, dana tersebut akan diambil dari APBN tahun 2006, khususnya dari sektor penerimaan pajak. Sebab, tahun ini penerimaan pada sektor pajak meningkat 2-3 kali lipat.
Dalam kesempatan itu Taufik mengingatkan kepada PNS agar selalu bersikap netral. "Jangan sampai ditarik ke sana ke mari oleh kekuatan politik mana pun," ujarnya di hadapan 1.500 perwakilan PNS dari berbagai departemen dan lembaga nondepartemen.
Sekjen Depdagri Progo Nurjaman menambahkan, sikap netral PNS ini sesuai dengan UU Pemilu tentang hak untuk memilih dan dipilih. (san)


janji surga........
begini ini yang bikin inflasi......

[Alvin]

I don't understand how the inflation is so high. Unleaded gas prices in countries without subsidies have more than doubled in the last two years, yet no country has had 18% inflation cumulative in those two years simply because of increased prices (6% at the max). Many other countries have had to lift their subsidies and they aren't facing the same problem. I remember some buses were doubling their fares after the 29% fuel price increase when they should have only increased the fares 20% (fuel is only one of the expenses of buses). I think there is massive, widespread price gouging going on around the country as companies try to keep the same profit margins as they did under the days huge subsidies rather than conforming to a global standard. On the other hand, it obviously should have been phased. 25% in January as prices started to soar, 25% in March, 25% in May, etc.

Unfortunately the government had no courage to introduce a phased fuel price increase policy. They'd rather get one massive period of demonstrations for a month or two, than continuous demonstrations/protests throughout the year, that would be potentially disastrous , both for political stability and the markets..

I hope oil prices will ease to around US$50-55 next year, that would give the govt budget some breathing space and hopefully no more fuel price increase is necessary.

[Alvin]

Thursday December 1, 8:44 PM
UPDATE: Indonesia Rate Hike Looms After Nov CPI Surge
By Phelim Kyne
Of DOW JONES NEWSWIRES


JAKARTA (Dow Jones)--Indonesia's consumer prices surged 18.38% in November compared with a year earlier, threatening the government's economic growth targets and all but ensuring another increase in key interest rates, economists said.

The Central Statistics Agency Thursday said the huge jump in the consumer price index, which follows a 17.89% year-on-year rise in October, was largely due to the increase in fuel prices, which the government more than doubled, on average, on Oct. 1.

The combination of inflationary pressure and rising interest rates casts doubt over the Indonesian economy's capacity to meet official growth targets. The government was aiming for 6.0% economic growth this year over the previous year and 6.2% growth in 2006.

However, month-on-month inflation eased to 1.31% in November from 8.70%, prompting some economists to say that the economy was beginning to recover from the shock of higher fuel prices.

"Bank Indonesia will still have to raise rates by 75 basis points to 100 basis points...but they'll have to carefully balance rate hikes with growth, because gross domestic product has already slowed and will slow further next quarter," said DBS Bank analyst Euben Paracuelles.

The central bank raised its benchmark Bank Indonesia rate 125 basis points to 12.25% on Nov. 1, in response to the surge in October's CPI.

The combination of high inflation and rising rates is choking domestic consumption, which traditionally delivers around 70% of Indonesia's total annual GDP, said Song Seng Wun, CIMB-GK Research Pte. Ltd.'s vice president of regional economics.

"For full-year 2005 we're looking at 4.8% GDP growth on the...lag effect of the monetary tightening filtering through the economy," Song said.

"Probably GDP in the first half (of next year) will continue to slow down and 2006 GDP (growth) will be under 5.0%."

Bank Indonesia Governor Burhanuddin Abdullah said Wednesday that Indonesia's economy will expand by between 5.5% and 6.0% in 2006.

For the third quarter, Indonesia posted 5.34% growth in GDP compared with a year earlier.

Monthly Inflation Gives Note Of Promise

But the fact that the rate of inflation slowed in November compared with October indicates that the economy is already starting to recover from the October fuel price increases, Merrill Lynch analyst Arthur Woo said.

"I don't think (Bank Indonesia) should be panicking...because (a CPI increase) within the range of 17.0% to 18.0% on-year is a pretty good result," Woo said.

"It doesn't mean the central bank is off the hook in terms of raising rates...but I don't think they'll be under pressure to jack them up," he said.

Woo expects the Bank Indonesia rate to rise by less than 100 basis points in the days ahead, in reaction to November's inflation data.

The central bank expects inflation to hover around 15.0% year-on-year until August, and then slide to a year-end level around 7% or 8%.

Indonesia's policymakers were likely heartened by a 20% rise in the country's trade surplus in October compared with the previous month. Exports rose 5.1% from the previous month to $7.76 billion.

The trade data is good news for Indonesia's efforts to give its currency, the rupiah, traction against the U.S. dollar, HSBC regional foreign exchange strategist Richard Yetsenga said in a research note.

The rupiah sank to a more-than-two-year low of 11,900 against the dollar in intraday trading in August. A fiscal and monetary rescue package has since helped the currency to stabilize around the IDR10,000/dollar level.

The dollar ended trading at IDR10,033 Thursday, up from Wednesday's close of IDR10,025.

"The trade account continues to show the benefits of a return to market-driven fuel pricing...(so) against a settled global backdrop, (the) USD/IDR's stability is likely to persist in the near term," Yetsenga said.

"On a volatility-adjusted basis, (the) USD/IDR currently presents the most favorable risk reward in Asia-Pacific," he said.

[sanhen]

yea but if phased, you are risking more than one demonstration, that will get bigger and bigger by day as the anger accumulate.

[Zorobabel]

I'm not speaking from the political standpoint, but rather the economic one. Each have their own issues.

[bahar]

I think it has more to do with expectations from the masses/business. The process of fuel hikes is VERY SLOW. There is ample room for them to raise prices irrationaly with expectation that their costs will raise. As Blue_sky has pointed out, the government's "mouth" is so big. They announced that the government will raise civil servant salary this coming January at about 55% (1 month to go). Who the hell will not predict that business expenses will not raise in tandem. Hence, there's no way for them to lower their selling price now. You are also right to say that some of them are simply maintaining their high profit margin. But again, who want to lower profit margin when the business environment is uncertain, hence higher risks.

It's time for us to abolish inflexibility in comodity prices (so that prices adjust automatically and our economy not hijacked by painful fuel prices adjustment) and let derivative market to develop (so that businesses can hedge their risks more efficiently).

[David-80]

The stocks market surges 2.1% and rupiah breaks 9,900 level because Budiono (former finance minister) will get his position back as economic minister (or rather finance minister). It seems the market loves him so much.

President just announced this evening on a sudden press conference in Medan

cheers

[David-80]

Here is the related news.

Indonesian Shares End +2.1% On Cabinet Reshuffle Hopes -2
(MORE TO FOLLOW) Dow Jones Newswires

December 02, 2005 04:03 ET

Indonesian Shares End +2.1% On Cabinet Reshuffle Hopes

JAKARTA (Dow Jones)--Indonesian shares ended sharply higher Friday, boosted by news that President Susilo Bambang Yudhoyono is planning to reshuffle his cabinet, particularly the economic team, to improve the country's economy, dealers said.

The Jakarta Stock Exchange Composite Index ended up 2.1%, or 23.046 points, at 1119.417.

Yudhoyono said Friday he has invited former finance minister Boediono to join his cabinet's economic team.

"The (potential) presence of Boediono (in the cabinet) convinces me that he could manage the macroeconomy better," he said.

Analysts said expectations that Boediono will be reappointed as finance minister spurred buying as he is considered to have good track record.

Boediono - who like most Indonesians has only one name - served as finance minister under Yudhoyono's predecessor, Megawati Sukarnoputri. He is credited with pulling Indonesia out off an International Monetary Fund emergency borrowing program at the end of 2003.

"Boediono is the right man in the right place and most investors expect he would be able to improve the nation's economy," said Mohammad Reza, an analyst with Kuo Capital securities.

(MORE TO FOLLOW) Dow Jones Newswires

[David-80]

I am happy that, Budiono will join the economic team. I dont care Indonesia football losing 3-1 to Thailand, as long Budiono will get his job back!

cheers

[bahar]

Haha... I share your joy. He speaks carefully and only when necessary.

[XxRyoChanxX]

that's good to hear

[tata]

from many news, looks like businessmen welcome very much Boediono.
So, what went wrong with Bakrie?

[Alvin]

from many news, looks like businessmen welcome very much Boediono.
So, what went wrong with Bakrie?

too much business interests...

[Fir3blaze]

too much business interests...

Besides, the qualities that makes a good economic minister is not the same as what makes a good businessman. I have confidence in Boediono, looking at this past performance and his credentials.

[David-80]

According to JSX, Bakrie company post a net profit this year, after several years of net losing. So, like Alvin said, its only for his business interest.

While for the finance minister (Jusuf Anwar)..hes not friendly to the media and social communities and speaks too much.

cheers

[Fir3blaze]

I'm personally appaled at the proposal for the tax law amendments. It will be a BIG problem if it's passed at the current state. So, I hope Boediono will get to be the finance minister, and do a swooping reform on the tax law. :) I know that's a big hope, but if we were to win the fight against corruption we need to have a simple but effective tax regime. Not complicated laws full of loopholes for collusion between officials and taxpayers. If this gets done, I believe that the economy will fare MUCH better in the medium to long term.

About Bakrie, we can only guess what he have been doing all these while. But looking at how close he is to Kalla, it seems that he will remain in the cabinet for now, maybe with a new post outside the economic team.

[Alvin]

Well, the latest goss has it that Boediono will be new Coordinating Minister for Economy (replacing Bakrie) and Kepala Bappenas (replacing Sri Mulyani), while Sri Mulyani will be new Finance Minister, Bakrie will get new post as Coordinating Minister for Welfare. Boediono and Sri Mulyani together would be a strong team with a good rep in the international community. But keeping Bakrie in the economic portfolio is just not an option as Bakrie and Boediono have different priorities, they just can't work together.

[Alvin]

Expectations high but Budiono no miracle worker, analysts say
Urip Hudiono, The Jakarta Post, Jakarta

Improving coordination among the economic ministries and the management of the state budget is what analysts say former finance minister Boediono must immediately do upon his return to government in order to put the economy on the right track again.

"There are two important things that Boediono -- or whoever will be appointed as finance or chief economics minister -- must prioritize now," economist Kahlil Rowter of Mandiri Sekuritas told The Jakarta Post.

"The first is to better coordinate the government's fiscal policies with the central bank's monetary policies; the second is to maintain stability in the country's financial sector -- in the mutual funds market, for example -- which has more or less affected investor confidence and caused volatility in the rupiah."

Kahlil explained that as Bank Indonesia (BI) was at present maintaining a tight monetary policy by hiking interest rates to cope with the current rise in inflation, the government also needed to be contractionary in its fiscal policies.

Although acknowledging the need for more government spending to help spur economic growth, which has been slowing down due to rising inflation and interest rates, Kahlil warned that an expansionary budget should only be pursued if this was in line with BI's policies.

"This year's unspent budget allocations should not be disbursed all at once within the first semester of next year in order to avoid disrupting the macroeconomic stability that is currently being rebuilt," he said.

Standard Chartered Bank economist Fauzi Ichsan, however, said that it was increasing government spending that Boediono needed to focus on for the sake of higher economic growth, as well as pushing ahead with reform, including more privatization.

In a plenary session of the Indonesian Science Academy on Saturday, Boediono presented a paper assessing the current economic situation, in which he underlined the importance of political and economic harmony, as well as coherent policies within the government's economic team, if macroeconomic stability was to be achieved.

He also warned that macroeconomic stability should never be take for granted, and that prudent budgetary policies, including reducing the deficit and debt stock, should always be pursued. It was also essential to press ahead with reform in the area of governance.

A former central bank deputy governor and National Development Planning Agency (Bappenas) chief, Boediono is expected to have no difficulty in working together with BI and other state officials, as he did during his term as finance minister under the previous government.

Market analyst Dandossi Matram, however, said it was still too early to know what to expect of Boediono as his position in the Cabinet was still not clear.

He said that the positive market reaction following President Susilo's announcement that he had invited Boediono to join his Cabinet's economic team had more to due with the perception that Susilo was on the right track in his Cabinet reshuffle plans to improve the economy, rather than the "Boediono factor" itself.

"The markets will still wait and see what really comes of the reshuffle," he said, adding that Susilo's still vague reshuffle announcement was "merely testing the market."

Bank Negara Indonesia (BNI) analyst Ryan Kiryanto cautioned the public and the markets not to pin their hopes too high on Boediono as a macroeconomic savior. "Economic performance will depend on the cooperation and teamwork of the whole economics team, not Boediono alone."

[Alvin]

Indonesia Tetap Dianggap Paling Korup se-Asia
Senin, 05 Desember 2005 | 15:03 WIB

TEMPO Interaktif, Singapura: Indonesia masih dianggap sebagai negara paling korup se-Asia. Demikian hasil riset Political and Economic Risk Consultancy (PERC), yang diumumkan di Singapura, Senin (5/12).

Pada survei yang dilakukan terhadap 96 eksekutif luar negeri di 12 negara Asia itu, Indonesia memperoleh skor 9,44 (dari skala 10, dengan 0 paling bersih dan 10 paling korup). Singapura menempati posisi tertinggi dengan skor 0,89, disusul Hong Kong dengan 1,22.

Urutan berikutnya adalah Korea Selatan, Malaysia, Taiwan, Thailand, Cina, India, Filipina, dan Vietnam.

Di Indonesia, menurut PERC, korupsi masih menjadi halangan terbesar bagi masuknya investor luar negeri. Namun, lembaga itu menghargai usaha Presden Yudhoyono untuk memerangi korupsi.

"Ada sejumlah pejabat yang ditahan atau diadili, dan ini menimbulkan harapan bahwa satu hambatan terbesar untuk berbisnis di Indonesia, yakni korupsi, mulai dikurangi," demikian PERC.

Menurut PERC, kuatnya sistem hukum di Singapura dan Hong Kong membuat investor terus datang ke nagara itu meski biaya tenaga kerja di negara lain lebih rendah.

"Tenaga kerja jauh lebih murah di negara-negara tetangga. Selain pelabuhan yang baik, fasilitas infrastruktur berkelas dunia, dan tenaga yang terdidik, Singapura dan Hong Kong pun tak memiliki sumber daya untuk menarik investor," demikian menurut PERC. AFP

[macgyver]

Well, the latest goss has it that Boediono will be new Coordinating Minister for Economy (replacing Bakrie) and Kepala Bappenas (replacing Sri Mulyani), while Sri Mulyani will be new Finance Minister, Bakrie will get new post as Coordinating Minister for Welfare. Boediono and Sri Mulyani together would be a strong team with a good rep in the international community. But keeping Bakrie in the economic portfolio is just not an option as Bakrie and Boediono have different priorities, they just can't work together.

But , Ibu Ani is more specialized in Macro Economics don't you think ?

[macgyver]

http://jkt.detikfinance.com/indexfr.php?url=http://jkt.detikfinance.com/index.php/detik.read/tahun/2005/bulan/12/tgl/05/time/174526/idnews/492622/idkanal/5

[David-80]

Tonight is the night for the reshuffling...


Indonesia cabinet changes to be announced Mon -VP


JAKARTA, Dec 5 (Reuters) - Changes to Indonesia's cabinet will be announced on Monday night, Vice President Jusuf Kalla said on El Shinta radio.
Kalla declined to give specific details but the president has said he would make some changes to his embattled team of economic ministers.

[David-80]

Just being announced, 2 minutes ago.

FInance minister = Sri Mulyani
Economic minister = Boediono
Welfare and social minister = Bakrie
Industry minister = Fahmi Idris
Indonesia-middle east relations = Alwi Shihab

there are two more who i forgot...you can just check newspaper tomorrow

cheers

[Alvin]

POST-RESHUFFLE ECONOMIC TEAM:

Coordinating Minister for Economy: Boediono
Finance Minister: Sri Mulyani
Industry Minister: Fahmi Idris
Labor Minister: Erman Suparno
Menpan: Paskah Suseta

[Alvin]

you just beat me to it, David ;)

[David-80]

hahaha, i forgot you also in Indo right now. Btw..what do you guys think of these cabinets? seems the bappenas minister is from Golkar party. Other, such as Budiono and sri mulyani..that makes them a superb duo.

cheers

[Alvin]

^^ I'm not in Indo..haha just got an sms from my mother about it.

Sri Mulyani and Budiono are the best choices for macroeconomic management (based on what I gather), and they belong to the same school of thought (conservative/prudent monetary & fiscal mgt), so I can see them being a solid duo, as u said david.

[macgyver]

Just being announced, 2 minutes ago.

FInance minister = Sri Mulyani
Economic minister = Boediono
Welfare and social minister = Bakrie
Industry minister = Fahmi Idris
Indonesia-middle east relations = Alwi Shihab

there are two more who i forgot...you can just check newspaper tomorrow

cheers

Do you think Fahmi Idris is good ? He was a minister before right ?
and
Alwi Shihab, would it bring the friction as the PKB now is still " nggak akur" ?

[David-80]

You right, Fahmi idris was also a minister before, i think he was in charge with the job and workforce department. Not a really good minister. I assume, he got his job to secure some parties supports for the president.

Alwi shihab, i think the reason The president kept him, its also to get the support of PKB, eventhough, PKB is falls apart right now.

So other than the economic team, the other resuffling are just to gain supports from the political parties.

cheers

[tata]

Bakrie still in the cabinet?

[David-80]

Yes, and remarkably, Sugiharto is also still in the cabinet too. Bakrie and Sugi are known to have personal conflict and not too friendly with each other. For instance, Sugi was asking the government not to build the pipeline for gas in Kalimantan because it would be a waste of money, considering it will suck a lot of money to maintain its pipeline. But Bakrie or famously known as Ical said that the construction of pipeline will push through, despite the opposition from BUMN department, in this case Sugiharto.

cheers

[tata]

Since when we dont have 'Menteri Muda' anymore?

[sanhen]

The new cabinet is better than the old one? Dont you think?

[bahar]

I think it's better.

[Zorobabel]

Boediono got his PhD from the Wharton School at the University of Pennsylvania. He must be pretty smart.

[Alvin]

Jakarta revamps economy team

Monday, December 5, 2005; Posted: 10:53 p.m. EST (03:53 GMT)

JAKARTA, Indonesia (AP) -- Indonesia's incoming economy minister says he will make tackling domestic inflation and interest rates a priority, acknowledging they are "too high."

"I'm going to cooperate with the monetary authorities to determine ways to deal with the problems (of high inflation and interest rates)," Boediono said Tuesday without elaborating.

President Susilo Bambang Yudhoyono announced a shake-up of his Cabinet's economic team late Monday, saying the highly respected Boediono, who like many Indonesians goes by one name, would replace Aburizal Bakrie as coordinating minister for the economy.

Sri Mulyani Indrawati was named finance minister, replacing Jusuf Anwar.

The long-anticipated announcement came amid rising public anger over the perceived mishandling of Indonesia's economic policy in the last 12 months, and was expected to cheer markets and financial analysts.

Boediono served as finance minister under Yudhoyono's predecessor, Megawati Sukarnoputri, and is credited with weaning Indonesia off an International Monetary Fund emergency borrowing program at the end of 2003.

Analysts have said surging inflation, which followed a government decision to more than double average fuel prices on October 1, and rising interest rates threatened to undermine official economic growth targets of 6.0 percent and 6.2 percent for 2005 and 2006, respectively.

Indonesia's central bank responded on November 1 by hiking its benchmark Bank Indonesia rate by 125 basis points to 12.25 percent, with another increase expected on Tuesday.

"The current inflation and interest rates are too high," Boediono told Dow Jones Newswires late Monday.

"There is a normal way to fight inflation, which in turn can prevent interest rates from rising."

[Alvin]

Jakarta reshuffle set to cheer markets
By Shawn Donnan in Jakarta
Published: December 6 2005 00:20 | Last updated: December 6 2005 00:20

http://us.news3.yimg.com/us.i2.yimg.com/p/rids/20051206/i/r88364889.jpg?x=243&y=345&sig=OtqGTsdvFfQ5UABdD1Yyzw--

Indonesia's new finance minister, Sri Mulyani Indrawati, last night said boosting government spending would be one of her top priorities and signalled she would revisit a controversial draft tax law that has drawn the ire of the business community.

The US-educated economist's appointment by President Susilo Bambang Yudhoyono last night came in a cabinet reshuffle that saw a respected former finance minister, Boediono, take over as chief economic minister from the former tycoon Aburizal Bakrie.

Although it includes only three fresh faces, the cabinet is likely to be welcomed by financial markets and bolster the credibility of Mr Yudhoyono's 13-month-old government which has struggled to enact promised reforms.

In an interview with the Financial Times, Mrs Indrawati, who had been national development planning minister, said a top priority would be improving the efficiency of government spending, an allusion to Jakarta's budget being in technical surplus through to October despite a projected deficit of 1 per cent or more of gross domestic product this year.

“If you look at our fiscal situation, both on the revenue side and on the expenditure side, we need to be more effective. From our most recent experience, when we have the money we cannot spend it quickly and effectively.”

With Indonesia’s long tradition of conservative fiscal policy, economists say a big widening out of Jakarta's budget deficit is unlikely.

But economists foresee an increase in government spending, particularly on infrastructure, as key to avoiding a slowdown caused by the higher inflation and interest rates yielded by a doubling of government-set fuel prices on October 1.

Mrs Indrawati said she would review the controversial tax law, which is stalled in parliament because of opposition from the business community which views it as too punitive.

“I think we should look at the substance more carefully,” she said.

The mild-mannered Boediono's appointment as chief economic minister will bring a shift in tone to the face Jakarta presents to international financial markets. As finance minister in the last government, he brought macroeconomic stability to an Indonesia struggling to recover from the 1997-98 Asian financial crisis.

[Alvin]

New Indonesia economy chief seeks stability, growth
Tuesday 6 December 2005, 4:49am EST

By Adriana Nina Kusuma and Adrian Syahputra

JAKARTA, Dec 6 (Reuters) - Indonesia needs to stimulate economic growth while keeping inflation in check and the rupiah stable, incoming chief economics minister Boediono said on Tuesday.

His first remarks since being appointed on Monday came just before the central bank raised interest rates by 50 basis points, half the amount expected, with some analysts saying the positive market reaction to his return to office had taken pressure off the monetary authorities.

Boediono won acclaim as finance minister under a different administration from 2001-2004 for prudent policies that stabilised the economy and led to big cuts in interest rates.

"The point is how to strengthen economic stability, including inflation and the currency exchange rate, while at the same time stimulating the economy," Boediono told reporters when asked what his first steps would be now that he was back in office.

The widely respected technocrat also said the government wanted to improve coordination with the central bank.

President Susilo Bambang Yudhoyono appointed Boediono late on Monday as part of a reshuffle of his embattled team of economic ministers. Tho changes included shifting Planning Minister Sri Mulyani Indrawati across to the portfolio of finance minister.

Markets welcomed the cabinet news. The rupiah hit a one-month peak at about 9,910 per dollar before dipping slightly to around 9,920 after the interest rate news.

Jakarta's main share index ended up 0.25 percent.

Analysts said the better sentiment was one reason the central bank had raised its benchmark one-month interest rate

(BI rate) by only 50 basis points to 12.75 percent, half the full-point increase expected by the market after a recent surge in inflation.

"I think sentiment is good right now. Perhaps this has eased pressure on the central bank to aggressively hike interest rates, although they still need to be increased," said economist Agus Priyambada of brokerage Trimegah Securities.


GROWTH TARGET TOUGH

New Finance Minister Indrawati said Indonesia's 2006 economic growth target of 6.2 percent would be tough because of soaring inflation. She predicted growth of 5.5 percent this year.

Indrawati told a news conference the budget deficit for next year could rise to 1.1 percent of gross domestic product, compared with a target of 0.7 percent.

"The growth target of 6.2 percent is reachable but will not be easy. There are some factors we need to watch," Indrawati said, adding that inflation and domestic investment needed to be monitored closely.

She said annual inflation was likely to stay in double digits next year but would start to come down.

Consumer prices rose 18.38 percent in November from a year earlier, up from 17.89 percent in October and 9.06 percent in September before domestic fuel prices jumped.

The government raised prices by an average of 126 percent on Oct. 1 to reduce a fuel subsidy bill that had ballooned due to soaring international oil prices.

Boediono replaces Aburizal Bakrie, who has moved to the job of chief social welfare minister. Indrawati replaces Jusuf Anwar, who is no longer in the cabinet.

(With additional reporting by Yoga Rusmana and Nury Sybli)

[tata]

Indonesia Tetap Dianggap Paling Korup se-Asia
Senin, 05 Desember 2005 | 15:03 WIB


see the scandal in Indonesian Embassy in Sweden and Malaysia? The immigration charge more to Sweden tourists who ask for visa to Indonesia. And in Penang and KL they charge more than normal fee to TKI.

Both foreign tourists and TKI (=Indonesian Labor) are one of the most important source for foreign exchange for us. Some people are shamelessly sucking their blood.

What a shame!

[MARINHO]

Yes, and remarkably, Sugiharto is also still in the cabinet too. Bakrie and Sugi are known to have personal conflict and not too friendly with each other. For instance, Sugi was asking the government not to build the pipeline for gas in Kalimantan because it would be a waste of money, considering it will suck a lot of money to maintain its pipeline. But Bakrie or famously known as Ical said that the construction of pipeline will push through, despite the opposition from BUMN department, in this case Sugiharto.

cheers

CONFLICT OF INTEREST!!! MR. Bakrie familie owns Bakrie Brothers and nthat company is participating in the moneywasting project.

It is a shame!!!

[jaystar]

gw denger misalnya mau kawin ama org bule org indo sekarang harus bayar bener gak???

[macgyver]

gw denger misalnya mau kawin ama org bule org indo sekarang harus bayar bener gak???

Indo cewek ama bule cowok : 50 K :D
Cuma issue kayaknya sih ...
but ..
kondisi elu khan lain ... he he he indo cowok ma bule cewek ;-)
Go get her man .. he he he

[jaystar]

gak gw gak harus bayar gw kan udah lama tinggal di jerman jadi gw gak perlu visa...

aduh parah banget kok harus bayar si???

[Alvin]

Credit Suisse Plans Indonesia Private Banking Office

Wednesday December 7, 2005, 8:18 pm

DJ Credit Suisse Plans Indonesia Private Banking Office



SINGAPORE (Dow Jones)--Credit Suisse (CSR) plans to open an office in Indonesia targeting high net-worth individuals as the country's fast-growing pool of wealthy could make it Southeast Asia's most lucrative private banking market, a senior executive said.


The Swiss bank has been encouraged by a period of relative political stability and a rebound in the Indonesian economy, Joachim Straehle, head of international private banking operations, told Dow Jones Newswires in a recent interview.


He wouldn't say when the office will be opened.


Credit Suisse already has investment banking operations in Indonesia, Southeast Asia's most populous nation and biggest economy.


Indonesia's private wealth assets managed by banks are estimated at $148.58 billion in 2003, according to the Global Wealth 2004 report by the Boston Consulting Group, up from $125.086 billion in 2002.



-By Saeed Azhar, Dow Jones Newswires;

[Alvin]

Wednesday December 7, 5:46 PM
Indonesian Shares End Up On Hopes Economy Will Improve

JAKARTA (Dow Jones)--Indonesian shares ended sharply higher Wednesday, boosted by the strong rupiah amid high hopes that the country's new economic ministers would be able to rein in current high inflation while keeping interest rates at reasonable levels, dealers said.

"Investors welcomed the new Cabinet which looks more solid and expect the economy to rebound next year," said Katarina Setiawan, the head of research department with Kim Eng Securities in Jakarta.

ADVERTISEMENT


She, however, warned that the rally won't be sustained in the following session and expects price corrections after the main index rose 5.1% in the previous six sessions.

The Jakarta Stock Exchange Composite Index ended up 2.5%, or 27.930 points, at 1151.365, the highest close since Aug. 15.

Gainers led decliners 121 to 24, with 63 stocks unchanged. Volume rose to 2.2 billion shares valued at IDR1.8 trillion, compared with 1.05 billion shares valued at IDR1 trillion Tuesday.

Indonesia's new chief economics minister said Wednesday that he will try to maintain the stability of the rupiah against the U.S. dollar to help curb inflation.

"We will strive to maintain the stability of the rupiah so that it can automatically prevent prices from rising," Coordinating Minister for the Economy Boediono told reporters after being officially sworn in.

Dealers also attributed buying to expectations that the rupiah would continue to strengthen against the U.S. dollar.

The firmer rupiah could reduce financial burdens of many companies that import raw materials and that have dollar-denominated debts.

The dollar ended down at IDR9,825, the lowest since Aug. 12, due to expectations of improved economy.

Telecommunication, banking and automotive blue chips led gainers on foreign buying. Bellwether Telkom rose 3.6% to IDR5,800 on expectations of solid 2005 earnings and after its American depositary receipts in New York rose 3% to $23.21.

Telkom's rival Indosat gained 0.9% to IDR5,750.

Bank Mandiri, the nation's largest lender by assets, rose 6.4% to IDR1,490 after the company said it is setting up a special purpose vehicle to manage its non-performing loans worth around IDR26 trillion. Analysts expect the move will reduce bank's gross non-performing loan ratio, which stood at 24.57% as of Sept. 30.

Meanwhile, Bank Danamon gained 6.8% to IDR4,300 and Bank Rakyat rose 2.6% to IDR3,000 on expectations of improved 2006 financial performance.

Dealers said they expect shares to trade slightly higher in the next session, with profit-taking likely to limit gains.

[Alvin]

SBY gets down to business
By Marianne Kearney, TODAY
First Published 7 Dec 2005

Markets and analysts cheered President Susilo Bambang Yudhoyono's long awaited cabinet reshuffle on Monday night, predicting the newly appointed economic team would help curb Indonesia's soaring inflation and promote investment.

The president appointed two highly respected technocrats to head his economic team; Mr Boediono as Co-ordinating Finance Minister, and Ms Sri Mulyani Indrawati as Finance Minister.

Ms Sri Mulyani, 43, was the former executive director for International Monetary Fund (IMF) in Southeast Asia, before becoming State Planning Minister in Mr Susilo's government.

She was originally slated to become the finance minister last October, but was sidelined when nationalist politicians objected to Ms Sri Mulyani's connections to the IMF. The international body admitted last year that its tough economic reforms demanded as part of a billion dollar bail-out, worsened Indonesia's 1997-98 economic meltdown.

American-trained Mr Boediono, who was finance minister under the previous administration was praised for establishing macro-economic stability between 2001-2004, and is expected to turn-around the country's lacklustre foreign investment climate.

"It's what markets wanted," said Mr Fauzi Ichsan, economist for Standard Chartered in Indonesia.

"What Boediono can do is bring credibility to the economic team and promote an investment climate that provides a level playing field for foreign investors not just well connected local investors," added Mr Fauzi.

The former economic co-ordinator, Mr Aburizal Bakrie, a businessman whose conglomerates were bailed out in the 1997 financial crisis, was widely criticised for failing to reform tax laws, and resolve long running dispute involving western investors, such as the one between oil giant Exxon Mobil and state oil company Pertamina, over the Cepu oil field.

Given slowing growth rates, and surging inflation, which hit 18 per cent year on year in November, Mr Susilo had little choice but to replace his economic team which had been criticised as ineffectual and uncoordinated, said Mr Fauzi.

Under Mr Boediono's guidance Jakarta will be able to keep a lid on government spending, helping to curb inflation, said analysts.

The move should boost Mr Susilo's popularity, who was in danger of losing much of his support base, after raising fuel costs, which coupled with inflation, has caused the cost of living to skyrocket.

"Before I could feed my family on rupiah 600,000 ($100) a month but now I go to the market and I can hardly buy anything. Food, petrol everything is too expensive," said Mr Ona, a labourer and father of four in Benhill, central Jakarta. He complained that since Mr Susilo raised fuel prices he had to send his family back to his village in central Java, where schooling and food are cheaper.

"Susilo is no good, he's the same as all the others," he said.

Mr Susilo was voted into office in a landslide election last year, with the man on the street hoping he would improve Indonesia's economy. But with 50 per cent of the population living below or just above the poverty line, many were becoming increasing dissatisfied with a president who appeared to be making life even harder for those at the bottom.

However in shaking up the cabinet the President also had to balance powerful political interests, which may prove a thorn in any economic team's side.

Mr Aburizal Bakrie, a powerful businessman, is close to Vice-President Jusuf Kalla, who heads the parliament's largest party, Golkar.

"Jusuf is not happy with the change as it his reducing his economic policy making role," said Mr Umar Juoro, an analyst at the Centre for Strategic Studies. However giving Golkar two ministerial portfolios - Industry and State Planning - had somewhat mollified the party.

Mr Aburizal was not entirely kicked out of the cabinet but nor was he given a powerful post. Traditionally the position of Co-ordinating Social Welfare Minister has not been seen as an important post, and Mr Bakrie along with Mr Kalla could still try to interfere with economic policy making warned Mr Umar.

"Economic ministers are not as free as they were during Suharto's time, because now parliament is very powerful," said Mr Umar. "And Mulyani will need Jusuf to get budgets past parliament, whilst Boediono won't have as much freedom as he would like," he added. - TODAY

[tata]

She was originally slated to become the finance minister last October, but was sidelined when nationalist politicians objected to Ms Sri Mulyani's connections to the IMF. The international body admitted last year that its tough economic reforms demanded as part of a billion dollar bail-out, worsened Indonesia's 1997-98 economic meltdown.


too late. not only it worsened but also destroyed it. Just make sure that it's the first and the last time they did it.

IMF= I'M Finished, I'M F*****-up, I'M Fired
a joke though

[Zorobabel]

The success of IMF's bail-out program relied on proper implementation by the Indonesian government. To blame the complete disaster that happened afterward soley on the IMF is simply a misunderstanding of the history. If the so-called nationalist politicians seek to demand responsibility and object to other leaders who might be connected to the crisis Ms. Mulyani would be about #150 on the list. Many cronies of the New Order and countless businessmen are alone more responsible than the IMF. Not to mention the fact that the IMF is more responsible for accelerating growth among emerging economies than any other entity.

[tata]

a naughty boy riding a motorbike, very fast, making slalom acrobatics style on motorway. For sure it's wrong and breaking the law, firstly he's only a boy secondly he ride fast thirdly he was on motorway which is not for a motorbike. But the police warned nothing since they're his daddy's best friends.
One day he got an accident, got hurt badly on his knees. The doctor said, he must be amputated otherwise he's dead. He lost his two legs but he's still alive --good. Later on the doctor admit that he can be saved even without amputation. But it's too late.

Of course the boy's still alive and he promised he won't repeat his bad attitude in the past anymore. But this is done at all cost.

The same thing what happened to Indonesia, the doctor gave us wrong medicine. It's not adapted to our specific condition. It may work on other countries --I don't deny that--but doesn't mean for ALL country.

[Zorobabel]

Don't get me wrong, I'm not arguing with you, but to fix the analogy it would be as such:

The boy has just had the wreck and he's in the hospital. The doctor comes to talk to the boy before the surgery. The boy punches the doctor and starts cursing at him. He accuses the doctor of being a pawn in the Western Imperialist scheme because he practices Western medicine. The boy continues yelling at the doctor until he leaves. The boy doesn't realize it, but he has severed arteries in his legs and he is slowly bleeding to death. As he starts to slip in and out of consciousness, he calls the doctor in.

The doctor returns and does what he thinks is best: he amputes the boy's legs and he survives. The doctor gives him some morphine to help with the pain. The boy takes the morphine and sells it on the black market (first phase of bail out program). He returns to the doctor and says he is out of medicine. He takes the new morphine and sells it again, doing this a total of four times. There are consequences to his actions, though, and he is put in jail (debt at 155% of GDP). The boy eventually is rejected by the rest of the society, and he is forgotten. However, his family (Suharto cronies) keeps insisting that the doctor is at fault instead of the boy. They even go so far as to attack any nurse who worked for the doctor even though it was some seven years ago, and the doctor has an extremely impressive record.

I do think the IMF has made some mistakes, and I wasn't disagreeing with you. I just find it weird that people could seriously bring up Sri Mulyani's work at IMF as a negative aspect.

[Zorobabel]

She seems to be a true student of Keynes, the man that lead the world out of the Great Depression

---

Inflation Not Indonesian Finance Minister's First Priority

JAKARTA, Dec 7 Asia Pulse - New Finance Minister, Sri Mulyani Indrawati, said she would not be aiming to dramatically cut inflation because it could restrict economic growth and efforts to create new jobs.

The Minister said the new economic team will initially focus on reducing the negative effects of government policy that increased the cost of oil fuels in October.

Inflation reached nearly 18 per cent year-on-year in October after oil fuel prices increased by 125 per cent, and is expected to remain high until the second quarter of 2006.

The inflation jump forced observers and government officials to revise-down economic growth prediction from 6 per cent to 5.5 per cent this year.

Sri Mulyani estimated that the budget deficit in 2006 would surge to 1.1 per cent of the country's Gross Domestic Product from previously set target of 0.7 per cent.

(ANTARA)

[Alvin]

She seems to be a true student of Keynes, the man that lead the world out of the Great Depression

---

Inflation Not Indonesian Finance Minister's First Priority

JAKARTA, Dec 7 Asia Pulse - New Finance Minister, Sri Mulyani Indrawati, said she would not be aiming to dramatically cut inflation because it could restrict economic growth and efforts to create new jobs.

The Minister said the new economic team will initially focus on reducing the negative effects of government policy that increased the cost of oil fuels in October.

Inflation reached nearly 18 per cent year-on-year in October after oil fuel prices increased by 125 per cent, and is expected to remain high until the second quarter of 2006.

The inflation jump forced observers and government officials to revise-down economic growth prediction from 6 per cent to 5.5 per cent this year.

Sri Mulyani estimated that the budget deficit in 2006 would surge to 1.1 per cent of the country's Gross Domestic Product from previously set target of 0.7 per cent.

(ANTARA)

Doesn't that put her against Budiono, who wants to control inflation and restore macro-economic stability?

Actually , it does make sense. Any shock anti-inflationary measures (such as rapidly increasing interest rates) would be cause detriment to the economy that would outweight the benefits...I guess it's all just common sense, isn't it? It's all a matter of balance.

[Alvin]

Thursday December 8, 3:07 PM
Australia to Provide Indonesia With US$489 MLN in Extra Funds
ADVERTISEMENT


JAKARTA, Dec 8 Asia Pulse - Ministers in the Indonesia-Australia Joint Commission agreed here on Wednesday on the provision of new partnership funds amounting to A$660 million (US$489.1 million) to finance reconstruction and development programs in Indonesia.
"The new funds will bring the overall commitment under the Australia-Indonesia Partnership for Reconstruction and Development (AIPRD) to almost $950 million," said Australian Foreign Minister Alexander Downer.

The new commitments include additional support for Aceh`s recovery and reconstructions, major new infrastructure programs in road transport and junior secondary education, and work to boost private sector development and rural productivity, he said.

AIPRD, launched by Australian Prime Minister John Howard last Jan 5 constitute $1 billion commitment to fund reconstruction and development activities in Indonesia for the next few years.

Australian assistance for Indonesia was the largest aid package the Australian government had extended to foreign countries in the world.

Downer said AIPRD s top priority is to support Indonesia to achieve broad-based economic growth and increase emergency preparedness and response capacity as well.

He said Australian and Indonesia officials would continue to collaborate closely to identify and design high quality aid programs and projects that will contribute directly to meeting Indonesia s priority development needs.

Commission ministers also welcomed the progress made by officials in developing a Partnership Loan Agreement to govern the operation of the $500 million loan component of the AIPRD with a repayment term for 40 years.

Part of the assistance was indeed a loan, Downer said adding that the Indonesian government can repay it over the next 40 years.

Downer who was accompanied by Indonesian Finance Minister Sri Mulyani Indrawati said Australia had imposed zero percent interest on the financial assistance

Sri Mulayni said Indonesia`s obligation to repay foreign debt had become smaller over the past few years.

"Indonesia will have no problems to repay debts unless the government is not capable of maintaining the current economic momentum," she said.

In line with the Partnership Framework`s emphasis on the importance of basic infrastructure in promoting growth, the ministers agreed to support the Eastern Indonesia National Roads Improvement Project (EINRIP) through the allocation of up to $300 million in AIPRD loan funds

(ANTARA)

[Alvin]

good summary and analysis of the events of the past week.
-------------------------------------------------------------

Indonesia tries a new team
By Bill Guerin

JAKARTA - Indonesian President Susilo Bambang Yudhoyono has exerted his authority over his powerful vice president, sidelining a billionaire tycoon - who helped pave the way for their rise to power - as part of a shuffle in the economic portfolios of his cabinet.

Among other changes, Boediono, finance minister for almost three years under former president Megawati Sukarnoputri, takes over from tycoon Aburizal Bakrie in the powerful position of coordinating minister for the economy. He will oversee all economic and finance portfolios.

As a result of the shuffle, two US-educated economists, Boediono (who goes by one name) and Sri Mulyani Indrawati, take over the key portfolios in Southeast Asia's largest economy as Yudhoyono's 13-month-old government struggles to achieve higher growth needed to battle poverty and slash the huge number of unemployed.

The shake-up follows a year of soaring inflation. The Central Statistics Bureau says the latest year-on-year inflation blips of 17.89% in October and 18.38% in November are a consequence of the government's move to more than double average fuel prices in October.

The central bank raised its benchmark interest rate to 12.75% on Tuesday in an effort to stem the rising inflation that, coupled with higher interest rates, will hit domestic consumption, which still accounts for more than 60% of total annual gross domestic product. It will also undermine the government's official growth rate projection of 6% for 2005. If the economy is to sustain its momentum, a sharp boost in government spending is needed to compensate for any shortfall.

Boediono, 62, is also a former central bank deputy governor and has headed the National Development Planning Agency (Bappenas). He won praise from economists for bringing stability to the country's fiscal accounts and leading the transition out of the International Monetary Fund (IMF) emergency borrowing program.

He was appointed finance minister in August 2001. By 2003, the average rupiah rate of exchange was Rp8,572 to the US dollar, a 16.4% increase on the rate from when he joined cabinet. This was at a time when economic growth was little more than 4%.

Sri Mulyani Indrawati, 43, is the new minister of finance and thus responsible for the budget and macroeconomic policy. A former IMF executive director for Southeast Asia, she was Yudhoyono's original choice for the post when he took office but following strong opposition from nationalist politicians, some of whom see the IMF as having been partly responsible for Indonesia's struggle to recover from the financial crisis in 1997-98, she was appointed national development planning minister instead.

Other changes were: Paskah Suzetta replaced Indrawati; Fahmi Idris, formerly the manpower minister, replaced Andung Nitimiharja as industry minister; Erman Suparno replaced Idris as manpower and transmigration minister.

Political dimensions
Vice President Yusuf Kalla, who was behind last year's appointment of Bakrie, has consistently played down the need for major changes. Bakrie, a former chairman of the Indonesian Chamber of Commerce and Industry, has now been sidelined from his position of economics czar to the much-less influential position of coordinating minister for welfare, though he remains in the cabinet.

Peter Fanning, chairman of the International Business Chamber, called it a "brave move, a very positive one", though many believe the president was forced to retain Bakrie because of pressure from Kalla's camp in the Golkar Party and in parliament.

The tycoon's business links and political affiliation to Golkar, with its powerful and prominent businessmen, could have led to a conflict of interest, the argument goes. Moving Bakrie out of an economic role was a wise move because sometimes "perception is everything", said Arbi Sanit, a local political analyst and lecturer in politics at the University of Indonesia.

However, a major online news enterprise, Detikcom, quoted Arbit as saying Bakrie's new position could enable Golkar to receive big projects for the ongoing rehabilitation and reconstruction of Aceh province, devastated by the December 26 tsunami.

Though commending the appointments of Boediono and Indrawati, Sanit, however, was quoted as asking about the Bakrie appointment: "How could a capitalist person become a socialist? Only yesterday he sucks from the people, so how could he now be in charge of the people?"

Kalla may have lost face now with the sidelining of his man, but he has said the Golkar Party, which he heads, will continue to work with the government to reduce poverty and help small business. "I always think about helping the people and creating jobs."

He was pleased with the cabinet changes, which should improve macroeconomic stability, infrastructure and economic growth, he added.

However, he suggested the previous economic team should not be held to account for events that were largely out of its control, such as the record high world oil prices that caused the drastic drop in the value of the rupiah.

Yudhoyono continues to need Golkar support - the party controls 23% of seats while his Democrat Party holds only 10%. With Golkar still promising this support, the president can, in theory, be assured of winning crucial votes in the House of Representatives.

Short term
An increase in government spending, particularly on infrastructure, is expected. Indrawati said: "If you look at our fiscal situation, both on the revenue side and on the expenditure side, we need to be more effective. From our most recent experience, when we have the money we cannot spend it quickly and effectively."

Jusuf Anwar, whom she replaces, was a compromise choice in 2004. He is a career bureaucrat whose short tenure in a government committed to deliver improvements to the sensitive investment climate has produced only one tangible policy - a draft tax law. The legislation, now stalled in parliament, has been slammed by local and foreign companies as being too punitive.

Indrawati promised to review the draft. "I think we should look at the substance more carefully," she said.

Similarly, the long promised revamp of crucial foreign investment guidelines has been delayed because of opposition from within the massive army of civil servants.

The cabinet shuffle may also help free up deadlocked negotiations between ExxonMobil Corp and the state-owned oil and gas corporation, Pertamina, over the development of the $2 billion Cepu oil field, the country's largest new oil field in decades. A Pertamina official said last week the issue could be resolved through a joint venture, possibly by the end of the year.

Rowing the same boat
In a speech broadcast nationwide at the swearing-in ceremony on Wednesday, Yudhoyono called on the six new ministers to improve the macroeconomy by combating inflationary pressure, creating more jobs, accelerating infrastructure development, revitalizing maritime and agriculture industries, and reforming the state budget and taxation system.

By close of business on the same day, the local currency hit its highest level in almost four months. The Jakarta Stock Exchange Composite Index closed up 2.5%, or 27.930 points, at 1151.365, the highest since mid-August.

Asked what his first steps would be, Boediono said the aim was to strengthen economic stability, including inflation, and the currency exchange rate, while at the same time stimulating growth in the economy.

In a recent academic treatise, he said he believed the success of former president Suharto's New Order regime during the first few years was not only due to the presence of a strong economic team, but the way that team operated with the full trust and backing of the president.

"Boediono has an impressive track record and the credibility and integrity" needed to do the job, said Fauzi Ichsan, an economist for Standard Chartered Bank in Indonesia.

Success in bringing the macroeconomy under control will certainly depend to a large extent on the individual abilities of Boediono and Indrawati, and the way they work in concert with the central bank and Bappenas.

The president has no doubt about what is needed. "I want this cabinet to become more effective, have better teamwork and better coordination," he said Wednesday.

The most pressing need of all, then, is for the government to generate the three essentials lacking in every administration since the downfall of Suharto: teamwork, coordination and leadership.

Bill Guerin, a Jakarta correspondent for Asia Times Online since 2000, has been in Indonesia for 20 years, mostly in journalism and editorial positions. He has been published by the BBC on East Timor and specializes in business/economic and political analysis related to Indonesia. He can be reached at softsell@prima.net.id

(Copyright 2005 Asia Times Online Ltd. All rights reserved. Please contact us for information on sales, syndication and republishing .)

[macgyver]

Haaahh .. at last .. :D
Mahathir Vision of EAEC .. that is not supported by the US.
Come true ... :-)


Asian powers reach tentative agreement on economic community
08/12/2005 - 1:12:28 PM

Diplomats preparing for the inaugural East Asia Summit in Malaysia today reached a tenuous agreement on a grand plan to eventually create a cohesive economic community across the disparate region.

At issue was how deeply integrated the community should be and how fast it should be created, and whether it should be driven by the summit’s sponsor, the 10-nation Association of South-east Asian Nations.

India’s insistence on firm commitments to integrate in a pan-Asian economic community had for months held up finalisation of a declaration diplomats were preparing for leaders at the 16-nation summit.

But hectic negotiations resolved the problems at the senior officials’ level, both sides said. But the declaration remains open for debate and alterations by foreign ministers who will meet before the summit, and even by leaders, said diplomats.

“We’re very happy everyone agreed to the Kuala Lumpur declaration on East Asia summit including India. India is in the process, so there is no more problem,” said Malaysian Foreign Minister Syed Hamid Albar.

An Indian diplomat confirmed Syed Hamid’s comments. “Everything has been sorted out. Just some finishing touches have to be given here and there,” he said.

He said India also has no objection to ASEAN being “in the driving seat” to lead the initiative.

The East Asia Summit comprises ASEAN, Australia, China, India, Japan, New Zealand and South Korea. ASEAN members are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.

The 16 countries account for about 3 billion people, or half the world’s population, and a fifth of global trade. Any partnership to form a trading community would rival Europe or North America.

[macgyver]

Accor to open five hotels in Indonesia
Accor Hotels will open five new hotels in Indonesia next year making it the country’s fastest-growing hotel chain. The company will also spend $5.3m (£3.03m) developing 23 apartments for the Novatel Residence at Nusa Dua in Bali. Accor currently run 33 hotels in Indonesia and aim to make this 50 by the end of 2007.

[Alvin]

Exports projected to reach $86 billion this year

JAKARTA (Antara): Indonesia's exports are forecast to increase in value by about 20 percent from US$72 billion in 2004 to $86 billion this year, Minister of Trade Mari Elka Pangestu said on Thursday.

"If exports this year are projected to increase by 20 percent, by the end of next year they will likely increase by another 15 percent," Mari said.

She said Indonesia's exports continued to consist largely of natural resources like minerals and palm oil, as well as industrial products, textiles and garments, and electronic products.

Mari said using a conservative estimate, non-oil exports were projected to grow six percent to eight percent over the medium term.

This figure can be reached by expanding our markets,especially with China involved in a dumping row with the United States and Europe, she said. (**)

[bahar]

Spending to be key to economic recovery

Rendi A. Witular, The Jakarta Post, Jakarta

The government plans to boost spending to help stimulate the economy so as to overcome the downturn caused by soaring inflation, newly installed Coordinating Minister for the Economy Boediono said.

"We expect to start unloading government spending for projects in the first quarter next year to help stimulate the economy, since the private sector is still feeling the pinch of the dip," Boediono told a press conference on Thursday, after the first limited Cabinet meeting since the minor reshuffle.

The meeting was also attended by Vice President Jusuf Kalla, Bank Indonesia Governor Burhanuddin Abdullah, Minister of Finance Sri Mulyani Indrawati, Minister of Industry Fahmi Idris, Minister of Trade Mari Pangestu and Minister of Energy and Mineral Resources Purnomo Yusgiantoro.

To put the plan into effect, the government will spend between Rp 10 trillion (US$103 million) and Rp 15 trillion of undisbursed state funds from fiscal 2005 during next year's first quarter to reactivate the real sector, Mulyani said.

Besides being used for projects related to reconstruction efforts in tsunami-hit Nanggroe Aceh Darussalam and part of North Sumatra, the money will also be allocated for the cash assistance program instituted after fuel prices were increased.

The carry-over funds will also be used to cover the expenditures of all ministries that had already sealed contracts with the private sector in October.

"The slowdown in the economy needs to be treated seriously. We will see whether government spending can help stimulate higher economic growth," said Mulyani.

Based on the 2006 state budget, the government's routine and development spending will stand at around Rp 480 trillion.

With the economy in first half of next year likely to depend on the extra spending, Boediono is optimistic that the private sector will revive investment in the second semester after the central bank starts to gradually lower its lending rates.

Burhanuddin said inflationary pressure was also likely to gradually abate starting in the second quarter of next year, allowing the central bank to lower its rates in the second half of next year.

"Inflation is expected to be single digit next year. We are optimistic about that although we have factored in possible rises in electricity prices, wages, higher interest rates on the global market and higher government spending," he said.

During the meeting, Burhanuddin reported to President Susilo Bambang Yudhoyono that inflation would range between 7 percent and 8 percent next year and economic growth would be between 5 percent and 5.7 percent -- lower than the government's forecast of 6.2 percent.

Inflation accelerated to 18.4 percent between January and November, the highest in six years, after the government more than doubled fuel prices on Oct. 1 due to rising global oil prices and a plunge in the value of the rupiah against the U.S. dollar.

BI has aggressively raised its benchmark interest rate six times in the last six months. The central bank raised its lending rate on Tuesday by another 50 basis points to 12.75 percent.

Higher inflation and interest rates have contributed to a slowdown in economic growth and put a brake on the country's consumption-driven economy as both consumer loans and credit for business expansion become more expensive.

Highlights of the meeting:


1. Fiscal and monetary policies will be synchronized with continuous coordination between the government and the central bank to ease inflation.
2. BI says that economic growth this year is projected to stand at between 5.3 percent and 5.6 percent, with the economic slowdown resulting from declining consumption to continue until the second quarter of 2006.
3. Macroeconomic policies for the first half of next year will remain tight until the third quarter.
4. Government spending is expected to be robust in the first half of next year, sufficient to cushion declining purchasing power.
5. Investment and consumption to recover in the second semester of next year, with the central bank gradually lowering interest rates.
6. Government spending would be closely monitored to avoid unexpected higher demand for goods that could drive up inflation.
7. The deliberation of tax, labor, customs, and investment legislation with the House of Representatives would be accelerated.
8. A plan of action for reinvigorating the real sector would be drawn up, complete with time-bound targets and the allocation of clear job responsibilities.
9. Liquidity management in the fiscal sector would be improved.
10. Solutions would be sought to pending issues -- including the Cepu oil block debacle, the dispute between the government and Mexican cement giant Cemex SA over its investment in PT Semen Gresik, and negotiations over liquefied natural gas (LNG) exports to Japan and South Korea.

[Alvin]

Tuesday December 13, 6:01 PM
Indonesia GDP can grow 6-7 pct medium term -IMF
JAKARTA, Dec 13 (Reuters) - Indonesia's economy could sustain annual growth of 6-7 percent in the medium term, a senior official of the International Monetary Fund said on Tuesday. Stephen Schwartz, IMF senior resident representative, also said the annual inflation rate should be around eight percent by the end of next year given appropriate monetary policy from the central bank. "We remain upbeat on Indonesia's medium-term economic prospects and we believe over the medium term the Indonesian growth potential would be in the order of 6-7 percent GDP growth per year," Schwartz said in a speech at an economic seminar.

[cOcO_cHaneL]

yea im optimistic about it :)

[XxRyoChanxX]

come on Indo..!!! grow grow..hehe

[macgyver]

Asian Leaders Search for Common Interests, in America's Absence

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By SETH MYDANS
Published: December 15, 2005

By SETH MYDANS

KUALA LUMPUR, Malaysia, Dec. 14 - Japan and China were not talking. Russia was talking to everybody. Australia was fending off bad press. The Philippines was denying coup rumors. India was offering to teach English. And the United States, for once, was looking in from the cold.

On Wednesday, the inaugural East Asia Summit, which brought together 16 regional leaders for the first time, was a mix of here-we-go-again and never-seen-this-before as Asia began shuffling the political deck for the century ahead.

"The East Asia Summit was a great success," declared the host, Prime Minister Abdullah Badawi of Malaysia, in a final news conference. "There was a high degree of acceptance that we are one community with a common interest."

That, in fact, was the lasting question at the end of the one-day meeting, which followed a summit meeting of the 10-member Association of Southeast Asian Nations, or Asean.

What is the shape of the region as the "Asian century" begins; is it one community; can it agree on a common interest?

With complex crisscrossing national agendas, the major dynamic was the competition for regional dominance between the established powers - Japan and the United States - and the rising giant, China.

The United States declined to join the summit meeting because of a reluctance to sign a pledge renouncing the use of force and interference in internal affairs in the region.

With the United States absent, the competition between Japan and China was played out here in a spat over old war wounds.

Because Prime Minister Junichiro Koizumi of Japan had once again visited a shrine to Japanese who died in World War II, Prime Minister Wen Jiabao of China refused to meet him, placing the new association's two most powerful members in mute confrontation.

South Korea was also at loggerheads with Japan over what it saw as Tokyo's failure to acknowledge and adequately address wartime atrocities.

The membership of the group had itself been the subject of dispute, with the eventual admission of Western-oriented Australia and New Zealand which, along with Japan, were seen as conduits for American influence.

America's absence from this major forum is shortsighted, said Jusuf Wanandi, director of the Center for Strategic and International Studies in Indonesia.

"I know about the mess in the Middle East, but don't be distracted," he said by telephone. "This is definitely, whether you like it or not, the most important region for the future."

Asia needs the United States, too, he said, as a balancing force and as an economic partner.

The Southeast Asian group is made up of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

[macgyver]

Asian Leaders Establish New Group

By Edward Cody
Washington Post Foreign Service
Thursday, December 15, 2005; Page A25

KUALA LUMPUR, Malaysia, Dec. 14 -- Asian leaders agreed Wednesday to create a new, loosely united regional grouping, including India and Australia, to work together on combating Asia's economic, security and political problems.

The 16-nation association, which will hold annual summit conferences, significantly widened the circle of cooperation among countries represented by the 10-member Association of Southeast Asian Nations (ASEAN) and a sister group, ASEAN Plus Three -- China, Japan and South Korea.

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The formation of the new group, decided at the first East Asian Summit, marked an attempt to respond to a conviction among Asian leaders that their region requires a stronger independent voice in world affairs and a new forum without the leading role the United States has played since World War II.

"We have established the East Asia Summit as a forum for dialogue on broad strategic, political and economic issues of common interest and concern with the aim of promoting peace, stability and economic prosperity in East Asia," a communique said.

"This is something that is accepted by us all," added Malaysia's prime minister, Abdullah Ahmad Badawi, who hosted the summit in Kuala Lumpur in tandem with ASEAN's regular annual meetings.

But by accepting Australia, New Zealand and India into the new group, the leaders left unanswered questions about what goals it would pursue, how unified it would try to become and how it would relate to the long-standing ASEAN and ASEAN Plus Three groupings. A team of senior Asian officials was assigned to weigh these issues and bring proposals to the next East Asia Summit, scheduled for a year from now in the Philippines, Abdullah said.

One question they will have to address is Russia's desire to participate, raised by President Vladimir Putin in an appearance as an observer here and an address to the gathered Asian leaders. The United States, which participates in other Asian-Pacific groupings, was not invited to the inaugural summit and did not participate even as an observer.

U.S. diplomats earlier had expressed concern about being left out, pointing out long-standing U.S. interests in the region and the U.S. military's dominant role in Asian security. But as the group was broadened to include Australia, India and New Zealand, it became clear there was plenty of weight to balance off Chinese influence and, particularly through Australia, a ready channel for U.S. concerns.

Underlying the ambiguity about the new group's role and degrees of membership was concern over evolving power relationships as China becomes stronger and increasingly willing -- even eager -- to exercise regional leadership and Japan moves strategically closer to the United States.

China and Japan also have been divided by increasingly tense differences over Prime Minister Junichiro Koizumi's regular visits to a shrine honoring Japan's war dead and rival claims to oil deposits and several small islands in the East China Sea. Those differences were evident in Kuala Lumpur, where Premier Wen Jiabao refused to sit down with Koizumi for a regular China-Japan-South Korea meeting.

Seeking to soften the atmosphere, Koizumi leaned over during a signing ceremony Wednesday to ask Wen to lend him a pen. When the Chinese premier smiled and handed it over, assembled diplomats applauded.

Aside from the politesse, however, Japan joined Indonesia and Singapore in leading the fight to include India, Australia and New Zealand in the new grouping, diplomats said.

As originally conceived by Malaysia and pushed by China, the new summit group was to include only the 10 ASEAN countries along with China, Japan and South Korea. That would have made it a vessel for Chinese diplomatic leadership in a forum distinct from other groups -- such as the ASEAN Regional Forum or the Asia-Pacific Economic Cooperation forum -- that also include the United States.

[macgyver]

2006: Global economy to grow despite high energy prices

NEW YORK: The world economy has broadly withstood a steady two-year rise in oil prices, but despite a slowdown reaching virtually every economic region in 2005 it is expected to continue expanding in 2006, with Asia and North America at the forefront.

The world's gross domestic product increased an estimated 3.2 percent in 2005, down from 3.8 percent last year, according to the World Bank. Growth is expected to be stable in 2006, before strengthening somewhat in 2007.

"High oil prices cut into the income of oil importers, but the expansion remained strong, partly because of favorable conditions in financial markets, including still low inflation (and) interest rates..., the bank said in a November report called "Prospects for the Global Economy.''

Pitfalls, however, remain. "Tightness in the oil market, the threat of even higher fuel prices, and the possibility that interest rates may rise pose major threats to the expansion,'' the report said.

In its updated outlook last month, the Organization for Economic Cooperation and Development said the world's 30 industrialized economies have "skated'' and "sailed'' through oil and hurricane shocks and are set for overall growth of 2.7 this year and 2.9 percent in 2006.

The Paris-based global economic think tank predicted that the 12-nation euro zone is to set to enjoy a "moderate recovery,'' lifting its growth forecast to 1.4 percent this year and 2.1 percent in 2006.

Despite the improved outlook for the 12 countries sharing the euro, the estimate for 2005 would mark a slowdown after growth of 1.8 percent in 2004, the OECD said.

Asian economies should continue to show solid growth in 2006 and China will likely let its currency, the yuan, appreciate further to tackle problems caused by its current account surplus.

"The ongoing boom in non-OECD Asia (such as China) should continue to provide an important impetus to the Australian, Korean and New Zealand economies,'' the OECD said.

Many U.S. companies contend that China intentionally keeps the value of its currency low to give its exporters an artificial price advantage, contributing to the huge American trade deficit with China, which rose to US$162 billion in 2004. The deficit was expected to hit US$200 billion in 2005.

The International Monetary Fund projects GDP growth for the world's advanced economies in Asia, Europe and North America at 2.5 percent in 2005 and 2.7 percent next year.

But "high and volatile oil prices remain a significant global risk,'' particularly in the event of a disruption in oil supply.

Oil prices briefly surged to an all-time high of $70.85 a barrel on Aug. 30, after Hurricane Katrina battered the U.S. Gulf Coast. They have moderated since then and are now trading around $60 a barrel.

The energy shock has put big money into the hands of oil-exporting nations.

The surge in oil prices took around $300 billion (euro252 billion) in 2005 out of the mainly oil importing economies of the OECD and transferred it to oil-producing countries. Much of that money, however, has been fueling the global economy as demand for manufactured goods and services from the Middle East increased.

"With price stability being maintained, a powerful impetus arising from the Asian and U.S. economies and the respending of oil exporters' higher revenues, the case for a prolonged world expansion ... looks plausible,'' assuming that oil prices won't shoot up again, said OECD Chief Economist Jean-Philippe Cotis.

In the world's developing economies, growth remained "very robust,'' at an estimated 5.9 percent in 2005 and 5.7 percent in 2006, the World Bank predicted.

In part this reflects the strong performance of China and India, where output continued to expand at rapid rates. But high oil prices, rising interest rates and building inflationary pressures are expected to restrain growth in most developing regions in 2006 and 2007, the bank said.

In the United States, despite turbulence from hurricanes and high energy prices, the economy is expected to log respectable growth in 2005 and 2006, a panel of 45 business economists said in a recent survey.

The economy, as measured by GPD, is projected to grow by 3.6 percent in 2005 and 3.3 percent in 2006, according to the National Association for Business Economics.

"The hurricane season failed to blow the economy off course,'' Carl Tannenbaum, the association's vice president and chief economist at LaSalle Bank in Chicago, said in the November 2005 NABE Outlook.

"Our forecasters expect strong real GDP growth of 3.3 percent next year, albeit with some changes in the composition of that growth. This should be enough to prompt more rate increases from the Federal Reserve,'' he said.

NABE's projections mark a moderation in growth from 2004 but still represent a decent performance, economists said. In 2004, the U.S. economy grew by 4.2 percent, the best showing in five years.

Against this backdrop of the economy's resiliency, the Federal Reserve is likely to continue raising short-term interest rates at least one more time in 2006 to keep a lid on inflation. The Fed has boosted interest rates 13 times since June 2004 to bring rates from 1 percent back to 4.25 percent, the highest in more than four years.

The NABE panel forecast U.S. trade deficit at $769 billion (euro645 billion) in 2006, reflecting higher oil prices, and the federal deficit at $376 billion (euro315 billion), reflecting in part increased federal spending for reconstruction in the states devastated by the Gulf Coast hurricanes.

The U.S. consumer price index is expected to advance by 3.8 percent in 2005. For 2006, the panel sees all-items CPI inflation of 2.3 percent, held down by moderating energy prices. The core CPI -- excluding food and energy prices -- is projected to increase by 2.1 percent in 2005 and 2.4 percent in 2006.

"With strong earnings fueling capital spending, and with improving confidence and better job markets powering consumer outlays, overall demand will be strong enough to energize the economy heading into 2006. ... Little in the data suggests that the economy will be thrown for a loss anytime soon,'' BusinessWeek Online said in an editorial headlined "U.S.: Why Economic Growth is Galloping.''



Growth for Asia generally remains buoyant despite the spike in global crude oil prices, as Japan recovers after more than a decade of stagnation, helped by stronger exports and consumer spending and healthier profits.

The year 2006 is expected to bring high-flying China somewhat closer to earth as its economy slows from the stratospheric 9 percent-plus growth of recent years. The outlook for Asia's second biggest economy is murkier than a year ago, as foreign investment flows begin to slow and worries mount over overcapacity in many industries, especially steel and autos. A spate of industrial accidents, meanwhile, has added to calls for a slower, more sustainable model of industrialization.

Yet, strong exports and rising domestic demand continue to fuel China's economic boom, with the World Bank and OECD forecasting growth for 2006 at around 9 percent, increasingly driven by domestic demand. Beijing's success in capping inflation at less than 3 percent has eased fears that prices might spiral out of control.

In South Korea, private consumption is recovering and exports have begun to pick up. These factors are projected to boost GDP growth from 3.9 percent in 2005 to 5.1 percent in 2006.

Japan, Asia's biggest economy and the world's second biggest, is finally rebounding after years of spiraling price declines, amid a flurry of reports showing robust consumer spending and corporate investment.

All that is helping to reverse the trend of falling prices that has undercut paychecks and corporate profits, and the renewed optimism has lifted Japanese stocks to five-year highs.

"We are slowly starting to get out of what is usually called deflation,'' Economy and Banking Minister Kaoru Yosano told reporters in December, adding that investors are already banking on a turnaround.

The government has set its projection for Japan's real economic growth in GDP terms at between 2 and 2.5 percent for 2006. Bank of Japan chief Toshihiko Fukui has said the central bank may start tightening monetary policy as early as the fiscal year starting April.

The smaller, developing Asian economies such as Indonesia, Malaysia and Vietnam, helped by strong regional trade and investment trends and falling rates of poverty, are all expected to see growth of more than 5 percent.

Rising manufacturing demand and robust tourism and financial services are meanwhile powering India's rise as a regional economic power, with growth forecast at 7.5 percent through the end of March 2006.

Yet the outlook for Asia is dogged by uncertainty over the eventual impact of the bird flu epidemic ravaging regional poultry flocks, with experts warning that if the disease mutates into a form that can be transmitted easily between humans, a human flu pandemic could wreak havoc in ways impossible to predict.



In the 25-nation European Union, economic activity will see a "sound recovery'' in 2006, piggybacking on robust growth in the global economy.

The European Commission, the EU's executive agency, forecast growth of 1.5 percent in 2005 and 2.1 percent in 2006 for the entire EU. Growth hit 2.4 percent last year, a figure it is predicted to reach again in 2007.

The forecast for 2005 sees inflation in the entire EU and the 12-nation euro zone increasing slightly to 2.3 percent on the back of high oil prices, then easing to 2.2 percent in 2006 and to 1.9 percent in 2007. "More importantly core inflation -- excluding energy and unprocessed food prices -- remains low and shows no second-round effects from rising oil prices so far,'' the commission said.

Unemployment is on the way down, it said, predicting a drop by almost 1 percentage point to 8.1 percent by 2007.

"In all, the EU is expected to create 6 million new jobs between 2005 and 2007, of which 4.5 million in the euro area, including 1.4 million in 2005.''

In Germany, Europe's largest economy, the EU expects the budget deficit to rise to 3.9 percent in 2005 _ well above the 3.7 percent the German government predicted in August. The German economy is expected to grow just 0.8 percent in 2005, 1.2 percent in 2006 and 1.6 percent in 2007.





Latin America's largest economy, Brazil, was expected to expand by 2.3 percent in 2005, down from a previous forecast of 3.5 percent growth, due to sky-high interest rates aimed at keeping inflation under control. But economists believe rates will fall steadily in 2006, leading to Brazilian economic expansion of 3.5 percent next year.

Argentina, South America's No. 2 economy, racked up whopping 8.2 percent growth in 2005 as it continued to rebound from an economic meltdown in 2002. But growth for 2006 is expected to come in at 5.7 percent.

Latin America was wracked by trade disputes this year that are likely to continue in 2006 as many nations try to build closer economic relations with the United States but some take a much more cautious approach -- hoping President George W. Bush's administration will enact deep cuts in subsidies given to American farmers.

At the Summit of the Americas in Argentina in November, 27 Latin American and Caribbean nations joined with the United States and Canada in a push to set a date for high-level negotiations to form a Free Trade Area of the Americas.

But the Mercosur trade bloc -- made up of Argentina, Brazil, Paraguay and Uruguay -- joined with Venezuela to oppose a timeframe to get negotiations going that have been stalled for years. The 34-nation FTAA would stretch from Canada to Chile, including all nations in the hemisphere except for Cuba.

Mercosur nations say they favor the idea of FTAA, but don't want to pursue the idea until the 148-nation World Trade Organization concludes talks aimed at slashing subsidies and tariffs around the planet. Venezuelan leader Hugo Chavez wants the zone shelved completely, saying it will benefit big American companies while enslaving Latin American workers. --AP

[Zorobabel]

Indonesia Jan-Nov foreign investment up 21 pct y/y
Thu Dec 15, 2005 02:27 AM ET

JAKARTA, Dec 15 (Reuters) - Foreign direct investment approvals in Indonesia rose 21 percent to $11.69 billion from January to November from the same period in 2004, the state investment agency said on Thursday.

The agency, known as BKPM, also said in a statement that domestic direct investment approvals rose 12 percent to 45.73 trillion rupiah ($4.65 billion) in the first eleven months.

The BKPM data does not cover certain industries such as oil and gas nor banking and insurance, but analysts say the figures are indicative of investor confidence in the economy, still struggling after the Asian financial crisis of the late 1990s.

The agency divided the data into three categories: new projects, project expansion and change of status. The first two categories are most likely to generate fresh economic activity, while the "change of status" component is more of a legal issue.

[Zorobabel]

Government to spend $1.82b for infrastructure projects

The government will spend Rp 18 trillion (about US$1.82 billion) next year for a range of infrastructure projects including irrigation, roads, dams and bridges, to help drive higher economic growth and reduce employment.

The expenditure would exclude funds required for toll road projects and telecommunications infrastructure, which could be sufficiently provided by the private sector, Minister of Public Works Djoko Kirmanto said on Monday.

"The funds, which would all be taken from the state budget, will be allocated for infrastructure projects throughout the country," said Djoko after meeting President Susilo Bambang Yudhoyono.

This year, the government has allocated Rp 12.78 trillion for infrastructure projects, excluding those for reconstruction works in tsunami-stricken Nangroe Aceh Darussalam and parts of North Sumatra.

Next year's planned expenditure would also exclude such projects.

Most of this year's funds, however, have not yet been realized into projects, partly because of the implementation of a new system in filing proposals for projects.

Recently installed Coordinating Minister for the Economy Boediono has said the government would boost its spending for development projects to help stimulate the economy, currently facing a speed bump in the form of high interest rates.

The government will spend between Rp 10 trillion and Rp 15 trillion of undisbursed state funds from the 2005 budget during next year's first quarter to help reactivate the real sector.

The government is counting on the private sector to revive investment in the second half of the year, with the central bank starting to gradually lower its lending rates.

The government is targeting the economy to grow by 6.2 percent next year despite weakening purchasing power, high inflation and interest rates, as well as the relatively unstable rupiah exchange rate against the U.S. dollar.

The forecast is more optimistic than that of Bank Indonesia, which predicts the economy to grow by between 5 percent and 5.7 percent next year. -- JP

[macgyver]

Anybody has the statistics of total Indonesia debt amount ?
I just jeaolous with Brasil and Argentina ... :-(

[sanhen]

If not mistaken - almost 100% of GDP. Brazil is in good economic mood at the moment. Argentina is worse than Indonesia, I think.

[F-ian]

next year they say its Tahun Fiscal In Ind. I don't really get it could somebody explain to me?? :? :?

[Zorobabel]

If not mistaken - almost 100% of GDP. Brazil is in good economic mood at the moment. Argentina is worse than Indonesia, I think.
Indonesia debt-to-GDP ratio is about 53%. Brazil's is about 60%. After Argentina's debt restructuring this year, Argentina's public debt is about 70% of GDP, but the economy is growing at about 5-7% and the government is running a budget surplus of 3% of GDP. That means within the next two years it should be close to 50% of GDP. Brazil is actually in the worst shape, with its government running a budget deficit of about 3% (Indonesia's is considerably less than 1%, for comparison) while the economy is only growing moderately.

[XxRyoChanxX]

in the next to years what do you all think Indonesia's economy is going to be like? worse? better?

[F-ian]

Maybe Worsen, I'm Kinda Scared about the Bird flu Pandemic (God jangan sampai deh..) but I think 2007 is Indonesia's recovery point

[XxRyoChanxX]

is it true they're still covering it up!

[Zorobabel]

The economic situation is not bad. The economy looks like it will be growing around 5% going into 2006, but it should get better as the new cabinet works to repare the damage done by the old cabinet. Sri Mulyani plans to boost growth by spending undisbursed funds from this year's budget, which seem to be quite substantial at around $1-1.5 billion, along with next year's planned development spending. That should help push growth above 5% for the first half of 2006, while in the latter half they plan to lower interest rates to boost investment and private consumption to maintain significant growth.

[macgyver]

If not mistaken - almost 100% of GDP. Brazil is in good economic mood at the moment. Argentina is worse than Indonesia, I think.

they will pay all the debt to IMF .. :-)
While we INdonesia is always eager to ask more and more loan .... :bash:

( some people said .. that latest budget deficit report is just a "tool" to justify for asking more loan .... ) ...stupid or smart ? ....

[David-80]

Argentina failed to pay their debts to its creditor via IMF, they are asking for more times, while Indonesia next year will pay their debt on time. Budiono was interviewed last two days ago and he said no debt reschedulling for Indonesia next year.

Next Year will be turning point for Indonesia, as Oil prices will be flat at 55-60 and most of the infrastructure tender will be realized next year.

About debt ratio, Indonesia in 2004 have a 55% of its GDP while in 2005-2006, Indonesia will have debt ratio less than 50%. Philippines have a debt ratio almost 89% of their total GDP.

Mind you, almost 14+ billion US dollar that IMF gave to Indonesia as a loan is still in Indonesia forex reserves and not being used at all because they want to use it as capital saving to prevent another economic crisis.

cheers

[David-80]

List of countries with total debt ratio...Indonesia is doing really great.

1 Malawi 228.30 2004 est.
2 Lebanon 177.90 2004 est.
3 Japan 164.30 2004 est.
4 Jamaica 146.10 2004 est.
5 Zambia 127.50 2004 est.
6 Seychelles 122.80 2004 est.
7 Argentina 118.00 June 2004 est.
8 Greece 112.00 2004 est.
9 Italy 105.60 2004 est.
10 Israel 104.50 2004 est.
11 Sri Lanka 104.30 2004 est.
12 Egypt 102.70 2004 est.
13 Singapore 102.50 2004 est.
14 Belgium 96.20 2004 est.
15 Jordan 85.80 2004 est.
16 Serbia and Montenegro 80.00 2004 est.
17 Sudan 79.70 2004 est.
18 Saudi Arabia 75.00 2004 est.
19 Cyprus 74.90 2004 est.
20 Cote d'Ivoire 74.80 2004 est.
21 Kenya 74.30 2004 est.
22 Turkey 74.30 2004 est.
23 Philippines 74.20 September 2004 est.
24 Honduras 74.10 2004 est.
25 Uganda 73.90 2004 est.
26 Pakistan 71.40 2004 est.
27 Morocco 70.20 2004 est.
28 Nicaragua 69.50 2004 est.
29 Panama 69.20 2004 est.
30 Cameroon 69.10 2004 est.
31 France 67.70 2004 est.
32 Vietnam 65.90 2004 est.
33 Germany 65.80 2004 est.
34 United States 65.00 2004 est.
35 Austria 64.20 2004 est.
36 Bahrain 63.80 2004 est.
37 Moldova 63.40 2004 est.
38 Portugal 61.50 2004 est.
39 Dominican Republic 61.10 2004 est.
40 India 59.70 2004 est.
41 Papua New Guinea 59.30 2004 est.
42 Tunisia 59.20 2004 est.
43 Hungary 58.30 2004 est.
44 Costa Rica 58.00 2004 est.
45 Switzerland 57.20 2004 est.
46 Indonesia 56.20 2004 est.
47 Netherlands 55.80 2004 est.
48 Senegal 55.20 2004 est.
49 Trinidad and Tobago 54.40 2004 est.
50 Spain 53.20 2004 est.
51 Zimbabwe 52.30 2004 est.
52 Brazil 52.00 2004 est.
53 Colombia 51.80 2004 est.
54 Sweden 51.60 2004 est.
55 Poland 49.90 2004 est.
56 Ecuador 49.20 2004 est.

57 Thailand 47.60 November 2004 est.
58 Finland 46.80 2004 est.
59 Slovakia 46.60 2004 est.
60 Yemen 46.40 2004 est.
61 South Africa 45.90 2004 est.
62 Malaysia 45.40 2004 est.
63 Peru 44.10 2004 est.
64 Venezuela 43.10 2004 est.
65 Bangladesh 43.00 2004 est.
66 Denmark 42.50 2004 est.
67 Bulgaria 41.90 2004 est.
68 El Salvador 41.70 2004 est.
69 Croatia 41.70 2004 est.
70 Uzbekistan 41.50 2004 est.
71 United Kingdom 39.60 2004 est.
72 Paraguay 39.20 2004 est.
73 Namibia 38.50 2004 est.
74 Algeria 37.40 2004 est.
75 Iceland 35.90 2004 est.
76 Czech Republic 33.50 2004 est.
77 Norway 33.10 2004 est.
78 Taiwan 32.40 2004 est.
79 Guatemala 32.00 2004 est.
80 Syria 32.00 2004 est.
81 Slovenia 31.50 2004 est.
82 China 31.40 2004 est.
83 Ireland 31.20 2004 est.
84 Kuwait 29.60 2004 est.
85 Gabon 29.30 2004 est.
86 Mauritius 29.20 2004 est.
87 Russia 28.20 2004 est.
88 Iran 27.00 2004 est.
89 Lithuania 25.20 2004 est.
90 Ukraine 24.70 2004 est.
91 Romania 23.60 2004 est.
92 Mexico 23.50 2004 est.
93 New Zealand 22.10 2004 est.
94 Korea, South 21.30 2004 est.
95 Macedonia 20.00 2004 est.
96 Nigeria 20.00 2004 est.
97 Azerbaijan 18.90 2004 est.
98 United Arab Emirates 17.60 2004 est.
99 Australia 17.40 2004 est.
100 Kazakhstan 13.70 2004 est.
101 Chile 12.80 2004 est.
102 Latvia 11.80 2004 est.
103 Oman 10.30 2004 est.
104 Libya 8.80 2004 est.
105 Botswana 8.60 2004 est.
106 Estonia 5.40 2004 est.
107 Tanzania 5.00 2004 est.
108 Hong Kong 2.10 2004 est.

Now, why you have to be jealous with Argentina and Brazil mac? :)

cheers