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Discussion Starter · #1 ·
The Business thread is getting crowded, so I'm creating this separate forum for trade/macro-economics issues so the Business Thread can focus on micro stuff like individual companies and the stock market.

allow me open :D


Singapore Says Trade With Indonesia Up
Thursday April 21, 6:46 am ET
Singapore Says Trade With Indonesia Up 19 Percent in First Quarter of 2005


SINGAPORE (AP) -- Singapore said Thursday that its trade with neighboring Indonesia jumped 19 percent in the first quarter of 2005 from a year earlier, reaching 7.7 billion Singapore dollars (US$4.66 billion).
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Imports from Indonesia totaled S$4 billion (US$2.42 billion), while Singapore shipped S$3.7 billion (US$2.24 billion) worth of goods to its largest neighbor, the city-state's trade promotion board said.

Singapore's key imports from Indonesia include petroleum products and telecommunications equipment. Its principal exports to Indonesia are petroleum products, machinery and electronics.

Trade data between the two countries had been kept secret for 28 years, following a deal in 1976 between then-Singapore Prime Minister Lee Kuan Yew and Indonesian strongman Suharto.

Singapore began issuing Indonesian trade figures publicly in January 2004 after complaints from Jakarta of discrepancies in the data exchanged between ministers, saying such secrecy could lead to smuggling and illegal exports of its natural resources.

Trade between Singapore and Indonesia totaled S$26.2 billion in 2003, making Indonesia the city-state's seventh-largest trading partner, Singapore's trade promotion board said in January 2004 when it released data for the first time.
 

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Discussion Starter · #2 ·
China to invest US$10 billion in Indonesia

JAKARTA (Antara): China has agreed to invest US$10 billion in Indonesia as part of a new strategic agreement between the two countries, Coordinating Minister for the Economy Aburizal Bakrie said on Friday.

Aburizal said the deal, a major boost to Southeast Asia's largest economy as it struggles to throw off the effects of the Asian financial crisis, would be comprised of agriculture and infrastructure projects.

"The investment will be made by the private sector and we hope it will be carried out this year," the minister said.

Chinese President Hu Jintao is expected to sign the deal in a meeting with his Indonesian counterpart Susilo Bambang Yudhoyono after this weekend's summit of Asian and African leaders in Jakarta. (**)
 

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I guess Indonesia is only half as important as Argentina, which has been promised $20 billion in investment, to China.
 

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Discussion Starter · #4 ·
I wonder why? Probably for strategic reasons...while China wants the rest of Asia to develop and prosper, it wants to make sure that it remains THE most successful?
 

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Does this mean that there ll be more constructions in the near future?? US$ 10 billion is a lot of money>
 

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Discussion Starter · #6 ·
Malaysian arrested in Indonesia for illegal logging

Indonesian authorities have arrested a Malaysian man suspected of being behind illegal logging operations in the eastern province of Papua.

The 54-year-old was detained while trying to cross into Malaysia's Sarawak state via Indonesia's West Kalimantan province on Borneo island.

Police say he is suspected of masterminding the smuggling of illegally logged timber from Papua to Malaysia, as well as running illegal logging operations in Borneo.

Indonesia's anti-logging taskforce has already arrested 11 foreigners -- 10 Malaysians and one South Korean -- for suspected illegal logging activities in Papua and Borneo.
 

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It s easy destroying (= stealing ) your neighbour(=Indonesian) forest and preserved your own ( =m'sian),use your own rainforest for eco-tourism purpose and earn money frm it.
 

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Discussion Starter · #8 ·
Bank Indonesia says year-end inflation could exceed 7.0 percent target

Monday April 25, 2005, 5:03 pm



JAKARTA, (AFP) - Bank Indonesia governor Burhanuddin Abdullah said that inflation by year-end could possibly exceed the central bank's initial target of 7.0 percent.

Inflation hit a high of 8.81 percent year-on-year in March, beating analysts' forecast of 7.10-8.26 percent, following the implementation of a 29 percent fuel price hike.

"Our target is 7.0 percent but the possibility of 8.8 percent is present," Abdullah told reporters.

Rising inflation has sparked fears that Bank Indonesia will accelerate interest rate hikes. Such fears have pushed down stock prices and also undermined sentiment on the rupiah.

Asked if the central bank will review its inflation target, Abdullah said the matter will be discussed with the government at the end of May.
 

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Discussion Starter · #9 ·
encouraging signs...

Merrill's Watts says Indonesia growth opportunities increasing

HONG KONG (Bloomberg): Merrill Lynch & Co. International Chairman Kevan Watts said the investment bank is expanding in Indonesia, where the six-month old government of President Susilo Bambang Yudhoyono is encouraging foreign investment.

Merrill, the world's biggest securities firm, in February hired Goldman Sachs Group Inc.'s Roger Suyama to head its Indonesian investment banking team. That came after Watts visited Jakarta in February for the first time in three years.

"The politics have moved to a different level and that's a precursor to the business environment improving and developing," said Watts, 55, in an interview at the Boao Forum in Hainan, China at the weekend. "In terms of growth opportunities, southeast Asia is looking a lot better."

Indonesia is still reorganizing its banks and businesses after the financial crisis of 1997 to 1998 reduced the value of its currency by more than 80 percent and forced companies into bankruptcy. This year mergers and acquisitions are running at arecord pace in Indonesia, after Altria Group Inc.'s US$5.1 billion offer to buy HM Sampoerna TBk pushed the volume to $7.2 billion, more than double last year's total.

Merrill ranks sixth advising on mergers and acquisitions in six countries in southeast Asia -- Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand -- this year, after helping Encore International Ltd. in its $400 million takeover of New Links Energy Resources, Bloomberg data show. It ranked 21st in 2004 and 14th in 2003.

Since Yudhoyono came to power in October, Indonesia has moved to clean up its image with foreign investors. The armed forces, which own golf courses, hotels, builders and fish sellers, said this month they will withdraw from business activities in thenext two years, meeting the requirement of legislation passed last year.

"What impressed me was the greater degree of consensus around the political leadership," Watts said. "I was impressed by the president personally and the people around him. There's more of a technocratic feel about the people around him." (**)
 

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Rupiah is at 3 year low, expected to hit IDR10,000 against the dollar this week...


FX Asia: Bk Indonesia Rate Hike Unlikely To Boost Rupiah

JAKARTA (Dow Jones)--Bank Indonesia's plan to hike interest rates to support the tumbling value of the rupiah against the U.S. dollar will boost market sentiment but won't address the currency's core problem of rising oil prices, which are fueling massive dollar purchases by domestic state firms, analysts said.

Bank Indonesia Governor Burhanuddin Abdullah Tuesday unveiled a rupiah defense plan that includes a pending increase in the benchmark Sertifikat Bank Indonesia, or SBI rate, of 15 to 20 basis points, the use of forward transactions to protect the currency and a move to "monitor" state-owned Pertamina (PTM.YY)'s dollar purchases.

That news and Bank Indonesia intervention helped spur a rebound in the rupiah's value with the U.S. dollar closing at IDR9,688 Tuesday, down from a-more-than three-year high of IDR9,810 earlier in the day and Monday's close of IDR9,750.

The central bank's moves are welcome, but they won't put much of a dent in the voracious domestic appetite for dollars powered by high oil prices, said JP Morgan Chase Bank's Asian foreign exchange strategist, Claudio Piron.

"The risk is we may see (the dollar) touch IDR10,000 by year's end," Piron said. "The central bank can watch Pertamina, but understand that Pertamina has a budgeted rate of $24 a barrel and outside that they have to go to the market to buy dollars (to purchase supply)."

At 1025 GMT, the front-month June Brent contract on London's International Petroleum Exchange was down 41 cents at $53.99 a barrel in electronic trading, but above an intraday low of $53.88/bbl. Front month Nymex crude was trading 66 cents lower at $53.91/bbl.

Piron said that Bank Indonesia had been "resting on its laurels a bit" in responding to the recent rupiah decline, but that movements in the currency reflect a healthy managed currency and shouldn't be cause for market gloom.

"Generally speaking, the currency is responding to the macroeconomic environment...but (Bank Indonesia) has to get (support measures) just right because sentiment is fragile and if they overstep they may panic the market," he said.

A weaker rupiah threatens the financial performance of local firms, which have substantial dollar debt, and could hurt Indonesia's most prolonged period of economic growth since the Asian financial crisis of 1997-98. Indonesia's government of President Susilo Bambang Yudhoyono has projected an average annual rise in gross domestic product of 6.6% from 2004 to 2009, outpacing 5.1% GDP growth last year.

The rupiah's decline has also prompted the central bank to consider introducing a new generation of money market management tools, including a currency swap instrument, to reduce U.S.-dollar buying by state-owned firms. Bank Indonesia's Senior Deputy Governor Miranda Gultom told Dow Jones Newswires that the bank's board of governors would discuss the currency swap tool in a meeting Tuesday, without elaborating.

Interest-Rate Rise May Not Help Rupiah Long Term

The psychological impact of Bank Indonesia's moves to support the rupiah will likely help keep the U.S. dollar at IDR9,500 to IDR9,600 for the next few weeks, but projections beyond that period remain "quite hazy," said ABN Amro Bank Asian sovereign and foreign exchange strategist, Emmanuel Ng.

Ng said that raising interest rates to absorb excess liquidity won't influence domestic companies' purchases of dollars to pay foreign currency debts.

"I think the market will have a positive spin on (the rupiah support measures) because it shows that Bank Indonesia is being proactive," he said.

"But raising interest rates will only have transitory impact," Ng said. Monitoring "Pertamina and the use of forward transactions would have the most impact because those two measures would actually address the real dollar (transactions)."

That view was echoed by Citibank economist Anton Gunawan, who said the current circumstances behind the decline in the rupiah mirrored those in May to July 2004.

Bank Indonesia helped stem the rupiah's slide against the dollar at that time by trimming the estimated $30 million that Pertamina spends daily on oil supplies. It did that by limiting those purchases to state-owned bank transactions closely monitored by the central bank.

Gunawan said the central bank's efforts to bolster the value of the rupiah against the dollar may get a boost from a massive U.S. currency injection from an unlikely source: U.S. cigarette manufacturer Philip Morris.

Philip Morris, a unit of the world's biggest tobacco company Altria Group Inc. (MO), said last month that it will pay $2 billion to buy a 40% stake in Jakarta-listed PT Hanjaya Mandal Sampoerna (HMSP.SK) from a group of major shareholders. Sampoerna is Indonesia's third-largest cigarette maker by sales.

Philip Morris will make a general offer for the rest of Sampoerna which, if fully accepted, will lift the value of the total acquisition to $5.2 billion, including around $160 million in debt.

The rupiah may benefit from an influx of U.S. dollars timed to meet an end-May payment deadline for a portion of the Sampoerna acquisition, Gunawan said.

"(Philip Morris) has already brought in about a billion, probably...and if they bring some more money in then the rupiah value can go to IDR9,400 to IDR9,500, he said.
 

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Discussion Starter · #11 ·
RI, China work on $507m projects
Rendi A. Witular, The Jakarta Post, Jakarta

The governments of Indonesia and China have agreed to jointly work on infrastructure projects in Indonesia worth US$507 million as a follow-up to the bilateral strategic partnership signed by the two nations' presidents on Monday.

The two projects are the completion of the ongoing Suramadu bridge linking Surabaya and Madura island in East Java worth $177 million and the construction of the $330 million Jatigede dam in West Java.

"During the ministerial level meeting for the strategic partnership, the Indonesian and Chinese governments agreed to invest in infrastructure projects," Minister of Public Works Djoko Kirmanto said at the State Palace on Tuesday.

Indonesia, the world's fourth most populated country, signed an agreement on strategic partnership with the world's most populated country, China, to help expand bilateral trade by 42 percent from $14 billion to some $20 billion over the next three years.

Included in the agreement is the Memorandum of Understanding (MOU) on infrastructure and natural resources cooperation.

For the initial phase, Djoko said, the Chinese involvement in developing local infrastructure projects would be by providing soft loans for the construction of the Suramadu bridge and the Jatigede dam.

The Suramadu bridge, which is expected to become the country's longest bridge, is currently being financed by the central government and the East Java administration.

The 5,438-meter-long bridge is estimated to be completed by 2006, with the loan from China expected to be disbursed this year. The bridge is primarily aimed at boosting the economy on Madura island, which has been left largely untouched by development.

"The loan from China was initially scheduled to be disbursed last year. However, it was later postponed because the Indonesian government could not meet several conditions set out by the Chinese government," said Djoko.

The conditions include the provision of funds by the Indonesian government amounting 10 percent of the project value for financing the initial construction of the bridge within one year.

Djoko, however, said that during the recent ministerial meeting, China had agreed to revise the condition by allowing Indonesia to provide only 5 percent of the funds each year for a two-year period to help finance the construction.

Aside from the Suramadu project, Djoko added, China was also eager to be involved in the planned Jatigede dam.

The dam is located in Sumedang regency -- some 130 kilometers southeast of Jakarta -- and it is expected to provide water for some 100,000 hectares of rice fields along the northern Java coast, particularly in West Java province.

The dam will address the continual problems of drought and flooding in West Java, particularly in Sumedang.
 

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Discussion Starter · #13 ·
World Bank East Asia Economic update
Asia Update - Indonesia


Sadly, the closing days of 2004 will be remembered for the tragic tsunami that claimed at least 200 thousand lives in the Indonesian Province of Aceh. Economically the estimated impact of the disaster, measured at replacement cost, is calculated at US$4.5 billion, equivalent to 2.2 percentage points of national GDP or 97 percent of Aceh’s GDP. Absent the recovery effort the direct impact of the tsunami would have lowered national GDP growth by 0.1-0.4 percent in 2005. However, unprecedented donor support is expected to fund activities that will increase growth by 0.3-0.5 percent leaving the net impact close to zero.


The government is currently laying out its relief and recovery strategy with continuing broad donor support. The donors grouped in the CGI (Consultative Group on Indonesia) pledged US$1.6 billion of assistance to Aceh related activities in late January. Additional substantial assistance is coming from private donations from companies and NGOs. On March 26th, the government released a draft 11 volume Aceh Reconstruction Masterplan. Key recommendations include:

a new reconstruction implementing agency with broad oversight authority and strong governance controls located in Banda Aceh (capital of Aceh province);
the development of community based solutions to restoring land tenure and housing compensation; and
a decision against a widely debated exclusion zone that would have prevented people from returning to their homes.
However, despite the tragic tsunami, market sentiment has been very strong as indicators continue to improve and confidence strengthens. The Jakarta stock exchange composite index has risen 33 percent since the inauguration of the new government. Other positive signs include improving international and domestic risk premiums, for example, a declining yield spread over US treasury bonds for Indonesian international paper. In response, international rating agencies raised credit ratings, for example, Fitch raised the rating from B+ to BB- in January 2005. S&P also raised rating from B to B+ in December 2004. In Q4 2004, the economy expanded by 6.7 percent the highest quarterly growth rate since 1997.

For the full year 2004 growth was 5.1 percent above expectations and the budget projection at 4.8 percent. Economic drivers shifted from consumption to investment with second half 2004 investment growing a striking 19 percent, while private consumption grew by 4.4 percent and government consumption declined by 2.5 percent. The investment to GDP ratio rose from 18.9 percent in 2003 to 21.0 percent in 2004, the first time it has been over 20 percent since the crisis, but still well below pre-crisis levels closer to 30 percent. In 2004 Indonesia also reached highs in exports and imports. Goods exports and imports reached US$71 billion and US$46 billion respectively. However, a long term lack of investment worsened the oil balance from –US$2.4 billion in 2003 to –US$5.0 billion in 2004, although the overall oil and gas balance remained positive at US$1.6 billion, due to offsetting gas sales. With rapidly rising imports, including capital goods, the current account surplus shrank significantly to US$2.9 billion, much less than US$8.1 billion in 2003. Another positive sign was the turn around in net FDI to a positive US$1.0 billion, again the first positive balance since the crisis.

The fiscal outlook also improved especially with the cut in fuel subsidies. On March 1st average fuel prices were increased by 29 percent. Household kerosene prices were left unchanged at Rp.700 per liter (about 7 US cents) while non-kerosene prices were increased between 22-39 percent, for example premium gasoline was increased by 33 percent. The 29 percent average increase in fuel prices is estimated to reduce fuel subsidies by Rp.20 trillion or over 2 billion USD. The government is proposing to reallocate about half these savings to maintaining the budget deficit target (below 1 percent) and half to programs designed to alleviate poverty especially for programs on education (scholarships), healthcare, and rural development.

According to Bank estimates, the increase in fuel prices will add 1.5-2 percentage points to the inflation rate. While concerns about the effectiveness of program targeting remain, the impact on growth is expected to be positive as resources are reallocated to more productive (and less regressive) areas such as infrastructure and social spending. The preliminary 2004 budget outcome indicates a deficit of Rp.29 trillion (1.2 percent of GDP) with fuel subsidies at Rp.69 trillion (3 percent of GDP). This decline in the budget deficit from 2003, when it was 1.7 percent, combined with a 13 percent increase in nominal GDP resulted in a continued improvement in the government debt to GDP ratio which fell from 60 percent in 2003 to 54 percent in 2004.

The government has just submitted a revised 2005 budget to address increased expenditures and revenues related to Aceh, the Paris Club moratorium, higher oil and fuel prices (and their impact on subsidies) as well as some changes to macroeconomic assumptions. In this new submission the budget deficit is estimated at 0.8 percent of GDP, an increase of 0.1 percentage points over the current 2005 budget. Expenditures related to Aceh, on budget, are estimated at Rp.11 trillion (about 1.2 billion USD).

The Bank foresees a continuing pick up in the economy, with real GDP growth rising to 5.5 percent in 2005 and 6.0 percent in 2006. The pick up in GDP growth will be based on the current economic and investment momentum and a relatively supportive external economic environment. Indonesia’s capacity utilization is historically high, in other words, the potential demand for investment is strong. Fiscal policy is beginning to evolve from ‘macroeconomic stability through fiscal consolidation’ to ‘support for higher quality growth’ and more resources will be available for capital spending. However sustaining growth beyond the current cyclical upturn will require continued reforms to the investment climate.
 

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Discussion Starter · #14 ·
Investment key to Indonesia growth, says World Bank
Wed Apr 27, 2005 12:00 AM ET

WASHINGTON, April 27 (Reuters) - Indonesian economic growth should reach 5.5 percent in 2005 and hit 6.0 percent next year, but the challenge will be maintaining that momentum, the World Bank said on Wednesday.
"This growth is expected to be driven by economic and investment momentum, together with a supportive external economic environment," the development lender said in its twice-yearly report on East Asian economies.


It said increases in investment and productivity will be necessary to keep growth nourished at around 6 percent.

For the past few years consumption, supported by rapid growth in consumer credit, were the biggest drivers of growth in Indonesia, the bank said.

Annual growth in Indonesia last year reached 5.1 percent and the government has estimated it would be between 5.5 and 6.0 percent this year, making it the only Asian economy where growth would exceed last year's pace.

The World Bank said real investment growth will need to average 14 percent and total factor productivity -- a rough measure of efficiency -- will have to be 2.3 percent to 3 percent to keep growth stimulated, the bank added.

It noted that a fuel price hike on March 1 would put upward pressure on prices in coming months as it feeds into transportation costs.

Still, the bank made no comment on the possibility of the government raising interest rates despite a gradual increase in consumer price inflation in January and February.

While Indonesia was one of the countries hardest hit by the Dec. 26 Asian tsunami, damage mainly to the remote Aceh province will have little bearing on overall growth, the World Bank said.

The leading agency for tsunami reconstruction, the World Bank said Indonesia's tsunami damage to assets was about $2.9 billion and the impact on future cash flows are around $1.5 billion.

"The direct impact of the tsunami is estimated to lower the national GDP growth rate by 0.1 to 0.4 percentage points in 2005," the bank said, adding, "However, the final impact would depend on offsetting impact of reconstruction activities."
 

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Wow, rupiah is rebounding back, its not 9570 from 9810 two days ago! I guess BI is on the market right now. And the market is taking profits, so i would say, 9400-9500 for couple weeks from now.

cheers
 

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MP Evans Grp Sells Malaysia Estate, Invests In Indonesia

Wednesday April 27, 2005, 4:58 pm

DJ MP Evans Grp Sells Malaysia Estate, Invests In Indonesia



Edited Press Release



LONDON (Dow Jones)--MP Evans Group PLC said Wednesday it will sale of a 660-hectare Malaysian estate for GBP4.3 million and an Investment in a 12,000-hectare Indonesian oil palm project.


The company said that the transactions represent the first stage of the implementation of the board's new strategy adopted since the Company's recent merger with Bertam Holdings PLC and Lendu Holdings PLC.


The company said: "As described in the documents relating to the merger, the new strategy is to divest the Group's relatively low-earning Malaysian plantations and reinvest the proceeds in the higher-earning Indonesian palm-oil and Australian beef-cattle sectors. With regard, specifically, to Indonesia, the aim is to acquire 50,000 hectares of land which is suitable for oil-palm development, in addition to the Group's existing plantations.


"Sale of Sungei Reyla Estate In line with this strategy, and as part of the means of financing the expansionary programme in Indonesia, we are pleased to announce the sale of the first of the Malaysian plantations, the 660-hectare Sungei Reyla Estate, for a total selling price of RM31.4 million, approximately GBP4.3 million.


"This sale is subject to 5% Malaysian Real Property Gains Tax and the related tax charge is expected to be approximately RM1.4 million (approximately GBP0.19 million). The sale is also conditional upon the approval of the Malaysian Foreign Investment Committee and the Estates Land Board. These permissions are expected to be received within six to nine months."


The company also said Wednesday that it has signed agreements relating to the commencement of a project in the northern part of Bangka Island, which lies off the south east coast of Sumatra, Indonesia.


The project consists of the acquisition and development of approximately 12,000 hectares which will be planted with oil palms and nearby there will be a smallholders' cooperative comprising up to a further 5,000 hectacres. A crude palm oil mill will be constructed to process the fruit from both the project and the smallholders' land. The site is well placed, being near a port from which palm oil can be shipped, and is in an area with suitable rainfall and soil conditions. The project will be managed from within the Group by a Malaysian general manager.


The investment in the project will be routed through an Indonesian company, PT Gunung Pelawan Lestari ("GPL"), which will be owned as to 90% by the Group and 10% by the Indonesian partner, Mr Karli Boenjamin, who is an eminent Indonesian businessman with extensive experience of oil palm developments on the island.


With regard to the financing of GPL, it is anticipated that the total funding requirement will be in the region of US$45 million, with the peak requirement arising in 2009. It is intended that this will be provided by a combination of funds from within the M. P. Evans Group PLC and external loans. The plan is to develop the project at the rate of approximately 4,000 hectares per annum and it will be some six years from now before all of the plantings are considered mature by which time earnings from the first plantings should have commenced. The implementation of the project is conditional upon the necessary local approvals but the board is confident that there should not be any difficulty in obtaining these.


2004 results announcement The preliminary results for 2004 are expected to be announced on 9 May 2005. The figures relate to the results, cash flows and net assets of the Rowe Evans Investments PLC Group as it was at Dec. 31, 2004 - in other words, prior to the merger with Bertam and Lendu. The merger took place on Feb. 2, 2005 when the Company changed its name to M. P. Evans Group PLC and the accounts of the enlarged group will only reflect the merger after that date.
 

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Wow, look at this Forex reserves..no wonder BI has so much power in market intervention.

Indonesia's Forex Reserve up Sharply to US$37.32 BLN in April

JAKARTA, April 27 Asia Pulse - The country's foreign exchange reserve rose sharply to a record high of US$37.32 billion in the third week of April from US$35.96 billion a week before.
In the second week of April the country's foreign exchange reserve fell after hovering between US$36 billion and US$37 billion since February, Bank Indonesia spokesman Erwin Riyanto said on Tuesday.

Erwin said the increase in the third week of April was caused mainly by earnings in and from the sales of government bonds, oil and gas, and foreign loans.

Meanwhile, the primary money in circulation totaled Rp182.2 trillion (US$19 billion) by April 21, up from Rp180.1 trillion a week before.
 

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Discussion Starter · #19 ·
Good news...but Indonesia is only getting a tiny fraction of what THailand will get..

Expanding Toyota to invest more than US$500m in Thailand, Indonesia

TOKYO (AFP): Toyota said Wednesday it will invest more than US$500 million on a major boost for production in Asian hubs Thailand and Indonesia as it tries to take General Motors' crown as top global automaker.

The announcement came just one day after Toyota announced it would become the first Japanese carmaker to build a manufacturing plant in Russia with an investment of $140 million.

Toyota Motor has set a goal of boosting group output 25 percent by 2008 to 9.7 million vehicles from 7.7 million in 2004 to overtake struggling giant, General Motors of the United States.

Toyota said in a statement it would invest 456 million dollars in Thailand, its biggest production base in Asia after Japan.

It will spend $380 million to build a third plant in Thailand in suburban Bangkok. The factory will be able to produce 100,000 Hilux Vigo trucks a year by early 2007.

Toyota also said it will spend 76 million dollars to expand capacity at its Gateway assembly plant in Chachoengsao, about 130 kilometers (80 miles) east of Bangkok, from 110,000 vehicles a year to 200,000 by 2006.

Toyota said Thailand is "positioned as a production and export base for pickup trucks, SUVs (sports utility vehicles) and diesel engines."

Toyota's third biggest Asian production center is Indonesia and it will spend $50 million with its mini-vehicle making subsidiary Daihatsu Motor to boost annual production by nearly half over the next two years to 214,000 vehicles.

Toyota said Wednesday that in the financial year ended March its global output increased 9.2 percent to 6.88 million vehicles, with production at overseas plants up 14.1 percent to 3.13 million.(*)
 

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Discussion Starter · #20 ·
Associated Press
Indonesia Economy May Grow by 5.5 Percent
Wednesday April 27, 7:56 am ET
By Michael Casey, Associated Press Writer
Indonesia Says Economy on Pace to Grow by 5.5 Percent Despite Disasters


JAKARTA, Indonesia (AP) -- Indonesia's economy is on pace to grow by 5.5 percent this year despite the December tsunami and other disasters, the planning minister said Wednesday.
Sri Mulyani Indrawati, in an interview with The Associated Press, predicted that the Dec. 26 tsunami and the March 28 earthquake on Nias island that left more than 129,000 dead and nearly 600,000 homeless would increase the poverty rate in those areas. But she said it would not impact the country's growth rate, since the areas did not contribute significantly to the country's overall economy.

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"This year, the growth target is only 5.5 percent," she said. "We are still very optimistic that we will meet those targets."

She said the government has proposed spending 300 million rupiah (US$31,000 (euro24,000) in each of 11,000 villages across the country to improve schools, roads and bridges and create jobs.

The country's unemployment rate was 9.9 percent at the end of 2004 and government has a goal of reducing it to 5.5 percent by 2009.

"We are going to allocate a significant amount of money ... for building village infrastructure through labor intensive activities," said Mulyani, an economist who previously worked for the International Monetary Fund.

"It's shown in the past that it was always effective in creating jobs and sustaining income level of the people," she said. "We are not only reducing poverty but creating jobs."

In its twice-yearly report on East Asia, the World Bank said Wednesday that Indonesia's economy was expected to grow by 5.4 percent and that the investment climate was recovering. But it warned that Indonesia was still uncompetitive by international standards, noting that it takes much longer to start a business and wages are higher when compared to regional competitors.

Indonesian President Susilo Bambang Yudhoyono took office in October with a promise to crackdown on corruption and boost foreign investment. But so far, Yudhoyono's corruption campaign has netted few high-profile suspects and legislation aimed at improving the investment climate has yet to reach parliament.

Mulyani denied that investors were growing impatient with the government's slow pace of reform, only moderating what she admitted were "high expectations" of Yudhoyono when he took office.

"The expectations were very high with this new government," she said. "But when they saw there were a lot of problems that couldn't be addressed instantly, then everyone (reassessed) their expectations. It could be healthy because it will give the government time to work."
 
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