BKPM Chairman : A targeted approach to tax holidays
IN THIS UPDATE:
  • Energy
  • Finance
  • Food & Agriculture
  • ICT
  • Politics
  • Other

Looking Ahead...

  • Secretary of Commerce, Gary Locke, will lead a Clean Energy mission to China and Indonesia in May. Applications are available online at www.trade.gov/cleanenergymission
    Please note, the application deadline has been extended to Friday, March 12.
  • The Council will be providing a briefing paper to the National Security Council on the "sense" of American business in Indonesia. To provide input or for more information please contact Mike Orgill at morgill@usasean.org

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Energy

Pertamina names new directors, The Jakarta Post, Feb 22

State oil and gas firm PT Pertamina has reshuffled its board of directors and added a new directorate aimed at supporting the company's ambitious plans for upstream expansion. The new directorate is the investment planning and risk management directorate, to be headed by the company's former finance director, Frederick S.T. Siahaan.

Indonesia's Gas Reserves to Last for 59 More Years: Oil Minister, Antara, Feb 22

Indonesia's gas reserves that could be productive have reached 170 trillion standard cubic feet (TSCF), Energy and Mineral Resources Minister Darwin Zahedy Saleh said. In order to guarantee gas supply in the country, a ministerial regulation requires gas contractors to set aside 25 per cent of their production for domestic consumption.

Finance

A targeted approach to tax holidays, The Jakarta Post, Feb 22

According to BKPM Chairman, Gita Wirjawan, For tax holidays to produce a positive impact on Indonesia’s development goals, discretionary regulation is supremely critical and must be applied on two separate fronts. First, examining tax holidays in the region would allow Indonesia to set reasonable parameters for what it in turn should offer. This also would inform Indonesia for which sectors it should provide tax holidays. Tax holidays should be used as an instrument of industrial policy to help Indonesia target sectors where its comparative advantages remain untapped or under-leveraged. Second, the benefits and costs of tax holidays must be estimated and evaluated in both quantitative and qualitative terms. Targets for how much tax revenue should be collected and new jobs created from the additional investment, if any, after a certain period of time following their introduction. This standardization would promote transparency and accountability and reduce tension arising from any lack of clarity regarding the timing of economic gains, government agency coordination and ownership, and any disparities in foreign-domestic investor treatment.

Indonesia eyes limits on rights issues for foreigners, Reuters, Feb 22

Hatta Rajasa, co-ordinating economic minister, on Friday told reporters that the government is discussing with Bapepam, the capital markets regulator, whether to allow foreign investors to participate in rights issues by companies which have already reached their foreign ownership limits. He said in cases where foreigners already owned the maximum 49 per cent of a listed Indonesian firm, that company may be prevented from selling shares in a rights issue to foreigners to avoid exceeding the limit.

Eighty Million People Have No Bank Accounts, Tempo, Feb 22

In his keynote speech, President Susilo Bambang Yudhoyono hoped that banks can facilitate the customers, especially those from the low-income groups. “Publicize this information properly,” he said. The president called on banks not to charge customers with any administration fee. In this way, people do not need to worry that their savings would run out if they do not increase their account balance.

Food & Agriculture

Indonesia aims to be world's breadbasket, AFP, Feb 21

Following Brazil's trail, Indonesia is encouraging foreign and local investors to lease huge swathes of fertile countryside and help make the country a major food producer. "Feed Indonesia, then feed the world," was the recent call from President Susilo Bambang Yudhoyono after the government announced plans to fast-track development of vast agricultural estates in remote areas like Papua and Borneo. Between now and 2030 Indonesia expects to become one of the world's biggest producers of rice, maize, sugar, coffee, shrimp, meats and palm oil, senior agriculture ministry official Hilman Manan said.

Orangutan survival and the shopping trolley, BBC, Feb 22

Many of the biscuits, margarines, breads, crisps and even bars of soap that consumers pick off supermarket shelves contain an ingredient that is feeding a growth industry that conservationists say is killing the orangutans. The mystery ingredient in the mix is palm oil - the cheapest source of vegetable oil available - and one that rarely appears on the label of most products. The orangutans, displaced as the trees of old-growth forests are burned and at times killed by workers who see them as a nuisance in the logging process, are not the only victims of the runaway growth in palm oil - scientists say there is a wider environmental price being paid.

ICT

Indonesia rounds up students in cybercafes, AFP, Feb 22

Indonesian police raided Internet cafes Monday and rounded up dozens of students who were skipping school to play computer games or chat with their friends online. Despite low wages and poor Internet infrastructure, Indonesians are among the world's most dedicated users of social networking sites like Facebook. The raids come amid domestic debate over how to balance freedom of speech and access to information with protecting society from Internet sites deemed to be indecent or inciting violence.


Politics

Top party leaders to meet in Cikeas: Idrus, The Jakarta Post, Feb 22

Leaders of political parties that formed a coalition to support President Susilo Bambang Yudhoyono are expected to hold a meeting at the President’s private residence in Cikeas in the West Java regency of Bogor later on Monday. Among the attendants will be Golkar Party chairman Aburizal Bakrie, Golkar secretary-general Idrus Marham told kompas.com on Monday. Idrus, who also heads the House of Representatives’ inquiry committee on the Bank Century bailout, said the meeting had nothing to do with the House’s investigation.

Indonesian president vows equal treatment, opportunities for Indonesian-Chinese, Xinhua, Feb 20

Indonesian President Susilo Bambang Yudhoyono promises Saturday to improve the government's efforts in guaranteeing civil rights of ethnic Chinese living in the country. Addressing the national celebration of the Chinese New Year, the president said that he would order religious affairs minister, national education minister, central and regional governments to continue their efforts in securing civil rights of ethnic Chinese following the recognition of their existence and their belief, Confucianism, as one of the religions officially regarded by the state.


Others

Governors get wider powers on permits, The Jakarta Post, Feb 19

Governors have been given more administrative powers in supervising regents and mayors in their day-to-day activities including in settling disputes over overlapping mining areas, Home Minister Gamawan Fauzi has said. Gamawan said in Jakarta on Thursday that a new government regulation issued on Tuesday gave governors a bigger role in the supervision of budgets, development plans and programs at regency and municipal levels.

Indonesian to stand trial over hotel bombings, AP, Feb 22

An Indonesian militant flew to Saudi Arabia to raise money to finance suicide attacks on two Jakarta hotels that killed seven and injured more than 50, prosecutors will allege in court Tuesday. According to an indictment seen by The Associated Press, prosecutors say 25-year-old Mohammad Gabriel Abdul Rahman had ties to alleged regional terrorist mastermind Noordin Top and tried to raise money to fund the July 17, 2009, bombings at the J.W. Marriott and Ritz Carlton hotels. Rahman, who has been charged with violating the country's Anti-Terror Law, goes on trial Tuesday at the South Jakarta District Court. He faces up to 15 years in prison if convicted. Rahman has denied any involvement in the bombings.

END MEMO

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