Indonesia Clippings: Investment Negative List Renovated, Language Revisions Remain

Investment Negative List Renovated, Language Revisions Remain, March 22
IN THIS UPDATE:
  • Investment Negative List
  • Automotive
  • Defense & Security
  • Energy
  • Financial Services
  • Food & Agriculture
  • ICT
  • U.S. Relations
  • Other

Looking Ahead...
Council Members will have the opportunity to serve as participants in the Peer Review process of the project concept papers for a Millenium Challenge Corporation grant to Indonesia. For more information, please contact Mike Orgill at morgill@usasean.org.

Mr. Budi Mulya, Deputy Governor of Bank Indonesia, will be in Washington D.C. for meetings on April 16. Mr. Mulya is in charge of monetary operations and foreign exchange management. For more information, please contact Mike Orgill at morgill@usasean.org.

Minister Mari Pangestu will be visiting Seattle, Washington on May 3 and Washington, D.C. on May 5 as part of the ASEAN Trade Minister's Roadshow, which is being arranged by the US-ASEAN Business Council and USTR. For more information, please contact Marc Mealy at mmealy@usasean.org.

The US-ASEAN Business Council is in the process of redoing its Indonesia mailing list.  If you have colleagues that did not receive this email or if these emails should be directed to someone else in your company, please contact Mike Orgill at morgill@usasean.org.  

Investment Negative List Renovated, Language Revisions Remains, Tempo, March 19
The government has completed its draft revision of the Presidential Regulation on the Investment Negative List (DNI). According to Gita Wirjawan, Head of the Investment Coordinating Board, this final draft of new regulations will be submitted to the President to be signed at the end of this month or early next month.

He explained that the construction sector and the telecommunications tower will be 100 percent for local entrepreneurs. The telecommunications tower issue resulted in the toughest discussions because BKPM want to open the sector to foreign investors. Ownership of hospitals under the previous DNI rules limited foreign investors to Surabaya and Medan, but it is now open for the entire region but limited to 67 percent. "That does not include pharmacies, hospitals and clinics," he said. In the agricultural sector, he said, ownership of foreign investors are limited to 49 percent. As for the capital markets sector, he said, the rules of foreign ownership restrictions apply only to non-shareholders' portfolios.

Automotive

Govt to restrict subsidized fuels for owners of luxury cars, The Jakarta Post, March 12
Private owners of luxury cars will soon be prohibited from using subsidized fuels, under a planned restriction by the Energy and Mineral Resources Ministry. Minister Darwin Zahedy Saleh hinted at the plan Friday, but declined to say what type of vehicles constituted luxury cars. “We’re heading toward [implementing the policy],” he said. “Private owners of cars of a certain classification are not supposed to receive the subsidy. We’ve begun designing and testing the policy.”

Defense & Security

Defense University to develop disaster management program, The Jakarta Post, March 17
The Defense University (Unhan) is set to develop a disaster management program in response to the country’s vulnerability to calamities. Unhan, run by the Defense Ministry, is also planning to develop a postgraduate program in defense economy in addition to its two existing study programs: the National War College and the Institute for Defense and Strategic Studies; as it commemorates its first-year anniversary this month. "This year Unhan will develop disaster management and defense economy study programs," Defense Minister Purnomo Yusgiantoro said in his speech that marked the university’s first anniversary at the Presidential Palace on Wednesday. "Then in the coming years we will open other study programs in line with the need of the country's defense sector."

Energy

World Bank Helps Indonesia Increase Geothermal Energy, New York Times, March 22
The World Bank has announced $400 million to help double Indonesia's geothermal energy capacity, part of a broad effort at the bank to ramp up climate change spending in the developing world. "Indonesia has the largest geothermal energy potential in the world. The co-financing will help Indonesia reduce the use of fossil fuels to meet its rapidly growing energy needs. It also gives a clear signal on the practical actions developing countries can take to combat global climate change," Katherine Sierra, the World Bank's vice president for sustainable development, said in a statement.

Financial Services

Barclays Reorganizes Business, Exits Indonesian Unit, Businessweek, March 22
Barclays Plc, the U.K.’s second- biggest bank, reorganized the company into three separate divisions and plans to exit a unit in Indonesia at a total cost of about 100 million pounds ($150 million). The charge will be taken at Barclays Corporate, a lender to medium-sized and large businesses that will be run alongside investment banking, London-based Barclays said today in a statement. Barclays will sell or close Bank Akita in Indonesia, which was acquired by former global retail and corporate banking head Frits Seegers in September 2008.

Food & Agriculture

Indonesia lags behind in agribusiness development, The Jakarta Post, March 12
Indonesia is lagging far behind other Asian countries in agribusiness development, Vice President Boediono said in Jakarta on Friday. "Compared with other Asian countries such as Thailand, our agribusiness sector is still at a low level of development," Boediono said in remarks to officially open "Agrinex International Expo 2010" in Jakarta.

Information and Communications Technology

BKPM chief backs down, telecom towers remain closed, The Jakarta Post, March 22
After a few months of uncertainty, the government finally indicated Thursday that investment in telecommunication towers would remain closed to foreign investors. Investment Coordinating Board (BKPM) chairman Gita Wirjawan, who initially floated the government’s initial plan to open the sector to foreign investors, threw in the towel and announced that his office would abide by the 2008 and 2009 ministerial decrees that effectively closed the telecom towers from foreign investment. “BKPM respects the decrees and will use them as a reference in issuing investment licenses on telecommunication towers,” Gita told a press briefing at his office.


U.S. Relations

Immelt Wants Obama to ‘Sell Hard’ When in Indonesia, Businessweek, March 22
General Electric Co. Chief Executive Jeffrey Immelt wants Barack Obama to “sell hard” in Indonesia as he extols U.S. expertise in industries such as clean energy. He may have to play catch-up -- Premier Wen Jiabao will make China’s sales pitch in Jakarta next month. President Obama’s trip to his childhood home, which has now been delayed until at least June, will be key to a pledge to boost U.S. exports and “lead the global economy” in providing alternatives to fossil fuels. Southeast Asia’s biggest economy, which Immelt included last week among nations that may provide the growth “surprise” of the next decade, has the world’s largest geothermal reserves.

US eyes Indonesia trade surge but presses reform, AFP, March 18
The United States sees vast potential to expand trade with Indonesia but Jakarta needs to undertake economic reforms, a top official said Wednesday ahead of President Barack Obama's visit. Commerce Secretary Gary Locke said that the administration saw major opportunities in the energy sector as Indonesia seeks to meet a sharp rise in demand while curbing carbon emissions blamed for global warming.

RI up in arms as country re-enters US watch list, The Jakarta Post, March 19
The United States has once again put Indonesia into its Priority Watch List of countries with rampant copyright infringement, despite claims by the government in Jakarta of progress on that front. Eleven other countries are included on the list, such as China, India, Thailand and the Philippines. The Indonesian government has called for the country to be struck off the list, citing its efforts to uphold intellectual property rights (IPRs).

US lowers antidumping duties on RI polyethylene bags, The Jakarta Post, March, 22
The United States’s recent decision to lower temporary antidumping duties on Indonesian polyethylene retail carrier bags from 67.18 percent to 9.18 percent mean a new chance for Indonesian producers to re-enter the US plastic bag market. Indonesian Downstream Plastic Producers Association (Aphindo) chairman Tjokro Gunawan said Sunday he was satisfied with the US’ decision. “We are happy. The opportunity for [Indonesian] plastic bag producers’ to export [to the US] is now open again,” he told The Jakarta Post.

Indonesia says understands Obama trip delay, Reuters, March 22
Indonesia understands the reason for President Barack Obama's last-minute cancellation of his visit to Jakarta and Bali, officials in the Southeast Asian nation said on Friday. But ordinary Indonesians expressed disappointment that Obama would not be returning to the place where he lived as a child.

Other

Indonesia Walks a 'Tricky' Path Toward Growth and Sustainability, New York Times, March 22
Four decades of aggressive development have stripped Indonesia's forests nearly half bare since the time when a young Barack Obama lived there from 1967 to 1971. Its ultimate success, unlike China's, has far less to do with fossil fuels and clean energy and much more to do with the land. By including land-use emissions, the World Bank surprised many by declaring Indonesia the world's third-largest greenhouse gas emitter in 2007. It is a ranking that Indonesian officials, in an interview this month, disputed as unfair and out-of-date.

Indonesia Prepares for Visit by Chinese Leader, Jakarta Globe, March 19
Chinese Prime Minister Wen Jiabao will visit sometime in April, Marty said. Indonesia and China will “push forward on the issue of strategic partnership between the two countries,” he told reporters at a press briefing. Defense cooperation will be one of the key components discussed in the bilateral meeting. Other issues include economic, investment, and trade agreements.

Strong Economy Sets Stage For Reforms: Sri Mulyani, Jakarta Globe, March 18
Finance Minister Sri Mulyani Indrawati said on Thursday that accelerating economic growth this year should provide momentum to push ahead with further economic reforms, while acknowledging that change was sometimes painful and could create “sparks.” Sri Mulyani told a seminar held by Citigroup that some of the government’s major challenges this year included pushing ahead with reforming civil institutions as well as removing obstacles to economic growth.

Indonesia needs to boost investment to generate growth, Antara, March 21
Indonesia needs to attract more investment to enable it to boost economic growth that is vital for business expansion, particularly in the face of predicted-improvement of economic conditions beginning this year. Economic growth is expected to improve in 2010 and to serve as a positive factor for businesses to expand, company executives say. "We will use this year as a golden year," General Manager of PT Coca-Cola Bottling Indonesia Area for East Java, Dwi Harjono, said.

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