| Regional Affairs
Looking Beyond Jakarta: Mayors Promote Bandung, Surabaya as New Investment Havens Jakarta Globe 13th Nov 2014
As the Greater Jakarta area gets more developed and more crowded every year, mayors from across the country are trying to seize the opportunity by promoting their cities as the next haven for investment. At the US-Indonesia Investment Summit held in Jakarta on Wednesday, Bandung Mayor Ridwan Kamil and Surabaya Mayor Tri Rismaharini met with 41 major US investors as well as domestic businesspeople to share the story of their cities’ progress and plans for the future. “If you want to see typical growing cities in Indonesia, you have to see Surabaya and Bandung. These two are the new economic machines beyond Jakarta,” Ridwan said.
RI demands trade ease for 5 commodities The Jakarta Post 13th Nov 2014
In his usual straightforward style, President Joko “Jokowi” Widodo demanded that 21 Pacific Rim countries and territories lift trade restrictions on Indonesia’s primary commodities: palm oil, paper, rubber, rattan and marine products. The President, who assumed office on Oct. 20, conveyed the request during the prestigious powwow of leaders at the Asia-Pacific Economic Cooperation (APEC) summit in Beijing, China, on Tuesday. Jokowi also conveyed his demand during several bilateral meetings with leaders of powerhouse nations, including US President Barack Obama, on the sidelines of the summit on Monday.
Did Jokowi’s APEC Speech Fall Short? Wall Street Journal 13th Nov 2014
The message Indonesian president Joko Widodo sent during his first international summit Monday morning was crystal clear: Now is the time to invest in Indonesia. The way he presented it, however, received mixed reactions, with some observers praising his address, delivered in English, and others saying it felt amateurish and focused too much on domestic concerns. “Basically, he was using a campaign speech for an international audience,” said Yohanes Sulaiman, a lecturer at Indonesian Defense University in Jakarta. “I mean, talking about cutting fuel subsidies for seeds for farmers?”
Malaysia to sign MoU with Indonesia on haze The Sun Daily 13th Nov 2014
The Natural Resources and Environment Ministry is set to sign a new Memorandum of Understanding with Indonesia on measures to curb peat soil fires which causes the haze pollution plaguing neighbouring countries. Its Deputy Minister Datuk Seri Dr James Dawos Mamit said the ministry, through the Environment Department, had carried out several peat soil restoration programmes in the Riau region in Sumatra, Indonesia, according to the agreement signed in 2008. The programme aims to control the water reduction in the peat soil by building barriers around the check dams, which could avoid peat soil fires during dry and hot seasons. "The time frame under the present MoU will end this year and we will be signing a new agreement soon," he said in reply to a question by Dr Michael Jeyakumar Devaraj (PSM-Sungai Siput) in the Dewan Rakyat today.
More ASEAN non-state actors expected to participate in disaster management The Jakarta Post 18th Nov 2014
ASEAN will encourage more non-state actors from its member countries to participate in its disaster-management program after the ASEAN Economic Community (AEC) comes into being on Dec. 31, 2015, an official has said. ASEAN Coordinating Centre for Humanitarian Assistance on disaster management (AHA Centre) executive director Said Faisal, said that at the moment, disaster management was largely shouldered by the governments of ASEAN's 10 member states.
National Affairs
Govt slashes fuel subsidies The Jakarta Post 18th Nov 2014
Less than a month after assuming the country’s highest public post, President Joko “Jokowi” Widodo hiked the prices of subsidized fuel on Monday in a bid to reallocate the ever-increasing funds spent on fuel subsidies to finance the government’s development programs. Speaking in a press conference at the Presidential Palace, President Jokowi said the price of subsidized Premium gasoline would increase from Rp 6,500 (53 US cents) per liter to Rp 8,500, while the price of diesel would be raised from Rp 5,500 to Rp 7,500 per liter. Kerosene remains unchanged at Rp 2,500 per liter.
Ahok becomes Jakarta governor today The Jakarta Post 19th Nov 2014
Acting Jakarta governor Basuki “Ahok” Tjahaja Purnama will be inaugurated as the city’s 17th governor for the period of 2012 to 2017 by President Joko “Jokowi” Widodo at the Presidential Palace on Wednesday. The Home Ministry’s director general of regional autonomy, Djohermansyah Djohan, said on Tuesday that the presidential decree on Ahok’s appointment as governor had been signed. “The decree states that Ahok is appointed as the governor for the remaining period of 2012 to 2017,” he said.
‘Think big’, Jokowi tells ministers, state firms The Jakarta Post 18th Nov 2014
During his first Cabinet meeting after a week-long state visit to several international fora, President Joko “Jokowi” Widodo discussed the nation’s most pressing economic issues: infrastructure, fuel subsidies and the investment climate. On attracting investors to invest in infrastructure projects, the President asked his ministers and state-owned companies to “think big” in supporting the country’s development. Speaking at a press conference after a Cabinet meeting on Monday, Coordinating Economic Minister Sofyan Djalil said the President, for example, had instructed his administration to ensure that every infrastructure project had long-term benefits for both the people and investors.
Indonesia exploits oil price weakness to scrap fuel subsidies Fortune 18th Nov 2014
President uses four-year low in oil prices to close budget, current account gaps. Indonesian President Joko Widodo all but eliminated the country’s subsidies for fuel use, ordering steep increases in regulated prices for gasoline and diesel. The move, which fulfils a key pledge of Widodo’s election, will raise domestic gasoline prices by around 31%, and diesel prices by 36%.
Jakarta Readies for Floods as Rainy Season Begins The Jakarta Globe 17th Nov 2014
Authorities in Jakarta are gearing up for the rainy season and accompanying floods by putting soldiers on standby and readying evacuation shelters across the city. Jakarta’s acting governor, as well as representatives from the Jakarta Police and the Armed Forces stationed in the capital, briefly outlined preparations to combat this year’s flooding on Monday. Basuki Tjahaja Purnama, who is scheduled to be inaugurated as governor on Tuesday, said at least 600 community units were expected to be affected by flooding this year. “I will inspect the pump stations and I have asked the regional secretary and the head of Jakarta Disaster Mitigation Agency to do the same,” he said.
Indonesia Raises Fuel Prices as Jokowi Enacts Key Pledge Bloomberg 17th Nov 2014
Indonesian President Joko Widodo raised fuel prices to reduce state energy subsidies, enacting a key election pledge less than a month after taking office to narrow the budget deficit and free funds for development plans. The price of subsidized gasoline increased to 8,500 rupiah ($0.70) a liter from 6,500 rupiah effective today, Widodo told reporters in Jakarta late yesterday. Diesel has been raised to 7,500 rupiah a liter from 5,500 rupiah, he said.
Defense & Security
Jokowi declares war on illegal fishing The Jakarta Post 18th Nov 2014
Responding to rampant illegal fishing in the country’s oceans, President Joko "Jokowi" Widodo has instructed law enforcers to take stern actions against foreign ships stealing fish from Indonesian waters, including by sinking them on the spot. Delivering his remarks in a meeting with the participants of the National Resilience Institute's (Lemhannas) annual training, President Jokowi said on Tuesday that Indonesia lost around Rp 300 trillion annually from illegal fishing and needed to immediately take firm action to avoid further losses.
Jokowi Signals Break With ‘Thousand Friends’ Foreign Policy The Jakarta Globe 17th Nov 2014
Following a week of foreign visits President Joko Widodo has returned to Indonesia and given a strong signal he plans to break from his predecessor’s a “thousand friends, zero enemies” foreign policy. The president, fresh from a series of multilateral meetings last week — including APEC in Beijing, the Asean Summit in Myanmar and the G-20 in Australia — told reporters upon arrival in Jakarta on Sunday he would prioritize diplomatic relationships that provided significant benefits for Indonesia. “Our [foreign] policy is free and active, befriend all countries but [we will put first] those who give the most benefits to the people,” Joko said. “What’s the point of having many friends but we only get the disadvantages? many friends should bring many benefits.”
Indonesia mulls replacing F-5 fighter jets People's Daily 13th Nov 2014
The Indonesian military is now weighing advanced fighter jets to replace the F-5 E/F Tiger II light attack planes which have been in service with its air forces in the last three decades. Three fighter jets originally produced in Russia, Sweden and the United States have been shortlisted to replace the Indonesian 14th Squadron based in Madiun, East Java. They were Sukhoi Su-35, JAS-39 Gripen and F-16 Block 52+.
Economics
Markets Rally as Indonesia Cuts Fuel Subsidy Wall Street Journal 18th Nov 2014
Indonesian sovereign bond yields fell to their lowest level in six months Tuesday and both the rupiah and the local stock market rallied after the government slashed the country’s expensive fuel subsidies. The move was broadly welcomed by economists and investors, who are optimistic that it will help to plug a giant hole in Indonesian government finances and free up spending for other programs that could help boost economic growth. Economists estimate the cut could save Indonesia almost US$8 billion by the end of 2015.
Bank Indonesia Holds Key Interest Rate for 12th Month as Current Account Deficit Narrows The Jakarta Globe 13th Nov 2014
Indonesia’s central bank, Bank Indonesia, maintained the benchmark interest rate at 7.5 percent on Thursday for the 12 straight month in an ongoing effort to narrow the current account balance, despite the nation’s economic slowdown. The central bank decided to hold the lending facility rate at 7.5 percent and the deposit rate at 5.75 percent, Bank Indonesia governor Agus Martowardojo said after the monthly board meeting in Jakarta on Thursday. The governor said that Indonesia current account — which is the widest account for goods and services exchange, and income and remittance transfer across borders — narrowed to 3.07 percent of gross domestic product compared with 4.27 percent of GDP in the second quarter.
Indonesia’s Q3 Current Account Deficit Narrows to 3.07% of GDP The Jakarta Globe 13th Nov 2014
Indonesia’s current account deficit in the third quarter narrowed to 3.07 percent of gross domestic product compared with 4.27 percent in the second quarter and 3.9 percent in July-September 2013, Bank Indonesia’s governor said on Thursday. Between June and November last year, Bank Indonesia raised its benchmark interest rate 175 basis points to shrink the then- ballooning current account deficit. The tightening has contributed to a slowdown in this year’s economic growth rate.
Energy
Jokowi appoints former KPK official to lead SKKMigas The Jakarta Post 19th Nov 2014
President Joko "Jokowi" Widodo appointed on Tuesday an accountant, Amien Sunaryadi, a former top official with the Corruption Eradication Commission (KPK), to lead graft-ridden Upstream Oil and Gas Regulatory Special Task Force (SKKMigas). Energy and Mineral Resources Minister Sudirman Said said at the Presidential Palace on Tuesday that Jokowi had chosen Amien to help reform the agency, which is responsible for regulating and overseeing the operation of oil and gas companies such as Chevron, ExxonMobil, BP and Total. "Amien will be inaugurated today. He will lead the reform of the agency," said Sudirman.
Middle class shifting to non-subsidized fuels The Jakarta Post 19th Nov 2014
Following the government’s decision to raise subsidized fuel prices, middle-class motorists have shifted to non-subsidized fuels since the price gap has narrowed. President Joko “Jokowi” Widodo on Monday evening announced the new price of subsidized Premium gasoline, setting it at Rp 8,500 (70 US cents) from previously Rp 6,500. That compares with the price of non-subsidized Pertamax — Rp 10,200 per liter — which is driven by market price, meaning that the difference has narrowed to Rp 1,700 from Rp 3,700 per liter previously.
Public transport drivers in Banyumas on strike against fuel-price hike The Jakarta Post 19th Nov 2014
Drivers of public transportation in Banyumas, Central Java, went on strike on Wednesday to protest the increase in subsidized fuel prices. The strike hit thousands of passengers. “How can I get to school? There’s no public transportation here. How can all the public transportation drivers be on strike?” said Farid, 18, a senior high school student in Purwokerto, on Wednesday. He told The Jakarta Post that he had been waiting for a public minivan for more than one hour, but could not find any.
Gerindra rejects fuel price hikes The Jakarta Post 19th Nov 2014
The Gerindra Party faction at the House of Representative has urged President Joko “Jokowi” Widodo to reverse the government’s decision to increase fuel prices. Gerindra faction head Ahmad Muzani said on Wednesday that Jokowi had increased prices at the wrong time as brent crude oil had fallen to about US$74 per barrel. “Jokowi made a sudden decision that shocked the people only 28 days after he took office. The decision was not in line with his campaign [during the presidential election],” he said as quoted by kompas.com
Public Transport Operators, in Road Rage, Set to Protest Fuel Price Hike on Wednesday The Jakarta Globe 18th Nov 2014
The National Road Transport Operators Association, which represents public transportation owners and workers in the sector, called on its members across Indonesia to strike on Wednesday in protest of the government’s decision to raise subsidized fuel prices by more than 30 percent without giving them any incentive. “I just landed in Jakarta after attending a national works meeting [mukernas],” said Eka Sari Lorena, chairwoman of the group known as Organda, in a telephone interview with the Jakarta Globe on Tuesday after arriving from Semarang, Central Java. “The outcome is we plan to undertake a massive strike starting tomorrow,” said Eka, who is also a director at Lorena Group, a large land transportation company. “We regret that the government’s decision to raise the subsidized fuel price did not bring the issue to our attention. We are not given privileges for subsidized fuel, but we serve the needs of many people.”
Govt Moots Floating Subsidized Fuel Price Next Year The Jakarta Globe 18th Nov 2014
The Indonesian government will consider floating the price of subsidized fuel to keep the subsidy at a fixed amount, Vice President Jusuf Kalla said on Tuesday. “Next year we’ll calculate and determine the amount of the fixed subsidy,” Kalla said, adding that the government would discuss the issue with the House of Representatives. “We’ll suggest a permanent fixed subsidy rate, whether it will be Rp 1,000 or Rp 2,000 [8 US cents or 16 cents] per liter.” With the subsidized amount fixed, the fuel price will be subject to change over time, Kalla stressed. At present, the price at the pump is fixed, and the subsidy is adjusted based on the difference between that and the fluctuating global oil price. Kalla said there were many factors to consider in determining the fixed subsidized amount, but added he was confident that the new policy could be implemented next year.
Faisal Basri Appointed as Oil, Gas Mafia Eradication Team Chief Tempo 17th Nov 2014
The Energy and Mineral Resources (ESDM) Ministry has officially appointed Faisal Basri as chief of the Oil and Gas Governance Reform Team. Faisal and the team will provide the ESDM Ministry with recommendations related to oil and gas management. “A systematical problem must be solved with a system,” ESDM Minister Sudirman Said said at his office on Sunday, November 16, 2014. Sudirman issued a decision letter on the establishment of the oil and gas governance reform team and Faisal’s appointment as the chief. The team will serve four tasks related to oil and gas affairs, namely reviewing permit procedures, restructuring institutional affairs related to oil and gas management, accelerating oil and gas law revision and revising business process to prevent illegal practices.
Indonesia Raises Subsidized Fuel Prices by Rp 2,000 a Liter The Jakarta Globe 17th Nov 2014
Indonesia raised subsidized fuel prices by an average Rp 2,000 per liter, in an attempt to curb fuel usage and narrow the gaps in the current account and the state budget. The price for low-octane gasoline, or Premium, will rise to Rp 8,500 per liter, from Rp 6,500. Subsidized diesel was raised to Rp 7,500 per liter from Rp 5,500. The prices would go into effect at midnight on Monday. The move would also help to reduce state expenses on the subsidy and that money could be used for other programs such as education and health care. President Joko Widodo announced the price increases at around 9:10 p.m. on Monday in an address that was broadcast via television.
Chevron Geothermal abandons Lampung project The Jakarta Post 13th Nov 2014
Chevron Geothermal Indonesia has handed over its working area in Lampung, Sumatra, to the local government, amid increasing concerns on the realization of the country’s extensive plans to tap into volcanic power. The director general for renewable energy at the Energy and Mineral Resources Ministry, Rida Mulyana, said that Chevron Geothermal had decided to return its working area in Suoh-Sekincau, Lampung, to the local administration.
Ministry to continue biodiesel mixing despite low realization The Jakarta Post 13th Nov 2014
The Energy and Mineral Resources Ministry’s renewable energy directorate general is optimistic it can maintain its policy of blending biodiesel with diesel fuel, despite the program’s realization remaining below target. Figures from the renewable energy office show that only 1.2 million kiloliters of biodiesel were blended during the first nine months of the year, far below the government’s initial target of blending 4 million kiloliters by the year’s end.
Oil majors praise Indonesia’s new approach to investment ASEAN Investor 13th Nov 2014
Efforts by Indonesia’s new administration to attract investment to the country’s troubled energy sector are being viewed favourably by energy giants Exxon Mobil and Chevron. Graft, regulatory, legal and contractual uncertainties have undermined energy investment in Southeast Asia’s biggest economy. Aging wells and a lack of exploration have led to declining output and the former OPEC member is now a major fuel importer with soaring energy demands. President Joko Widodo has ordered his cabinet to simplify bureaucracy and de-bottleneck problem areas, Widhyawan Prawiraatmadja, a special assistant to the new energy minister, said on Wednesday. “We are facing a daunting task to bring back confidence, bring back credibility and bring back people who want to do business in Indonesia,” Prawiraatmadja said at an investor conference.
Financial Services
Integration may hit bumpy roads: S&P The Jakarta Post 13th Nov 2014
Banking integration among members of the Association of Southeast Asian Nations (ASEAN) may hit bumpy roads approaching the 2020 deadline as gaps and uneven development remain, rating agency Standard and Poor’s (S&P) has said. According to the latest report by S&P, titled “ASEAN Financial Integration: the Long Road to Bank Consolidation”, the much-anticipated dream of financial system integration still has a long way to go.
Indonesian Stocks to Beat Peers in 2015: JPMorgan Jakarta Globe 19th Nov 2014
New York-based brokerage JPMorgan Chase expects Indonesian stocks to outperform their peers in Asia next year, citing positive sentiment toward the government’s policy of supporting a stable currency and accelerating economic growth. “A competitive rupiah, combined with optimism on the new president, should support investment,” the brokerage said in an e-mailed note on Wednesday. The Jakarta Composite Index closed 0.5 percent higher to 5,127.93 on Wednesday, completing a two-day rally after a hike in the price of subsidized fuel. The benchmark index has gained 20 percent so far this year, the fourth-highest in Asia, after India, the Philippines and Thailand, according to data from the Indonesia Stock Exchange (IDX). JPMorgan said that Indonesia’s coal mining, financial and durable goods companies were undervalued, as measured by their earnings per share. Telecommunication and health care firms on the other hand are expensive, JPMorgan said. “Fuel subsidy reform could boost headline inflation, but we believe investors will support this positive policy move,” the JPMorgan note said.
Online IPO subscription ready by 2015 The Jakarta Post 17th Nov 2014
The Financial Services Authority (OJK) and the Indonesia Stock Exchange (IDX) say that starting in the first half of 2015, investors will be able to purchase shares offered in an initial public offering (IPO) online, as the regulator and the stock market are mulling a plan to allow better access to the country’s capital market. OJK commissioner for capital market supervision Nurhaida said on Friday that an online purchasing plan was being prepared to distribute IPO shares sales more evenly to the clients of brokers registered in the bourse as well as to the public. Nurhaida said that by introducing such a system, everyone would have the opportunity to partake in the IPO shares subscription, which is limited to brokers involved in the offering. “Currently, only underwriters and syndication formed by the underwriters, as well as some brokers, can carry out transactions of shares in the initial market. With the online system, we expect every client with all brokers registered in the bourse to have access to subscribe to shares through their respective brokers as go-betweens,” she explained.
Vietnam: High risks seen in domestic shipping fleet Asia Insurance Review 17th Nov 2014
Hull insurance and shipowners' public liability insurance premiums fell from VND1.85 trillion (US$87.3 million) in 2011 to VND1.667 trillion in 2013, according to a report from the Association of Vietnamese Insurers (AVI). For 11 consecutive years to 2011, insurers incurred losses in marine and shipowners’ liability insurance lines, with compensation for damages always higher than insurance premiums earned. Thus, insurers see high risk in the domestic shipping fleet which comprises of more than 1,700 vessels. A senior executive of a Vietnamese insurance company noted that since the Vietnamese fleet is old and has high risks, insurers require high premiums for it, reported VietnamNet Bridge. Vietnamese insurers also have problems with young, inexperienced crews who man the fleet. He said the highest risks lie in the low quality of the Vietnamese fleets, the owners’ low management skills and the low qualifications of the crew.
Telkom will launch remittance service in Japan The Jakarta Post 14th Nov 2014
The country’s largest telecommunications company, PT Telekomunikasi Indonesia (Telkom), aims to expand its remittance business to Japan this month, targeting Indonesian migrant workers living in the East Asian country. Telkom enterprise and business service director Muhammad Awaluddin said recently that his firm would launch the remittance service in Japan by the third week this month. “We will sign a partnership agreement with Tokyo-based remittance company Kyodai Remittance in the third week of November. We are currently setting up the system,” he said. The remittance transaction value from around 40,000 Indonesian migrant workers in Japan was relatively high, hitting between Rp 10 million (US$820.3) and Rp 15 million per transaction, he said. Awaluddin said that Telkom did not set any specific target from its Japan’s soon-to-be-launched remittance service this year, but it aspired to handle around Rp 100 billion in remittances from Japan next year.
Indonesia sharpens centralised Islamic finance oversight Yahoo News 14th Nov 2014
Indonesia's capital market regulator has signed an agreement with the country's national sharia board to strengthen oversight of the Islamic finance industry, supporting a centralised approach being favoured elsewhere around the globe. A country-level approach to regulating sharia-compliant financial services was pioneered by Malaysia in 1997 and is gaining traction elsewhere as authorities try to standardise industry practices and improve consumer perceptions. The agreement would support efforts by Indonesia's financial services authority, Otoritas Jasa Keuangan (OJK), to formulate rules governing Islamic financial services, said OJK chairman Muliaman Hadad. This would help create new sharia-compliant products, develop a wider pool of sharia scholars, and support education and awareness efforts in the industry, he added.
Indonesia: Property/construction to drive insurance mart in 2015 Asia Insurance Review 13th Nov 2014
One of the largest growth areas for insurers in Indonesia next year is forecast to be commercial property. There should be a lot of new construction taking place as new infrastructure projects usually lead to property expansion, according to the CEO of AIG Insurance Indonesia, Mr Jon-Paul Jones. “The importance of insurance will be very clear if we look at construction projects and infrastructure developments that are taking place in Indonesia. As we have seen growth in prior years, we certainly see growth ahead in many years to come,” Mr Jones said in an interview with The Jakarta Post. “The second driver of commercial division is probably more on the financial lines area, where we have 40% of the market share here in Indonesia. We also have some deep expertise around financial lines products,” he said.
Food & Agriculture
Indonesia Declares War on Illegal Foreign Fishing Boats The Jakarta Globe 18th Nov 2014
Sink or swim: That’s the message the Indonesian government, backed by the Navy, is sending out to foreign fishing fleets poaching inside the country’s maritime borders. Poaching costs the world’s biggest archipelagic nation some Rp 300 trillion ($24.7 billion) a year, President Joko Widodo said at the State Palace on Tuesday. “I said it yesterday: Stop arresting [poachers] already and sink 10 or 20 boats so that they’ll think twice,” the president said as quoted by Detik.com. “But of course, we have to save the people first,” he added.
ICT
Lippo’s ‘Four Days of Family Fun’ Ready to Introduce New Products The Jakarta Globe 13th Nov 2014
The Lippo Group kicked off a four-day event on Thursday to introduce and promote its products and innovations across a wide range of businesses, including recently launched cinema chain Cinemaxx and satellite television provider Big TV. The “Family Fun Fair 2014” event takes on a family-friendly theme at Lippo Mall Kemang Village in South Jakarta, and runs through Sunday.
Multipolar Kicks Off $200m Data Center Venture The Jakarta Globe 13th Nov 2014
Multipolar Technology, the information technology arm of the Lippo Group, plans to break ground on its first data center in West Java next month, marking a $200 million venture into the data center business. The move is part of the company’s effort to tap the growing demand for data storage in Indonesia, with the government urging Internet giants such as Google and Twitter and phone maker BlackBerry to set up their own data centers in Indonesia. Multipolar, through its subsidiary Graha Teknologi Nusantara, announced in July last year that it was building a data center with the capacity to house 8,000 server racks.
Infrastructure
Transport minister to involve private sector The Jakarta Post 15th Nov 2014
Transportation Minister Ignasius Jonan pledges to give more opportunities to the private sector to develop transportation infrastructure, saying that the government could use the assistance from businesses to realize the sea highway initiative. “We are currently in the process of revising a regulation on port operation permits, so that anyone will be able to develop and operate a port. As long as it does not involve the state budget, the private sector should be able to build a port because the state budget has its limits,” Jonan said in a discussion with the Indonesian Chamber of Commerce and Industry (Kadin) on Friday. Jonan said that under the sea highway initiative, the government was planning to increase the capacity of up to 24 seaports across the archipelago. “The government will focus on constructing ports that are not commercially viable for the private sector, to grow the economy of the country’s less developed areas,” Jonan said.
Indonesia Needs to Focus on Infrastructure to Secure Growth, Strategist Says The Jakarta Globe 13th Nov 2014
Indonesia needs to develop its infrastructure in order for the economy to grow further, and newly elected President Joko Widodo is on the right path with a focus on building ports across the nation, a global strategist says. “I’ve noticed a trend towards democracies that get frustrated with their past performance starting to elect leaders on more explicitly technocratic kinds of mandates, and that’s happened here, in the Philippines and India,” Dr. Parag Khanna said in an interview with the Jakarta Globe on Thursday.
Lion Group to Start Building Lebak Airport Next Year The Jakarta Globe 13th Nov 2014
Lion Group, the parent company of Lion Air, is embarking on the development of a huge new airport in Banten province, not far from Indonesia’s capital, the group’s CEO announced on Wednesday. “We’ve received the permit from the Transportation Ministry,” Lion Group CEO Rusdi Kirana said at the headquarters of aircraft manufacturer Airbus, in a suburb of the French city of Toulouse.
Jokowi launches maritime doctrine to the world The Jakarta Post 13th Nov 2014
Before world leaders attending the East Asia summit on Thursday, President Joko “Jokowi” Widodo announced the much-awaited vision of his signature maritime-axis doctrine that will define his administration for the next five years. Jokowi said the summit was essential for security, stability and economic prosperity in the region, and he chose the forum to express the ideas about Indonesia as a global maritime fulcrum.
Infrastructure projects suspended due to delays Jakarta Post 19th Nov 2014
Many infrastructure projects financed by the 2014 budget that were expected to be completed this year will be suspended or carried over to next year for numerous reasons, such as delays, land acquisition problems and a lack of City Council approval for major multi-year projects. Newly appointed Jakarta Public Works Agency head Agus Priyono said on Monday that the suspended projects had contributed to the slow spending of the budget. He revealed that the agency had spent only 8.75 percent of its Rp 6.29 trillion (US$519.2 million) budget. He said on Monday that his agency was facing difficulties in spending its budget because most of its big projects had faced land acquisition problems.
RI to benefit from G20 infrastructure hub Jakarta Post 18th Nov 2014
Indonesia has been advised to take advantage of the multi-year Global Infrastructure Initiative and Hub established after the latest G20 Summit, as leaders of the world’s largest economies committed to supporting infrastructure investment to spur global growth. Tackling global investment and infrastructure shortfalls was crucial to lifting growth, job creation and productivity, the G20 leaders said in a communiqué released after their meetings in Brisbane, Australia last week. This would be done through the establishment of the Global Infrastructure Initiative to facilitate long-term financing from institutional investors, as well as a Sydney-based hub that would provide the resources and expertise necessary to promote the multi-year agenda. G20 member countries will voluntarily support the hub, which will require US$10-15 million annually and will have a four-year mandate.
Jokowi: Indonesia Can Learn From China’s Infrastructure Development Jakarta Globe 18th Nov 2014
Indonesia can learn a lot from China when it comes to developing national infrastructure, President Joko Widodo says. “China has made a quantum leap,” Joko said on Tuesday, just days after returning from a series of foreign visits, including attending the Asia-Pacific Economic Cooperation (APEC) summit in Beijing. “It used to be a closed country but once it opened up it made a remarkable leap, the development is tremendous.” While in China Joko said he had visited Tianjin — one of the economic giant’s largest port cities — where he witnessed how “visionary” local government had set up long-term development. “They did not think [ahead] just for the the next 20 years, but they planned everything for the next 100 years,” Joko said. “They might have different styles — it is not a problem — all that matters is it’s done …” Joko said. China has experienced rapid growth since it started market reforms in 1978 and opened the country to foreign investment, lifting millions of people out of poverty in the process. GDP growth has been on average about 10 percent per annum for the past 34 years, according to the World Bank.
Jokowi Eyes Infrastructure Focus With Fuel Subsidy Cut Jakarta Globe 18th Nov 2014
Indonesia raised subsidized fuel prices by an average 33.6 percent as it seeks to shift subsidy spending to productive sectors. “The government decided to divert the subsidy spending,” President Joko Widodo said during a live television broadcast at the State Palace on Monday night. He added that his administration planned to allocate more money on infrastructure, education and health. Joko said the new price of subsidized fuel would be effective from 00:00 on Tuesday. The prices of the widely used low-octane gasoline, or Premium and subsidized diesel were increased by Rp 2,000 (16 cents) per liter. Indonesians will now pay Rp 8,500 per liter for Premium and Rp 7,500 per liter for subsidized diesel. Previously, Premium was sold at Rp 6,500 per liter and subsidized diesel at Rp 5,500 per liter. News reports previously stated that the government planned to increase subsidized fuel prices by Rp 3,000 per liter on average.
City asks S’pore to help develop infrastructure Jakarta Post 13th Nov 2014
The Jakarta administration has asked Singapore to help provide technical assistance for big infrastructure projects like low-cost apartments and liquid-waste management. Acting governor Basuki “Ahok” Tjahaja Purnama said after receiving a Singaporean business delegation accompanied by Singapore’s Ambassador to Indonesia, Anil Kumar Nayar, at City Hall on Wednesday that the city needed technical assistance from countries like Singapore, a city-state that is a development success story. “Singapore has advanced in many fields, including land reclamation. We can get much knowledge from them,” he said.
Legislation
After House truce, new row erupts over details The Jakarta Post 18th Nov 2014
After signing an agreement to end weeks of discord at the House of Representatives, politicians have started another row about how the pact should be carried out. The agreement, signed by leaders of the political factions within the ruling Great Indonesia Coalition and the opposition Red-and-White Coalition on Monday, consisted of five points that will result in revisions to the 2014 Legislative Institutions (MD3) Law that regulates distribution of power among the political factions in the House, as well partnership with the government.
Conflicting parties in parliament officially make peace Antara 17th Nov 2014
The Red-White Coalition and the Great Indonesia Coalition agreed to resolve their differences on Monday after inking an agreement at the parliament building. The agreement was signed by the representatives from the two conflicting parties: Hatta Rajasa and Idrus Marham from the Red-White Coalition and Parmono Anung and Olly Dondokambay from the Great Indonesia Coalition. "This agreement is signed to simplify our duty as lawmakers in the future. So now, there will be no coalition, we are all a family," Chairman of the House of Representatives (DPR) Setya Novanto remarked while opening the signing ceremony event on Monday.
Manufacturing
Google and Indonesian Phone Manufacturers Team Up for Android One Release Jakarta Globe 16th Nov 2014
Internet giant Google is in talks with several domestic smartphone manufacturers to bring Android One, its affordable smartphone to Indonesia, as part of its effort to boost mobile internet penetration among the country’s population. “We are talking with Google about the Android One phone, but so far, it’s still in the early planning stage,” said Djatmiko Wardoyo, corporate secretary at Erajaya Swasembada told the Jakarta Globe last week. “There’s no discussion about the launching period yet,” Djatmiko said. Google launched three Android One devices two months ago in India in partnership with smartphone companies in the country, namely Micromax, Karbonn and Spice, with starting price at around $100. Andrew McGlinchey, a Google product manager, said that it is Google’s basic strategy to work with more than one smartphone manufacturer in the Android One initiative in Indonesia to reach broader market segments and to provide customers with more options.
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