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National Affairs
Indonesia’s Graft Fight Strikes Fear Even Among the Honest The New York Times 12th Feb 2015
One is a telecommunications executive, another the former president-director of a state airline, and the third a project manager for Chevron. All three are serving prison sentences on corruption charges at a colonial-era penitentiary here, the latest trophies in Indonesia’s long struggle to dig itself out of the corrupt and authoritarian legacy of the Suharto dictatorship. But instead of winning praise for the country’s popular anticorruption campaign, the three cases have instead raised fears that it has run off the rails, with unchecked prosecutors going after innocent men to burnish their careers and judges going along to avoid being labeled soft on graft.
Indonesian Dual Citizenship Law Draft Included in Prolegnas Global Indonesian Voices 12th Feb 2015
The draft of a bill (RUU) regulating Indonesian citizenship status has been included in Prolegnas (National Legislation Program). This opens up the possibility of a dual citizenship policy, allowing Indonesians with overseas citizenship to gain citizenship recognition from home. The RUU, which is proposed by the Parliamentary (DPR) Commission III is a “Recognition towards the existence of Indonesian diaspora outside of the country and the dual citizenship system that has been adopted by many countries in the world.” This is according to a document received by GIVnews.com on Thursday (12/2).
Jokowi may delay decision on KPK-Police conflict The Jakarta Post 12th Feb 2015
President Joko “Jokowi” Widodo is likely to again delay his final decision on the conflict between the Corruption Eradication Commission (KPK) and the National Police (Polri), despite his promise last week to issue a comprehensive solution to the critical problem. As if to find another excuse to again postpone the decision on who should become the new Polri chief and how to meet mounting public pressure that he should save the KPK from concerted efforts by various parties to weaken the antigraft body, the President said he had abundant urgent problems that demanded his special attention. Jokowi made the statement in front of hundreds of Muslim intellectuals, clerics and representatives from various Islamic organizations while he was making a speech during the closing ceremony of the 6th Congress of Indonesian Muslims in Yogyakarta on Wednesday.
Market cheers capital injection approval The Jakarta Post 12th Feb 2015
The share prices of several state-controlled companies rallied on Wednesday after the House of Representatives approved the government’s proposal to give them additional capital to support future growth. Shares of state construction firms PT Waskita Karya (WSKT) and PT Adhi Karya (ADHI) rose 2.27 percent and 0.86 percent to Rp 1,800 and Rp 3,500, respectively after the legislators approved capital injections of Rp 3.5 trillion (US$272.7 million) and Rp 1.4 trillion, each. The share prices of state-run steel producer PT Krakatau Steel (KRAS) and Aneka Tambang (ANTM) also rallied with substantial gains of 3.2 percent and 3.38 percent to Rp 480 and Rp 1,070, respectively, as investors showed support for the capital injection plan.
Key bills in pipeline to jump-start economy The Jakarta Post 10th Feb 2015
In its plenary session on Monday, the House of Representatives agreed 37 bills set for deliberation this year, with more than half related to reform in the economy and less focus on bolstering the security and defense presence in society, as many had previously feared. An amendment to a law on dispute settlements in industrial relationships, which regulates disputes between workers, labor unions and employers, as well as amendments to the tax system and oil and gas management, are among the bills much-awaited by businesses.
Indonesia’s Widodo Ends 3-Nation Swing in Manila The Wall Street Journal 9th Feb 2015
Indonesian President Joko Widodo and Philippine President Benigno Aquino III meet Monday, with their discussions expected to include trade and drug trafficking as Indonesia prepares to execute seven foreign drug convicts including one from the Philippines. Mr. Widodo, who was elected last October, arrived late Sunday in Manila, where he will end a three-nation Southeast Asian swing that included Brunei and Malaysia. The Philippines Department of Foreign Affairs said the two countries will sign four agreements: memoranda of understanding on cooperation in combating narcotics; cooperation in technical vocational education and training; cooperation in education, research and training in defense studies; and a joint declaration on the protection of migrants and migrant workers.
Here’s What Indonesia’s ‘Drug Emergency’ Looks Like The Wall Street Journal 9th Feb 2015
Indonesia plans to execute several convicted drug traffickers this month, raising protests and calls for clemency. President Joko Widodo says he’s standing firm on the death penalty as a means of curbing drug abuse in the country. But how bad is drug use in this country of 250 million people? Indonesia is facing “a drug emergency,” Slamet Pribadi, spokesman for the National Narcotics Agency (BNN), told The Wall Street Journal recently. Last month Indonesia executed six convicted drug traffickers, including five foreigners. Dozens more are awaiting execution. Mr. Pribadi said the agency’s latest data shows that there are around 4.2 million drug users in Indonesia. In 2008, there were 3.1 million. Mr. Pribadi said that an estimated 1.1 million users are in need of rehabilitation.
Crisis averted as police call off raid on KPK The Jakarta Post 7th Feb 2015
The National Police refrained from taking action that could escalate tensions in their standoff with the Corruption Eradication Commission (KPK), as President Joko “Jokowi” Widodo is overseas on his five-day tour of ASEAN countries. Responding to reports that a group of police investigators had descended on the KPK headquarters in Kuningan, South Jakarta, on Friday afternoon to collect evidence for criminal cases involving a number of KPK commissioners, acting National Police chief Comr. Gen. Badrodin Haiti said the police had followed Jokowi’s instruction to refrain from inflammatory actions until his return on Tuesday of next week. “We must not do anything that could trigger unrest, such as arrests or raids,” Badrodin said.
Indonesia Revises 2015 Budget Assumptions, Ability to Meet Revenue Target Doubted Jakarta Globe 6th Feb 2015
Indonesia’s parliament agreed to revisions to 2015 budget assumptions to reflect sharply lower oil prices, but an analyst doubts the revenue from other sources can make up for a shortfall. A parliamentary committee on Friday approved a series of revisions in assumption for President Joko Widodo’s proposed 2015 budget, which is due to be voted on later this month. One key revision is the oil price will average $60 a barrel this year. In an initial budget for 2015 presented in September by Joko’s predecessor, the oil-price assumption was $105 a barrel. Also revised from September was the estimated growth rate for 2015, now 5.7 percent instead of 5.8 percent, and the projected average rupiah exchange rate, now 12,500 to the dollar instead of 11,900. The economy grew 5.02 percent in 2014, the statistics bureau reported on Thursday, and many economists doubt the economy can grow more than 5.5 percent this year.
Standoff puts brakes on KPK’s graft handling The Jakarta Post 6th Feb 2015
The Corruption Eradication Commission (KPK) on Thursday warned President Joko “Jokowi” Widodo that his indecisiveness in solving the current standoff between the antigraft body and the National Police had put it at risk. The KPK leadership is in threat of total paralysis as all of its commissioners are now facing criminal charges — in which one of them has been declared a suspect by the police — following the commission’s decision to name National Police chief hopeful Comr. Gen. Budi Gunawan a bribery suspect on Jan. 13. The police have named KPK commissioner Bambang Widjojanto a suspect for encouraging perjury when he was lawyer back in 2010, while the police are currently collecting evidence to charge three other commissioners — Abraham Samad, Adnan Pandu Praja and Zulkarnain — after receiving reports on their alleged past wrongdoings prior to serving as commissioners.
TNI ready to help maintain security over KPK-police dispute The Jakarta Post 6th Feb 2015
Indonesian Military (TNI) commander Gen. Moeldoko has said soldiers are ready to help maintain security in connection with the lengthy dispute between the Corruption Eradication Commission (KPK) and the National Police. "We haven’t received any specific instructions from the President but we are ready if we are needed to help maintain security," Moeldoko said on the sidelines of a soldier sporting event at the Army's Special Forces (Kopassus) command in Cijantung, East Jakarta, on Friday. He said it was not the authority of the TNI to meddle in any disputes related to politics. "We don't want to comment on the current legal and politic issues," he said as quoted by Antara news agency.
Malaysia, Indonesia agree to resolve long-standing issues ASEAN Investor 6th Feb 2015
The Malaysian and Indonesian governments have agreed to expedite some several key thrusts that have been initiated earlier, especially on long-unresolved issues. Prime Minister Datuk Seri Najib Razak said they include resolving maritime border issues, labour, education, and trade and investment, among other matters. Najib said although a technical taskforce to look into the maritime issues have held meetings for some 26 times, the matter had yet to show any significant results. He said both government had agreed to approach the issue by using two ‘tracks’ by appointing envoys that would hold negotiations at an exploratory level to find a formula that could be accepted by both governments. “If it shows a positive basis for the formula to resolve the issue of maritime borders, we can begin formal negotiations,” he said after holding a meeting with Indonesian President Joko Widodo at Perdana Putra, here, this morning.
Customs
HKTDC Opens Office In Jakarta, Indonesia Nasdaq 11th Feb 2015
Trade relations between Hong Kong and Indonesia have entered a new era with the official opening yesterday (10 Feb) of the Hong Kong Trade Development Council's office in the Indonesian capital, Jakarta. Since 2010, the HKTDC has operated a consultant office in Jakarta. The upgraded facility will be responsible for Hong Kong trade promotion with Indonesia and neighbouring Southeast Asian economies.
Govt' to Form Port Efficiency Task Force Tempo 10th Feb 2015
The government plans to form a task force to improve efficiency in the sea port sector due to high logistic cost that has been hampering economic growth. "Our logistic cost is every expensive, around 20 percent from the GDP," said Coordinating Minister for Economic Affairs Sofyan Djalil on Tuesday, February 10, 2015. He said the most significant component of logistic costs is transportation cost. Inadequate infrastructure, long dwelling time and customs process have also caused problems. The task force will be temporarily coordinated by Minister Sofyan under direct supervision from Vice President.
Defense & Security
The dilemma of Indonesia’s coast guard Jakarta Post 11th Feb 2015
Law No. 32/2014 on maritime affairs was deliberated in the House of Representatives for more than two years and was passed days before the end of the 2009-2014 term. It is the “umbrella law” of the maritime realm. A problem arises in chapter 58, which stipulates the establishment of the Maritime Security Board (Bakamla). Earlier, President Joko “Jokowi” Widodo set up the body by issuing Presidential Regulation No. 178/2014 and officially introduced it in a Hari Nusantara (Archipelago Day) ceremony on Dec. 13, 2014. However, a presidential regulation is not the proper basis for the purpose. Instead, the government should issue a Government Regulation (PP). Sources said a PP is being prepared by the Office of the Coordinating Political, Legal and Security Affairs Minister. Bakamla will carry out coast guard tasks like law enforcement at sea, maritime search and rescue operations and others.
All 21 F-16C/D for Indonesia will be Delivered in 2015 Defense Studies 6th Feb 2015
With the F-35 Joint Strike Fighter’s pending arrival, there soon won’t be much use for the F-16 at Hill Air Force Base, but that doesn't mean other countries don’t want them. The U.S. Air Force just signed a $94 million contract with Sumaria Systems Inc., based in Danvers, Mass., to support foreign sales of some of their F-16s. The work under the new contract will be performed at Hill and Wright-Patterson Air Force Base in Dayton, Ohio...In July, the base’s Ogden Air Logistics Center delivered three of what will eventually be 24 F-16 Fighting Falcon aircraft to the government of Indonesia. The delivery constituted the beginning of a nearly $700 million aircraft acquisition and refurbishment deal between Indonesia and the U.S. where Hill maintenance workers are upgrading the avionics and overhauling the wings, landing gear and other components on each aircraft.
Palace: Talks needed on Indonesia’s defense trade offer The Philippine Star 11th Feb 2015
Further talks are needed with regard to Indonesia’s offer of defense equipment, Malacañang said yesterday. “Further discussions will be pursued... to identify and flesh out possible areas of cooperation,” Presidential Communications Operations Office Secretary Herminio Coloma Jr. said on the offer made during the visit of Indonesian President Joko Widodo. In a statement after meeting with Aquino, Widodo said he was happy to have discussed political, legal and security issues, including the “potential that we would like to offer on the trade of defense equipment.” Coloma said Widodo also welcomed the joint declaration signed by the two countries to improve cooperation to combat drug trafficking.
Here's How Malaysia and Indonesia Plan to Resolve Their Territorial Disputes The Diplomat 10th Feb 2015
Late last week, Malaysian and Indonesian sources reported that the two countries would appoint special envoys to begin holding “exploratory” negotiations over still-outstanding territorial disputes. The decision to appoint the special envoys came at the conclusion of a meeting between Malaysian Prime Minister Najib Razak and Indonesian President Joko Widodo in Putrajaya, Malaysia last week during a three-day bilateral summit. Although the appointment of special envoys sends a positive signal about the intents of the two governments to address the dispute, there was little public discussion of how the leaders plan on arriving at any agreement. Indonesia and Malaysia maintain competing claims over the Ambalat sea block and their maritime border in the Celebes sea off the eastern coast of Borneo.
Economics
S. Korean companies plan to invest US$17 billion in Indonesia The Jakarta Post 12th Feb 2015
As many as 16 South Korean companies have expressed a serious commitment to spend up to US$17.1 billion in a wide array of sectors from power generation to minerals processing in Indonesia, the Investment Coordinating Board (BKPM) said. About US$8.5 billion of the planned investments, which were registered at the BKPM between October last year and January this year, come from five firms, which would use the funds to manufacture import-substitution products, according to data. One firm is investing US$2.7 billion to build a mineral proccessing facility. Other investment plans will involve power generation, labor-intensive industries, agro-commodity processing, maritime and infrastructure, all of which are priority sectors envisioned by the investment body.
Seven percent growth viable over long term, say experts The Jakarta Post 12th Feb 2015
While the new administration’s target of posting 7 percent growth by 2019 is deemed feasible, experts warn it must be cautious and treat the process more as a long-distance run than a sprint. According to IMF senior resident representative for Indonesia Benedict Bingham, there has been a shift in Indonesia’s stance on economic growth since the new administration took office. “The focus was previously on growth supported by commodities. Now, there’s renewed focus on competitiveness. That’s why you see this agenda, a big focus on infrastructure and on creating fiscal space for infrastructure,” Bingham said on Wednesday during The Economist’s “Indonesia Summit 2015: New Light of False Dawn?”
Analysis: Indonesia’s consumer sector overview The Jakarta Post 11th Feb 2015
The consumer sector is predicted to grow moderately in 2015. From the demand side, consumers’ purchasing power has eroded as the government increased the subsidized fuel price in November 2014 and it is estimated to normalize after three to six months and get stronger as the government decreased the subsidized fuel price in the early and mid-January 2015. Private consumption accounted for an average of 56 percent of Indonesia’s total output over the past five years.
IMF, World Bank Economists See BI Standing Ground on Benchmark Rate The Jakarta Globe 11th Feb 2015
Indonesia’s central bank Bank Indonesia (BI) is likely to maintain a tight-bias policy this year despite an easing in inflation amid a global economic slowdown. But external risks such as an imminent policy rate hike by the US Federal Reserve later this year will still keep BI on edge for the time being, said Benedict Bingham, the International Monetary Fund’s representative in Indonesia. BI will hold its monthly governors’ meeting on the policy rate next Tuesday, with economists from Bank Mandiri, Indonesia’s largest lender, and Singapore-based DBS expecting the central bank’s benchmark rate to stand pat at 7.75 percent.
Indonesia Gets Mixed Grade on Millennium Development Goals The Wall Street Journal 11th Feb 2015
Indonesia has met many of its Millennium Development Goals in the nearly 15 years since they were adopted by United Nations members, but efforts have been uneven, a new report says. “Indonesia has made great progress across a range of poverty indicators and experienced significant political, economic and social change,” says Inside Indonesia, a nonprofit publication based in Melbourne, in a report released this week. But “Indonesia should not be complacent in its success” given that problems of inequality and high vulnerability of the poor and the persistence of poverty “mean that the challenge is far from over for Indonesia,” authors write. The MDGs are a collection of eight poverty-reduction targets agreed to by all 189 UN member nations in 2000, with a deadline of 2015. They range from halving extreme poverty to ensuring universal primary education and reducing child mortality.
Philippines, Indonesia to expand trade and investment ties ASEAN Investor 10th Feb 2015
Maximizing on their countries rising economic importance, the Philippines and Indonesia on Monday vowed to further enhance their trade and investment ties. In his speech after meeting with Indonesian President Joko Widodo, Philippine President Benigno Aquino III said they discussed ways on how to increase trading between the two countries. ”The opportunities are certainly there, especially given that Indonesia and the Philippines are two of the fastest growing economies in the region,” he said. Widodo, in his speech, said he is grateful of his countryâs trade partnership with the Philippines. ” with respect to the economic field and cooperation, I would like to increase our trade volume, to double the trade volume by 2016″, he said. And also I wish to invite investors in the Philippines to Indonesia in the maritime sector and fisheries sector,â he added.
Bank Indonesia Report Anticipates Local Retail Sales Back on the Rebound Jakarta Globe 9th Feb 2015
Retail sales should have returned to double digit growth pace in January after a drop in the price of low-grade gasoline following the removal of subsidies at the start of the year. According to a Monday survey from the country’s central bank, Bank Indonesia, retail sales were expected to have risen 13 percent last month, compared to a 4.6 percent increase in December. Retail sales data are usually only released two months after the month being reported on. November saw retail sales grow 11 percent, a figure revised from 14 percent in BI’s previous report. The central bank’s survey of 650 retailers in 10 major cities showed that retailers expected an increase in sales of telecommunication equipment last month. Still, retailers anticipate sales slowing in the next three months, noting that demand in general may likely slow in Southeast Asia’s biggest.
Small-Timer Stimulus Is No Short-Term Plan: Minister The Jakarta Globe 9th Feb 2015
The minister for cooperatives and small and medium enterprises, Anak Agung Gede Ngurah Puspayoga, says the government wants to spur the growth of SMEs by streamlining the process for small businesses to get a permit and improving their access to funding. “The permits for micro and small enterprises will now be issued by a single office, the subdistrict office, so there’s no more long processing time,” Puspayoga said at a meeting with batik makers and entrepreneurs in Solo, Central Java, over the weekend. Subdistrict offices will issue single-page certificates for small businesses, and applicants will also get a card from state-controlled lender Bank Rakyat Indonesia for future access to loans. “The entire permit application process is meant to be free of charge,” the minister added.
Indonesia's BKPM Simplifies Monitoring for Investors Nasdaq 9th Feb 2015
Capital Investment Coordinating Board (BKPM) Chairman Franky Sibarani has stated that his board will provide online monitoring facilities to investors to assist them in checking the progress of their investment permit applications. Investors can monitor the progress of their investment permit applications and compare it with the deadline as arranged in the Standard Operating Procedure (SOP), he stated. "BKPM tries to facilitate the investors through fast, simple, transparent, and integrated issuance of investment licenses," the BKPM chief said here on Monday. Franky made the statement during the signing of a memorandum of understanding (MoU) on the information security system to support the BKPM and its central and regional integrated one-roof service system (PTSP).
Permits for new small, medium enterprises free: minister ANTARA 7th Feb 2015
The government is providing free services to those who wish to procure permits for new small and medium enterprises. "The permit letter is required to be written on a piece of paper only. It will be processed by state-owned Bank Rakyat Indonesia," Minister of Cooperatives and Small and Medium Enterprises (SMEs) Anak Agung Gede Ngurah Puspayoga explained. Many SMEs in Indonesia still find it difficult to obtain business permits, which are important requirements to get loans from a bank.
Consumer Confidence Stays High Despite Fuel Price Increase The Wall Street Journal 6th Feb 2015
A significant increase in the price of fuel reduced consumer confidence in Indonesia in the fourth quarter of 2014, but consumers in Southeast Asia’s largest economy remain among the world’s most confident, research firm Nielsen said in its latest report. Indonesia tied the Philippines for the No. 2 spot, according to the index, which measures perceptions of local job prospects, personal finances and immediate spending intentions. Both countries scored 120 against a global average of 96. The Philippines’ score rose five points from 115 in the previous quarter’s survey while Indonesia went the other way with a five-point fall from its third-quarter score. India remained the most optimistic consumer market at 129, up three points. Agus Nurudin, Nielsen Indonesia’s managing director, said the decrease in consumer confidence in Indonesia owes largely to an increase in the price of fuel.
Energy
Nickel Producer Central Omega Ramps Up Smelter Investment The Jakarta Globe 12th Feb 2015
Listed Indonesian nickel producer Central Omega Resources is ramping up its investment plan by 33 percent to build a smelter in Morowali, Central Sulawesi. Kiki Hamidjaja, the president director at Central Omega, said on Wednesday that the higher investment would be to fund construction of a coking coal plant to support its smelter and to plug the soaring costs due to the rupiah’s depreciation against the dollar. Central Omega, through its subsidiary COR Industri Indonesia, has appointed China Machinery Import & Export Corporation (CMC) and China Machinery Industry Construction Group as the contractor for the engineering, procurement and construction (EPC) work on the smelter, which is set to have a processing capacity of 300,000 metric tons of nickel pig iron per year.
Indonesian Tin Producers Eye Export Stoppage to Support Prices The Jakarta Globe 12th Feb 2015
Provincial government and smelter officials in Indonesia’s main tin producing region are set to meet within the next two weeks to discuss a possible export moratorium in a bid to support global prices, officials in the top exporter said. As benchmark London Metal Exchange (LME) tin prices trade at two-and-a-half-year lows, the Governor of Bangka-Belitung Rustam Effendi is spearheading talks on whether to halt exports, Agung Nugroho, Corporate Secretary at the country’s biggest tin miner Timah said.
Oil, gas projects worth Rp10.8t in pipeline The Jakarta Post 12th Feb 2015
The Energy and Mineral Resources Ministry has proposed that a number of oil and gas infrastructure projects be developed within the next few years and be funded by the state budget to build a better distribution system. The ministry has obtained an agreement in principal from the House of Representatives’ Commission VII overseeing the energy sector for the plan, which will see seven projects worth a total of Rp10.8 trillion (US$839.04 million) being developed. The government will directly appoint state-owned enterprises to work on several projects.
Govt seeking smelter site in Papua for Freeport The Jakarta Post 12th Feb 2015
Papua Governor Lukas Enembe and a team from the Energy and Mineral Resources Ministry and other relevant ministries will conduct a survey of potential locations for the construction of miner PT. Freeport Indonesia’s smelter in Papua. The Governor stressed it was in Papua's interest to have the smelter constructed in the province, as it would generate more job opportunities and would boost the economy in the province, including tax revenue for the government.
Govt to ease permits for oil & gas sector The Jakarta Post 11th Feb 2015
The Energy and Mineral Resources Ministry will streamline the licensing procedures for oil and gas businesses after earlier introducing a simpler process for electricity-related investment through the Investment Coordinating Board’s (BKPM) newly launched one-stop services. The Energy and Mineral Resources Ministry’s acting chief for oil and gas I Gusti Nyoman Wiratmadja said the ministry was considering simplifying the issuance of 10 types of business permits.
Alstom to Build 61m-Euro Geothermal Plant in Indonesia Jakarta Globe 11th Feb 2015
Alstom will build a geothermal power plant in Indonesia under a 61 million euro ($69 million) deal with a subsidiary of Pertamina, the French industrial giant said on Wednesday. The turnkey plant, to generate 30 megawatts, will be set up in Karaha, western Java. Alstom will provide engineering, materials and construction in the project to be completed by the end of next year for Pertamina Geothermal Energy, Alstom said in a statement. Indonesia, made up of thousands of islands stretching from the Indian to Pacific Oceans, is home to some 130 volcanoes and is estimated to hold around 40 percent of the world’s geothermal potential.
Indonesia sees Newmont concentrate output up 25 pct in 2015 Reuters 10th Feb 2015
Indonesia expects U.S. miner Newmont Mining Corp to produce 25 percent more copper and gold concentrate in 2015 after a nine-month export stoppage hit Newmont's production in 2014. "Newmont is expected to produce 500,000 tonnes of copper and gold concentrate in 2015 "at most", up from 400,000 tonnes in 2014," Coal and Minerals Director General Sukhyar said.
Indonesia's Inalum faces production cut as power diverted to grid Reuters 10th Feb 2015
Indonesia's state-owned aluminium producer PT Inalum will cut production to 202,000 tonnes in 2015 from a capacity of 250,000 tonnes, an official with direct knowledge of the matter said, as some of the firm's power is to be diverted to meet public needs. "Around 210 megawatts of our power will be given to PLN from April this year," the official, who declined to be named because of the sensitivity of the matter, told Reuters. PLN is Indonesia's state-owned electricity utility, Perusahaan Listrik Negara.
Antam Launches $490m Plant The Jakarta Globe 10th Feb 2015
State-controlled miner Aneka Tambang has started the commercial operations of its $490 million chemical-grade alumina plant in Tayan, West Kalimantan, the miner said in a statement on Monday. The plant, which is set to produce around 300,000 tons of chemical-grade alumina (CGA) per year, is part of the company’s diversification and strategic initiative to boost yields amid the government’s ban on mineral exports. Antam president director Tato Miraza said the commercial operations of the CGA plant would increase the variety of the miner’s processed commodities, which include nickel, gold, silver and coal.
Solar power projects up in the air The Jakarta Post 10th Feb 2015
Eighty solar-power plant construction projects, some up for tender, are currently in limbo as the government has halted the process pending a Supreme Court ruling, following a lawsuit from a business group. Energy and Mineral Resources Ministry renewable energy director general Rida Mulyana said the lawsuit was still at the Supreme Court. “Of the 80 power-plant projects, 12 are already at tender and are awaiting the PPA [power purchase agreement] process. The tender process for the remaining projects must wait for the ruling,” Rida said.
Govt to offer 12 new oil blocks The Jakarta Post 10th Feb 2015
The Energy and Mineral Resources Ministry is planning to open bidding for new oil and gas blocks this year in the face of falling oil price and ongoing uncertainty about the regulator’s status. Upstream director at the ministry’s oil and gas directorate general, Naryanto Wagimin, said as many as 12 oil and gas blocks would be up for offer this year. An official announcement will probably be made this May during an annual event of the Indonesian Petroleum Association.
Proposed Plan to Boost Biofuel Subsidy Angers Local Environmentalists The Jakarta Globe 9th Feb 2015
Indonesian environmentalists have protested the government’s plan to use a portion of funds from fuel subsidy cuts to drive the growth of the biofuel industry, saying it will only exacerbate Indonesia’s already alarming deforestation rate. Energy and Mineral Resources Minister Sudirman Said told a hearing with legislators in Jakarta last week that the government planned to shift some of the funds saved from fossil fuel subsidies to finance biofuel subsidies instead, in order to support the growth of the industry. “In the future, [fossil] fuel subsidies will be gradually reduced and the budget will be allocated for more productive sectors, such as biofuel and bioethanol industries,” Sudirman said. The Energy and Mineral Resources Ministry has proposed a more than sixfold increase in biofuel subsidies in this year’s state budget revision, from an initial figure of Rp 3.09 trillion to Rp 19.4 trillion ($244 million to $1.53 billion).
Biofuel makers demand new pricing scheme The Jakarta Post 9th Feb 2015
Biofuel producers want a new pricing scheme that will make production less costly so as to meet an expected increase in demand as the government aims to boost biodiesel use to reduce dependence on fossil fuels. The Biofuel Producers Association (Aprobi) has proposed that the benchmark price, which is used in sales tenders with major biofuel consumer PT Pertamina, be based on palm oil prices instead of crude oil prices. “We expect the new index price to be approved by the government. If it is so and can be applied in all biodiesel purchase contracts in 2015 as well as existing contracts, we can see a significantly higher domestic consumption this year,” Aprobi secretary general Togar Sitanggang told a press briefing recently.
GE Oil & Gas remains upbeat on Indonesia The Jakarta Post 6th Feb 2015
Global leading equipment and services provider GE Oil & Gas has said that Indonesia, Southeast Asia’s largest economy, still has great potential for development in the oil and gas business sector. Despite declining world oil prices, Indonesia’s oil and gas resources remain attractive for investors, according to GE Oil & Gas president and chief executive officer Lorenzo Simonelli. “Indonesia has great resources and opportunity to push through. The new government is already taking action on looking at projects and moving forward the projects, such as IDD, Tangguh and Jangkrik. We are active on all of these projects,” Simonelli said in a recent interview.
Indonesia to Set Price Band for Domestic Fuel Prices – Official Jakarta Globe 6th Feb 2015
Indonesia plans to set a floor and ceiling on fuel prices in a bid to reduce volatility and generate savings, an energy official said, just over a month after Southeast Asia’s largest economy axed fuel subsidies. Last month President Joko Widodo freed up $20 billion of dollars of state spending in 2015 by scrapping fuel subsidies and adopting a managed float, whereby retail petrol prices are set based on the average crude prices over the preveious two weeks. “If crude prices go down we will set a floor price so we will have savings. We will do the same if prices go too high, we will also set a ceiling price,” Wiratmadja Puja, acting director general of oil and gas, told reporters on Friday. The government had carried out a study on what levels the floor and ceiling would be set at but was not ready to release the details yet, Wiratmadja said. “If crude prices reach Rp 12,000 ($1) per litre or Rp 15,000 per litre, it’s not good for people,” he said, adding the government planned to discuss the issue of subsidies again with parliament.
Palm Oil Update Indonesia: Subsidies for Biofuel to Lift CPO Prices Indonesia Investments 6th Feb 2015
Due to the Indonesian government’s plan to increase biofuel subsidies from IDR 1,500 per liter to IDR 4,000 per liter - in a move to protect the domestic biofuel industry - palm oil futures climbed the most in 28 months. Amid the world’s current low crude palm oil (CPO) prices, Indonesian biofuel producers have it rough as production costs exceed market prices and therefore requested the government to raise biofuel subsidies to offset losses. If approved by Indonesian authorities then this move should result in higher palm oil demand. Although having been approved by the Indonesian parliament’s energy commission, the government’s proposal to raise biofuel subsidies to IDR 4,000 (USD $0.32) per liter still requires approval from the parliament’s budget committee. Currently, there are 11 Indonesian palm oil companies that produce a total of 5.2 million tons of palm oil-derived biodiesel (which these companies supply to state-owned energy company Pertamina for further distribution). As two or three more Indonesian companies are expected to commence biofuel production in 2015, total production may hit 7 million tons this year. However, as CPO prices have lost about a quarter in value from their peak in March 2014, these companies may be forced to temporarily stop biofuel deliveries to Pertamina as the business has become unprofitable.
Financial Services
Bank Mandiri to Seek $800m Funding This Year The Jakarta Globe 12th Feb 2015
Indonesia’s largest bank by assets, Bank Mandiri, is planning to seek about $800 million wholesale funding this year after parliament rejected a government capital injection proposal, its chief finance officer said on Thursday. The funding plan has been included in Bank Mandiri’s 2015 budget, chief finance officer Pahala Mansury said. The bank may issue bonds or tap the capital market. “We are still reviewing whether we need funds from the capital market and in what form,” Mansury said. The House of Representatives’ budget commission rejected the government’s plan to inject Rp 5.6 trillion ($436.65 million) in capital into the state-controlled lender.
Indonesia in Need of Accounting and Finance Professionals CFO Innovation 12th Feb 2015
Due to a tightening of regulation, there is a high demand for accounting and finance candidates in Indonesia, especially those skilled in financial control, risk and compliance, according to Robert Walters' latest annual Global Salary Survey 2015. Companies in Indonesia looking to attract key bilingual candidates will have to meet salary expectations, offer quality training programmes and opportunities for international exposure. The country saw significant growth particularly in sectors such as professional services, FMCG, IT, technology and manufacturing. This was largely attributed to the active spending habits of Indonesian's burgeoning middle class, which led to a corresponding increase in consumption levels. Figures from the survey suggested that candidates who switched jobs in 2014 expected salary increments of 25-35%. This trend is likely to continue in 2015.
2015, year of sharia capital market: OJK The Jakarta Post 11th Feb 2015
The Financial Services Authority (OJK) launched on Tuesday a nationwide campaign to encourage the development of Indonesia’s still shallow sharia-compliant capital market with new initiatives and regulations. A roadmap, new and revised regulations as well as incentives and campaigns to raise awareness are in the pipeline for the sharia capital market. The regulator declared the year 2015 as “the year of sharia capital market” in the world’s largest Muslim country. However, shares of Islamic finance remain low, especially when compared with neighbor Malaysia.
Indonesia's biggest lender hopes for better times in 2015 Nikkei Asian Review 11th Feb 2015
State-owned Bank Mandiri, Indonesia's largest lender by assets, remains cautious about national economic recovery after suffering a major slowdown in profit growth last year. Mandiri on Wednesday said net profit growth for 2014 was 9% year on year at 19.9 trillion rupiah ($1.56 billion) -- barely more than half the 17% achieved in 2013 - after the bank was forced to cut back on lending amid high interest rates and a sluggish economy. At a press conference, President Budi Sadikin characterized 2014 as "a tough year." Loans grew 12% to 530 trillion rupiah, a major slowdown from the 22% rise in 2013. Corporate loans, which account for about 27% of the total, were worst affected and grew only 3%.
Bank Mandiri Sets Aside $180m for IT Spending in 2015 Jakarta Globe 11th Feb 2015
Bank Mandiri, Indonesia’s largest lender by asset, said on Tuesday that it set aside $180 million in capital expenditure this year in order to expand its information technology network. Mandiri plans to add 2,000 automatic teller machines and 50,000 electronic data capture devices — which are used to read debit or credit card payments — across the country this year, according to Rico Rico Usthavia Frans, Mandiri’s senior executive vice president for transaction banking. The company also plans to start this year a smartphone-based app for topping-up — or adding credit — to its electronic money cards, which are used as an electronic pass for bus, parking or toll payments.
Banks Calls for Tax Office to Rescind Transparency Rule on Tax Info Jakarta Globe 11th Feb 2015
Banks are calling for the tax directorate general to rescind its newest regulation which, from April, will require lenders to start reporting customers’ tax identification number, address and tax deductions. Lenders are concerned that by complying with the rule they may breach bank secrecy law, which in turn would drive away funds from the country’s banking system. “I have asked our customers about this and they are quite scared,” Budi Gunawan Sadikin, president director of state-controlled Bank Mandiri, said on Wednesday. While the tax office does not ask for customer’s account balances, tax officials can guess the amount using tax deduction information, said Jahja Setiaatmadja, president director of Bank Central Asia on Tuesday.
The Taxman Cometh: New Rule Puts Kibosh on Banking Secrecy The Jakarta Globe 10th Feb 2015
The tax office quietly issued a new regulation last week to link taxpayers’ tax identification number with their time deposits balance, bypassing Indonesia’s formidable banking secrecy, as it attempts to meet an ambitious tax revenue target this year. The Finance Ministry’s tax office has been trying to gain access to Indonesian banks’ information for years in order to canvas new wealthy taxpayers or find clues that individuals under-reported their taxes. Banks have previously thwarted these efforts, citing Indonesia’s traditional banking secrecy rules. Starting in April, the tax directorate general will require lenders to list deductions for each customer, along with their name, address and tax identification number. Banks presently deduct taxes on interest paid for customers’ time deposits on behalf of the tax office; lenders then report to the tax office the total amount they deducted on taxed interest, for all customers combined. Since banks’ deposit interest rates are publicly available, the tax office will now be able to easily deduce how much a taxpayer has in their bank account, based on lenders’ reported deductions for taxed interest tax, and thereby verify their tax reports.
Social Security Drives Increase in Premiums Jakarta Globe 9th Feb 2015
Insurance premiums in Indonesia grew significantly last year, helped by the government’s social security initiatives that boosted the number of insurance policy holders in the country. Insurance companies operating in the country booked a combined Rp 270.72 trillion ($21.48 billion) in income from premiums in 2014, according to the Financial Services Authority (OJK), an increase of 47.1 percent from the year before. Premiums under the social insurance category saw a nearly sevenfold increase to Rp 69.33 trillion from Rp 10.35 trillion. “Compared to 2013, [the insurance industry in] 2014 grew pretty good,” said Firdaus Djaelani, a commissioner at the OJK overseeing non-banking financial institutions.
Banking bill a priority for House this year The Jakarta Post 9th Feb 2015
Indonesia may proceed in limiting foreign ownership in local banks, the House of Representatives having prioritized the banking bill to be passed this year in a move that will tighten the world’s most profitable banking industry. Foreign ownership in domestic commercial banks will be capped at 40 percent and existing offshore investors will have 10 years to divest their shares after the bill is passed into law, according to the most recent banking bill draft obtained by The Jakarta Post. The previous draft formulated by the House of Representatives in the 2009-2014 term initially set the transition period at five years. Foreign banks operating under branch status in Indonesia — including Citibank, Deutsche Bank, HSBC Bank, JPMorgan Chase and Standard Chartered — must also become legal entities (PT) within the 10-year transition period, the draft bill reads.
Indonesian Firms Likely More Prepared Against Forex Losses in 2015: Moody’s Jakarta Globe 8th Feb 2015
Indonesian companies are likely to be more prepared for foreign-exchange risks this year despite modest growth and a depreciated rupiah, an analyst at international ratings agency Moody’s Investor Service said. Brian Grieser, vice president and senior analyst of corporate finance at Moody’s Investor Services, said that the ratings agency’s outlook for Indonesian firms is still stable, noting that the weak rupiah has now become relatively manageable for most. “There are couple of exposed firms, but even among the few, they have cash houses or hedges or some revenues in US dollars,” Grieser said during a media briefing in Jakarta on Friday. He added that these risk management efforts should give the companies more of a buffer for the year. The rupiah has been on a downward trend against the dollar as the United States’ economy continues to recover.
RI asks Malaysia to ease entry of indonesian banks Antara News 7th Feb 2015
Indonesia has asked the Malaysian government to facilitate the entry of its banks into the country to help expand their business. "President Joko Widodo discussed the banking problem with Malaysian Prime Minister Mohammad Najib Razak during their meeting," Indonesian Chief Economic Minister Sofjan Djalil said on Saturday. Sofyan said the President had made his Malaysian counterpart aware of the complaints received from the Indonesian banks and Financial Service Authority (OJK). "For example, Malaysias Maybank can open a branch office in Indonesia, but Indonesian banks face difficulty when they wish to open their branches in Malaysia," the Minister stated.
BNI vying for more from int’l business The Jakarta Post 6th Feb 2015
State-owned lender Bank Negara Indonesia (BNI) is developing its international banking division via services to help grow its fee-based income. The bank posted Rp 10.7 trillion (US$847.04 million) in fee-based income last year, an increase of 13.5 percent from Rp 9.4 trillion in 2013, according to its financial report. BNI, the owner of several branches and offices overseas, was preparing its New York branch to join local foreign exchange (forex) clearing members under the US Federal Reserve’s operation, which would reduce the time required in the process, its executive said.
Indonesia World Leader in the Use of Mobile Banking Apps: Report Jakarta Globe 6th Feb 2015
Indonesia is a leader in the use of mobile banking applications among more than 20 countries surveyed by global consulting firm Bain & Company. According to a report by the Boston-based company, titled “Customer Loyalty In Retail Banking: Global Edition 2014″, 77 percent of respondents from Indonesia use mobile banking applications, beating not only Asian rivals like China, Thailand, India, Singapore, Malaysia and Hong Kong, but also developed countries like the US, the UK, Germany and Japan. “Mobile applications have arrived at the stage of mass appeal. Almost every country showed a huge increase in the share of respondents using mobil apps …Indonesia and China led in usage,” the report said.
Food & Agriculture
Jakarta Food Security Summit kicks off The Jakarta Post 12th Feb 2015
President Joko “Jokowi” Widodo and First Lady Iriana officially opened the Jakarta Food Security Summit (JFSS) at the Jakarta Convention Center in South Jakarta on Thursday. The event aims to discuss the pressing issue of food sustainability. Head of the Indonesian Chamber of Commerce and Industry (Kadin)’s food committee, Franciscus Welirang, said that the summit would be held once every two years and that it would guide the efforts of companies in that field, nationally and internationally. He added that the increase in the global population from 7 billion people to 9 billion by 2045 was a factor generating more awareness regarding the importance of boosting food production and sustainability.
Japanese pioneer develops 'unagi' empire in Indonesia Nikkei 9th Feb 2015
This small fishing town on Java's southwest coast is best known for the legendary sea queen Nyi Roro Kidul, a spurned princess turned mermaid who is said to snatch whatever man takes her fancy from the kilometers of beach that form the town's frontier with the Indian Ocean. But the predatory queen is not the only marine enigma swimming through the turbulent undertow off the rain-swept coast. For Japanese entrepreneur Hisayasu Ishitani, a chain smoking 72-year-old now in his fifth decade in Indonesia, the local waters mean a plentiful supply of eel -- and the opportunity to fill a growing market gap in his homeland.
Rice output to decline, surplus will remain Jakarta Post 6th Feb 2015
Despite the government’s massive efforts to boost productivity, rice production is expected to decline this year because of a forecast long dry season. The country’s unhusked rice output would dip by 0.95 percent to 71.28 million tons this year, from 70.6 million tons in 2014, according to the Agriculture Ministry’s director general for food crops, Hasil Sembiring. “We will have a long dry season this year, which will result in lower output, in contrast to a wetter season that contributes to higher output,” he said on the sidelines of a hearing at the House of Representatives.
Health & Life Sciences
All Puskesmas to be able to detect cancer The Jakarta Post 10th Feb 2015
The Health Ministry is planning to provide early detection facilities for cervical and breast cancers in every community health center (Puskesmas) by 2019. Currently, only 10 percent of 9,671 health centers in the country can provide the service. As of 2014, the country only had 430 trainers and 2,202 doctors or nurses capable of conducting the early detection.
Opportunities Abound in Indonesia's Pharmaceutical Landscape Global Business Reports 9th Feb 2015
Indonesia may be classified as a lower-middle income country, but it offers vast potential in terms of commercial opportunity, particularly in pharmaceuticals. From 2007 to 2013, Indonesia’s pharmaceutical industry grew by 85 percent so that by 2014, it was valued at $6.5 billion and enjoyed a 12.5 percent annual growth rate, a trend that is expected to persist through 2018. As Indonesia’s market for pharmaceuticals expands and deepens, domestic and multinational players are positioning themselves to capitalize on emerging opportunities.
Prosperity rests on stronger efforts to reduce malnutrition The Jakarta Post 9th Feb 2015
Today in Indonesia, almost 9 million children under the age of five are too short for their age, a condition known as stunting. Many of these children will not do well at school because the same nutrients that are needed for growth are also needed for healthy brain development. The 2014 Global Nutrition Report places Indonesia among 31 countries in the world that are unlikely to meet global targets for reducing malnutrition by 2025. Government data indicates that 37 percent of children under five were stunted in 2013, 12 percent were wasted (too thin for their height) and 12 percent were overweight.
Halal Certification a Bitter Pill for Pharma Jakarta Globe 6th Feb 2015
Four months have passed since a law requiring all food and pharmaceutical products distributed in Indonesia to have halal certification was passed, but resistance to the new legislation remains strong. The passage of the law went largely unnoticed in the dying days of the Susilo Bambang Yudhoyono presidency, as the nation was fixated on the cabinet line-up of the incoming president, Joko Widodo. That allowed the House of Representatives to easily push through the legislation that had been held up for eight years because of a raft of contentious provisions — most of which made it into the final version of the law.
ICT
Cinema Owners Group Opposes Proposal to Limit Foreign Movies The Jakarta Globe 12th Feb 2015
A cinema owners association opposes a proposal by a business industry group to limit the number of foreign movies being shown in Indonesia in order to protect the local industry. The national film industry would be in danger if foreign movies continue to be shown in Indonesia, said Rudy Sanyoto, the head of video, film, and photography committee of the Indonesian Chamber of Commerce and Industry (Kadin). Imposing such a limit would not help improve the growth of the national film industry, said Djonny Syafruddin, the head of the All-Indonesia Cinema Owners Association (GPBSI), on Wednesday. It would instead reduce the number of moviegoers, unless Indonesia’s film industry improved, he added. Djonny said that in 2011 there was no significant change in the number of moviegoers, despite the absence of foreign movies for six months. The number of moviegoers dropped to 14 million in 2011 from 16 million in 2010.
RI’s major tower companies continue expansion programs The Jakarta Post 12th Feb 2015
Indonesia’s three largest telecommunications tower companies are set to expand their scale and market share to tap into the country’s growing telecommunications industry, international rating agency Moody’s said in a report. Moody’s considers that the telecommunications tower industry in Indonesia is at an inflection point, with the major telecom operators likely to dispose of additional tower assets over the next 12-18 months. In this context, Moody’s expects the three largest companies — Profesional Telekomunikasi Indonesia (Protelindo, with a rating of Ba2 stable), Solusi Tunas Pratama (STP, unrated) and Tower Bersama Infrastructure (TBI, Ba2 negative) — to actively bid for these portfolios as they come up for sale.
Alibaba’s AliExpress Sets Its Sights On Indonesia’s Promising E-Commerce Market Tech Crunch 11th Feb 2015
Chinese e-commerce behemoth Alibaba Group is keen to expand beyond its home market, and now it has set its sights on Indonesia. The company announced that AliExpress, one of its e-commerce sites, has signed a strategic agreement with DOKU, Indonesia’s largest online payment provider. It also launched a website and customer service line in Bahasa and English. AliExpress allows vendors in China to sell small quantities of goods to overseas shoppers at wholesale prices. Indonesia’s e-commerce market is still small compared to China and India, but it is expected to grow to US$18 billion by 2015, making it Southeast Asia’s largest.
Indonesia spent US$16.5 billion on information technology ANTARA 11th Feb 2015
Indonesia spent US$16.5 billion on information and communication technology until the end of 2014, according to the International Data Corporation (IDC). "This value is expected to continue to increase, in keeping with the growth of population that will need the support of better infrastructure and information technology services," President Director of NEC Corporation Nobuhiro Endo said.
Local smartphone brands set to enjoy booming market The Jakarta Post 10th Feb 2015
Local smartphone brands are gaining traction with Indonesia’s consumers, with local phone manufacturers boosting their production amid growing demand. Polytron and Evercoss are two local brands that claim to be ready to meet growing demand for local brand enthusiasts in the country. PT Hartono Istana Teknologi, which manufactures Polytron branded-electronic devices, will open a new phone production facility this year to increase its output, according to the company’s public relations and marketing event manager Santo Kadarusman.
Infrastructure
Ambassador: Direct Flights to Open Between Yogyakarta and Myanmar The Jakarta Globe 11th Feb 2015
Direct flights between Yogyakarta and Myanmar will start this year with the aim of boosting the number of tourists from Myanmar visiting the city and other places in Indonesia, Indonesia’s ambassador to Myanmar has said. Only dozens of tourists from Myanmar visit Indonesia each year despite visa-free travel between the Association of Southeast Asian Nations (ASEAN) member states.
Jakarta’s Flood Problem Totally Solvable, for US$9.2b The Jakarta Globe 11th Feb 2015
The floodwaters that inundated many parts of the Greater Jakarta area this week have so far caused Rp3 trillion (US$234 million) in losses, the Indonesian Chambers of Commerce and Industry (Kadin) said in an estimate. The Jakarta Water Management Agency mentioned the city needs Rp118 trillion (US$9.2 billion) to make Jakarta flood-free. For comparison, that amount of money is greater than the 2015 state budget’s combined allocation for the ministries of health, agriculture, maritime affairs and fisheries, forestry, energy and mineral resources, and public housing. It is also 18 percent larger than the nation’s defense spending this year.
Moratorium on New Malls Leads to Retail Space Shortage The Jakarta Globe 11th Feb 2015
The retail space market in Jakarta anticipates limited future supply due to a moratorium policy for new mall development, a global property consultant company Savills PCI Research said in a new report. The capital city put in place the mall development moratorium in late 2011 under then governor Fauzi Bowo, after the city experienced a boom in mall construction, triggering concerns that it may lead to deteriorating quality of life, through greater traffic jams and less public space. In September 2013, Fauzi’s successor Joko Widodo extended the moratorium, but the current governor, Basuki Tjahaja Purnama, has not outright banned mall developments, saying as long as the new development does not exacerbate traffic congestion, he will allow it to go ahead. Last year, retail space growth had already slowed due to the impacts of the economic slowdown, according to Savills, with only around 141,848 square meters of new retail space was added to the market.
Indonesia’s First Privately Run Airport to Be Built in Riau Islands Province The Jakarta Globe 8th Feb 2015
From Jakarta to Jambi and Pontianak to Pangkalpinang, Indonesian cities have experienced tremendous growth in recent years. Unfortunately the airports of these and other cities in the archipelago have been slow to keep up with demand, and are now suffering from overcapacity. This is not just due to local demand. The introduction of the Association of Southeast Asian Nations (Asean) Open Skies policy is certain to trigger more passenger traffic within the region. This issue must be addressed as airports not only serve to move people, but also contribute to growth. An example is New Zealand’s Auckland Airport, which served 14 million passengers in 2013 and contributed close to $15 billion, or 19 percent of the country’s gross domestic product. Virtually all of Indonesia’s airports are government-owned. But a law governing aviation, passed in January 2009, sets out how the private sector can participate in the development of airports in Indonesia. In May last year, airports were taken off the “negative investment list,” allowing foreign companies to own up to 49 percent of airport ventures.
Minister Issues 80 Regulations to Improve Transportation Tempo 6th Feb 2015
Transportation Minister Ignasius Jonan said he would issue around 80 ministerial regulations to improve national transportation management. The regulations include land, air and sea transports as well as trains. “There are various kinds. There is one for safety standards. Regulation on service standards will be issued next week,” said Jonan on Thursday. Some of the new regulations are the Transportation Ministry Regulation No. 13/2015 on Airport Flying Time Allocation and Transportation Ministry Regulation No. 12/2015 on Online Air Transport Licensing.
Manufacturing
Govt prepares incentives for labor-intensive industry The Jakarta Post 12th Feb 2015
The government is preparing specific incentives to spur growth in the labor-intensive industry to help create 2 million new jobs each year. The incentives may comprise fiscal incentives, such as exemption of import duties for raw materials, and non-fiscal incentives, according to Investment Coordinating Board (BKPM) chairman Franky Sibarani. “The most important point is that we’ve lost the momentum to boost exports and investment in the labor-intensive industry. The trend shows that in the past three years, the number of workers absorbed by the industry has declined,” Franky said.
Japanese firms to invest US$1.32b in RI The Jakarta Post 12th Feb 2015
At least four Japanese firms have expressed a commitment to investing US$1.32 billion in Indonesia over the next few years, according to the Investment Coordinating Board (BKPM). The largest contribution of $600 million would come from a Japanese automotive firm eyeing a manufacturing facility in Bekasi, West Java, investment promotion deputy chief Himawan Hariyoga said.
Samsung opens cell-phone factory in Indonesia The Jakarta Post 11th Feb 2015
South Korean electronics giant Samsung Electronics Corporation has opened a new cell-phone factory in Indonesia, South Korean Ambassador to Indonesia Taiyoung Cho says. According to him, the facility, developed with an investment of more than US$20 million, began operating last month. It is slated to produce around 800,000 cell phones annually, Indonesian officials have said.
No discriminatory incentives for national car: industry official The Jakarta Post 10th Feb 2015
The government says it will not provide incentives that are discriminatory in nature for the so-called national car, set to be developed by Malaysia's carmaker Proton and Indonesia's PT Adiperkasa Citra Lestari. Industry Ministry acting director general for high-technology priority industry Panggah Susanto said in Jakarta on Tuesday that Indonesia had learned from its past national car program, which had been rejected by the World Trade Organization (WTO) as discriminatory to foreign car makers as it enjoyed exemption from import duties and luxury taxes on imported vehicles and components.
MoU with Malaysian automotive firm is B2B affair: President Antara News 9th Feb 2015
President Joko "Jokowi" Widodo stressed that a Memorandum of Understanding (MoU) for electric car production with Malaysian automotive company Proton is a business-to-business relation. "That is be a business-to-business relation. I think the MoU is still in a very early process," President Jokowi said before visiting Rizal Memorial Park in Manila, the Philippines, on Monday. When asked about the possibilities of cooperation between Indonesia and Malaysia to develop an electric car, the President stated it needed some feasibility studies. President Jokowi added that the MoU for electric car development emerged after he met with former Prime Minister Mahathir Mohammad and Prime Minister Najib Razak following an invitation from them. "I was invited, so I went. But this (the MoU) is still in very early stages," he added.
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