| Regional Affairs
New Jakarta Deputy Governor to Pick Up Where Jokowi Left Off Jakarta Globe 18th Dec 2014
Newly inaugurated Jakarta Deputy Governor Djarot Saiful Hidayat said he plans to revive blusukan, or impromptu visits, to the city’s poorer areas, an act abandoned by city officials since former governor and pioneer of the practice Joko Widodo became president. The capital’s new second in command, who Governor Basuki Tjahaja Purnama said possesses the same populist and casual style of leading as Joko, aims to revive blusukan to learn first-hand the people’s aspirations while also raising awareness of the city’s policies and programs. “I will concentrate more on going into the field. Not just to look around, but to stage dialogs and talk to [the city’s] target groups,” Djarot explained.
National Affairs
KPK raids ministry’s office in land-conversion case The Jakarta Post 17th Dec 2014
Just one day after the Jakarta Corruption Court made a new revelation about the role of former Forestry minister Zulkifli Hasan in the graft-ridden land-conversion permit in Riau, the Corruption Eradication Commission (KPK) on Tuesday raided his former office to collect more evidence on the involvement of the current People’s Consultative Assembly (MPR) speaker in another graft case. Zulkifli of the National Mandate Party (PAN) has been in the spotlight for the illegal land-conversion permit issuance for a luxury housing project in Bogor, West Java, constructed by giant property firm PT Sentul City, during his time as a minister. Former Bogor regent Rachmat Yasin has been found guilty of receiving Rp 4.5 billion (US$348,973) bribes from Sentul City president director Kwee Cahyadi Kumala, who is also president commissioner of the property firm PT Bukit Jonggol Asri (BJA), the major shareholder of Sentul City, in return for the permit.
Death toll from Banjarnegara landslide stands at 70 The Jakarta Post 17th Dec 2014
A joint search and rescue team found six more bodies of Banjarnegara landslide victims as of noon Wednesday, bringing the death toll of the natural disaster up to 70 people. As many as 38 people are still listed as missing five days after a landslide hit dozens of homes in Grumbul Jemblung, Sampang village, Karangkobar district, Banjarnegara regency, Central Java, on Dec. 12. “From the latest development of the rescue operations as of noon today, 70 bodies have been recovered. Based on orders from the President and Central Java governor, we will continue the evacuation process until all victims are recovered,” Banjarnegara deputy regent Hadi Supeno told The Jakarta Post on Wednesday.
Analysis: The virtue of strengthening domestic palm-oil market The Jakarta Post 17th Dec 2014
As crude palm oil (CPO) becomes Indonesia’s main export commodity, it is not sinful to have the idea of switching the focus of our CPO market from export oriented to domestic oriented. By having that approach, what this article means is balancing the market between export and domestic demand. The most obvious benefit to having more depth in the CPO market domestically is anticipating the impact of global economic fluctuations. One example can be seen in the slowdown of palm-oil consumption growth in the Chinese market recently. That missing portion should have been allocated to Indonesia’s domestic market. Therefore, in terms of volume, the industry could maintain sales for stabilizing revenue. The second-round effect from stable sales volume is less fluctuation in CPO prices. This is really helpful for exporting countries like Indonesia in this gloomy period.
Islamic State Fears Mounting in Indonesia, Malaysia The Diplomat 16th Dec 2014
Officials from Indonesia and Malaysia, Southeast Asia’s two Muslim-majority states, have expressed concern that the threat from the Islamic State (IS) movement in Syria and Iraq could be growing in their countries in spite of initial measures taken to counter the movement’s appeal. In Indonesia, the world’s largest Muslim-majority country, the nation’s counterterrorism chief Saud Usman Nasution warned last week that recruitment of IS fighters from Indonesia had more than tripled in just a few months. All in all, Saud said around 514 Indonesians have gone to Iraq and Syria to fight with the movement, with about half being students or migrant workers who had already been living in neighboring countries. That makes Indonesia Southeast Asia’s biggest supplier of IS fighters by far, raising questions about what might happen once those militants return home.
KPK to Step Up Regional Monitoring With New Branch Offices The Jakarta Globe 15th Dec 2014
The Corruption Eradication Commission (KPK) plans to start opening branches across the archipelago next year in order to improve its supervision of regional governments, one of its leaders has announced. Bambang Widjojanto, a deputy chairman at the KPK, said on Sunday evening that the anti-graft body was considering opening one branch office in Sumatra next year, as part of its plan to open at least five branch offices throughout Indonesia in the next ten years. “We’ve decided to open a representative office in one of the provinces in Sumatra in 2015,” said Bambang, as cited by Tempo. “We’re still studying in which province we should build our office.”
Customs
Malaysia Extends Export Duty Exemption on Crude Palm Oil Until Jan. Jakarta Globe 16th Dec 2014
Malaysia, the second-largest palm grower, extended its export duty exemption on crude palm oil until January, a circular from the Malaysian customs department showed on Tuesday. Malaysia first scrapped its export taxes for the crude grade for September and has kept that unchanged until December, as it looked to encourage overseas sales and cushion the fall in prices which have tumbled nearly 20 percent this year. Industry players had expected Malaysia to carry on with duty free shipments of crude palm oil, and say Indonesia will likely follow suit as benchmark palm prices struggle to pull away from five-year lows. Some market players expect Malaysia to exempt the levy into March next year. The Southeast Asian country calculated a reference price of 2,124.53 ringgit ($608) per metric ton for January crude palm oil, effectively abolishing the export tax duty.
Govt revokes thousands of import licenses The Jakarta Post 13th Dec 2014
The government has revoked thousands of import licenses for a wide range of products because of administrative incompliance. Two thousand, one hundred and sixty-six licenses for registered importers (IT) were annulled, comprising 836 import licenses for electronics, 321 licenses for apparel, 290 licenses for food and beverages, 256 licenses for cosmetics and home care, 179 licenses for toys, 133 licenses for medicine and food supplements and 151 licenses for footwear, according to data released by the Trade Ministry. The revoked licences represent 43.17 percent of the overall 5,017 licenses issued by the ministry and affect US$849 million in imports. The licenses were scrapped because the importers failed to report the realization of their import plan as stipulated in a trade minister regulation issued earlier this year, according to Trade Minister Rachmat Gobel.
Defense & Security
U.S., Indonesia Looking To Boost Military Ties: Officials The Diplomat 16th Dec 2014
The United States and Indonesia are looking to boost defense ties to tackle challenges ranging from maritime security to the Islamic State militant group operating in Iraq and Syria, officials said last week. Brigadier General Jan Pieter Ate, the director for international cooperation at the Indonesian defense ministry, told a public forum in Washington, D.C. last Thursday that a priority area for Indonesia would be strengthening bilateral cooperation with the United States on combating the Islamic State. “We don’t have this yet,” Ate said at a day-long conference on Indonesia organized by the United States-Indonesia Society. The Islamic State has featured prominently in recent discussions between the United States and Indonesia. The head of Indonesia’s armed forces General Moeldoko and commander of the U.S. Pacific Command Samuel Locklear talked about the issue in a November 5 meeting in Brunei. U.S. President Barack Obama and his Indonesian counterpart Joko “Jokowi” Widodo also discussed it during their consultation on the sidelines of the Asia-Pacific Economic Cooperation meeting on November 10. The United States has looked for help from ASEAN states including Indonesia to stem recruitment and freeze militant assets. The issue is also a rising concern for Indonesia, the world’s largest Muslim country, with its counterterrorism chief declaring last week that the group’s recruitment numbers from the country had tripled in the last few months to over 500 people. Beyond the Islamic state, another growth area is maritime security. Speaking after Ate, Amy Searight, the U.S. deputy assistant secretary of defense for South and Southeast Asia, said Jokowi’s new “global maritime axis” doctrine, which emphasizes Indonesia’s pivotal role as a maritime power between the Indian and Pacific oceans, offered an opportunity for both sides to exchange ideas since the United States also sits astride two oceans – the Atlantic and the Pacific.
Natuna Is Indonesian, Not Chinese: Jokowi Adviser The Diplomat 14th Dec 2014
ndonesia will remain firm in protecting its sovereignty on maritime issues ranging from the South China Sea to illegal fishing, a senior adviser to Indonesian president Joko “Jokowi” Widodo said Tuesday. “The sovereignty of Indonesia cannot be negotiated…we are very, very firm on this,” Luhut Binsar Panjaitan, former commander of the Indonesian special forces, told an audience at the Center for Strategic and International Studies, a think tank based in Washington, D.C. On the South China Sea issue, Luhut said that while Indonesia could help in “bridging” differences between ASEAN claimant states and China, it would also not shy away from exploiting resources in what it viewed as its own waters. This was especially true of the resource-rich Natuna islands, where Indonesia has been concerned that a portion of its surrounding waters overlap within China’s expansive nine-dash line claim. “Regarding the Natuna, we understand very much this is the territory of Indonesia, and I don’t think there are any problems so far. I think we are going to do exploration for…gas,” Luhut added. He also said Indonesian energy giant Pertamina’s cooperation with Chevron, an American firm, in the Natuna Islands served to protect Indonesia’s claim from China due to U.S. involvement.
Economics
Indonesian Finance Minister Sees 4.5-5% Inflation in 2015, Says 7% GDP Growth in 2016 ‘Possible’ The Jakarta Globe 18th Dec 2014
Indonesian Finance Minister Bambang Brodjonegoro says on Thursday that he expects inflation to be between 4.5 percent and 5 percent in 2015. For this year, Indonesian’s central bank has estimated an annual inflation rate of 7.9 percent. Some prices spiked after the government in mid-November hiked fuel prices by more than 30 percent to cut Indonesia’s budget deficit and make money available for other uses than fuel subsidies. Separately, Bambang said Indonesia can lift its economic growth rate to 7 percent in 2016 barring any major turbulence.
Jokowi holds Cabinet meeting to discuss rupiah The Jakarta Post 17th Dec 2014
President Joko "Jokowi" Widodo told his ministers to resolve the weakening of the rupiah against the US dollar on Wednesday. "In this kind of opportunity, industry should be encouraged... so that the export-oriented industries can move faster and are able to take advantage of the weakening rupiah," said Jokowi as he opened a limited Cabinet meeting held on Wednesday to discuss the rupiah. The Cabinet meeting discussed a number of further issues, including the strategy to achieve targeted economic growth, the finalization of the 2015-2019 National Mid-Term Development Plan (RPJMN) and the revision of the 2015 government working plan, as well as the 2015 ministerial budget, particularly for newly established ministries.
Finance Ministry Says Will Buy Own Bonds if Needed as Capital Flies Out of Indonesia The Jakarta Globe 16th Dec 2014
Indonesia’s government said on Tuesday it will buy government bonds back from the secondary market if needed as the rupiah slumps and government bond yields soar on the flight of capital from the country. The Russian central bank raised its main interest rate to 17 percent on Tuesday morning, vacuuming capital out of emerging market countries and pushing the yield on Indonesian 10-year benchmark bonds to 8.514 percent, the highest since Oct 1. The rupiah reached a fresh 16-year low of 12,930 against the dollar, although it recovered to 12,650 by 3:28 p.m. local time. Finance Minister Bambang Brodjonegoro said the rupiah’s fall was also caused by expectations of more hawkish statements coming out the Federal Reserve’s Open Market Committee meeting on Wednesday. Indonesia’s Finance Ministry said that between Dec 1 and Dec 12, Rp 11.2 trillion ($8.8 billion) of foreign money exited the government bond market, and foreign ownership of government bonds declined to 38.9 percent from 39.5 percent as capital flew out.
Energy
Indonesia Lax When Illegal Loggers Clear Forests for Palm Plantations The Jakarta Globe 17th Dec 2014
A drop in world palm oil prices is not expected to slow illegal logging in Indonesia’s rainforests as companies continue to expand plantations, according to a new report. Between 1990 and 2010, Indonesia’s palm oil plantations grew more than seven-fold to 7.8 million hectares, the Environmental Investigation Agency (EIA) said in the report released on Tuesday. About half the new plantations used land once occupied by natural forests, making the palm oil industry the leading driver of deforestation in recent years. Much of the land is cleared without the proper permits, and local authorities have failed to enforce laws protecting forests from clear-cutting for plantations, the report said.
72.5% of oil and gas output at risk from expiring contracts The Jakarta Post 16th Dec 2014
Contracts for as many as 32 oil and gas blocks are scheduled to expire within the next 10 years, increasing concerns over a potential energy crisis if the government fails to make a quick decision. A number of the blocks — whose combined production accounts for 72.5 percent of the country’s current oil and gas output — will start to expire next year and the expirations will continue annually until 2024, according to data from the Upstream Oil and Gas Regulatory Special Task Force (SKKMigas). Oil and gas contractors in the country are allowed to submit extension appeals for their blocks at a maximum of 10 years before their expiry dates. Certainty over the contracts is seen as necessary because contractors need to calculate whether to continue pouring money into their blocks. Failure to address the issue will affect the output of the block, which will in turn hurt the country’s total output.
Govt may extend Masela deepwater contract The Jakarta Post 16th Dec 2014
The government is considering granting a contract extension for deepwater development in the Masela block so that the project becomes more economical and helps the country minimize its energy deficit. Vice President Jusuf Kalla said on Monday that the extension for the Masela block would be awarded if the developer performed well and accelerated its progress. “We won’t extend it now. We understand that it’s impossible for developers to produce from the project [which has been ongoing for] six years. However, it will be extended only if you [the developer] succeed,” Kalla said.
Low oil price a double-edged sword for Indonesia The Jakarta Post 16th Dec 2014
A top economic minister has warned that an ongoing oil-price slump might not only bring the benefits of cheap oil to Indonesia, but could also lead to harmful effects from shrinking revenue. Lower oil prices would shrink burdensome fuel subsidies, but an oil price of below US$60 per barrel would not be economical for Indonesia as the loss in state revenue from the oil sector might exceed the economic benefits, according to Finance Minister Bambang Brodjonegoro. He noted that there had been an “oil-price war” between Saudi Arabia and the US, with the former apparently deliberately allowing oil prices to decline to hurt newly operating shale-oil producers in the world’s largest economy.
Govt to issue regulation allowing distribution of subsidized fuel exceeding quota The Jakarta Post 15th Dec 2014
The government will issue a regulation that allows state oil and gas firm PT Pertamina (Persero) to distribute subsidized fuel exceeding the amount established by the state budget (APBN). “If the subsidized-fuel quota is not enough, then there will be an order letter for Pertamina to keep distributing subsidized fuel until Dec. 31, 2014,” said Naryanto Wagimin, acting director general of oil and gas at the Energy and Mineral Resources Ministry, as quoted by Antara news agency in Jakarta on Monday. However, he added, Pertamina remained optimistic that the fuel consumption would not exceed the quota of 46 million kiloliters (kl) set by the revised state budget (APBN-P).
Financial Services
Indonesian Stocks Jump After Fed’s Announcement to Keep Policy Intact The Jakarta Globe 18th Dec 2014
Indonesian stocks jumped on Thursday, shortly after the long-awaited statement from the US Federal Reserve, which said that it would maintain its monetary policy but could raise interest rates later in 2015. The benchmark stock index — the Jakarta Composite Index — climbed 1.5 percent to 5,113.4, regaining some of the 2.6 percent decline earlier this week. Fed chair Janet Yellen made an announcement on Tuesday that it’s still planning to raise the policy rate next year, though she hinted that it will be sometime after the first quarter of next year.
RI, Singapore step up tax-compliance efforts Jakarta Post 16th Dec 2014
Indonesia and Singapore have expressed a commitment to intensify taxation-information exchanges to counter cross-border tax evasion and tax avoidance, according to a statement issued by the Finance Ministry. The agreement was made during a meeting on Monday between Finance Minister Bambang Brodjonegoro and Singapore’s Finance Minister Tharman Shanmugaratnam. “The two finance ministers agreed to significantly step up the amount of information exchanged by request to reveal information about all assets owned by citizens of the two countries, including financial accounts that have been deliberately hidden to avoid and evade tax,” the statement reads. Indonesia and Singapore have had an agreement since 1992 to exchange tax-related information upon request, including data from financial institutions and individuals who have access to the information.
Rupiah shaky as portfolios divest themselves outside the country The Malay Mail 16th Dec 2014
The Indonesian rupiah may stay on a weak footing after hitting a fresh 16-year low today, hampered by investor jitters toward emerging market assets and the dollar’s firmness. The rupiah’s fall accelerated since Friday in thin year-end trading conditions, with analysts attributing the move to portfolio outflows from Indonesian assets and year-end corporate demand for dollars. “In the case of Indonesia, we have seen portfolio outflows from both equities and bonds,” said Khoon Goh, senior FX strategist for ANZ in Singapore, adding that there has been some fund repatriation by overseas investors. The rupiah fell as far as 12,930 versus the dollar earlier today, its lowest level since August 1998, according to Reuters data. It later rose sharply from that low, which market participants said was partly due to central bank intervention. At 0840 GMT, the rupiah traded at 12,645. ANZ’s Goh said the rupiah may hold near 13,000 to 12,750 until the year-end, supported by central bank intervention.
Indonesia: Regulator proposes more business be placed with local reinsurers Asia Insurance Review 16th Dec 2014
Indonesia's Financial Services Authority (OJK or Otoritas Jasa Keuangan) has proposed that more business be placed with domestic reinsurers from 1 January next year, in order to "improve and optimize capacity in the country". Some classes of business will have to be wholly placed with domestic reinsurers. For other classes, a minimum of 25% of the business have to be similarly placed, with the proportion to be increased in the following years. In a draft circular to the insurance industry, OJK said that the average balance of payments in Indonesian reinsurance transactions within the past five years was a deficit of IDR5.65 trillion (US$455 million) per year. The deficit was caused partly because the reinsurance capacity in the country cannot absorb all reinsurance needs and the reinsurance capacity in the country was not optimally utilised. OJK said that it encourages insurance companies to increase their own retention of business. However, it would also promote optimal utilisation of domestic reinsurance capacity through regulation.
Indonesia A Buy Amid Cries of Rupi-arrrrgh! Barron's 16th Dec 2014
Indonesia will be hoping that history neither repeats nor rhymes as the slump in its currency, the rupiah, to a 16-year low revives memories of the 1997-1998 emerging market crisis that forced the Southeast Asian nation into a $23 billion bail-out orchestrated by the International Monetary Fund and brought to an end the 32-year rule of former authoritarian leader Suharto. Despite the punishment handed out to the rupiah, coupled with a decline in the Jakarta Composite Index to its lowest level since early November, many analysts remain sanguine about Indonesia’s prospects. They are optimistic recently elected President Joko Widodo will pursue reforms needed to foster the development of the world’s fourth most populous nation, which in turn, could underwrite gains for investors willing to look beyond the current volatility.
Bank Mandiri expects major increase in usage of e-money The Jakarta Post 16th Dec 2014
State-owned lender PT Bank Mandiri is aiming for extensive usage of its electronic money (e-money) in the transportation sector as part of its efforts to reach the goal of being one of Southeast Asia’s prominent market players in the banking industry. The lender believes that e-money has the potential to drive the future of business for every bank in the region, according to Bank Mandiri’s vice president of electronic banking group Budi Hartono. Budi said the vision was stated in Bank Mandiri’s transformation program for the period 2015-2020 as its strategy to become one of ASEAN’s prominent market players. As of September this year, the bank’s e-money transactions grew 10 percent to Rp 1.2 trillion (US$95.04 million), from a total of 4.5 million cards in circulation. Bank Mandiri’s e-money transactions accounted for 65 percent of the total nationwide.
Indonesia Rupiah Sinks to 16-Year Low as Bonds Slide on Outflows Bloomberg 15th Dec 2014
Indonesia’s rupiah tumbled to the lowest level since the Asian financial crisis as an uptick in dollar buying by local companies before the year-end coincided with a rout in the sovereign bond market. The currency slid 1.9 percent to 12,698 per dollar in Jakarta, the lowest close since August 1998, prices from local banks show. That was the biggest drop since Aug. 1. In the offshore market, one-month non-deliverable forwards declined 1.4 percent to 12,919, according to data compiled by Bloomberg. Overseas investors have pulled 10.09 trillion rupiah ($795 million) from local-currency sovereign bonds this month through Dec. 11, finance ministry data show, as the prospect of U.S. interest-rate increases damped demand for emerging-market assets. Indonesia’s current account, which has been in deficit for the past 12 quarters, makes it vulnerable as concern over the global economic outlook deters risk-taking. The yield on the country’s 10-year sovereign notes jumped the most since January.
Govt to issue Rp 7.1 trillion project-based ‘sukuk’ Jakarta Post 13th Dec 2014
The government, via the Finance Ministry, plans to issue Rp 7.14 trillion (US$570.9 million) worth of project-based sukuk (Islamic bonds) next year to finance the development of three infrastructure programs as well as trigger the growth of the debt paper market. The amount of issuance for the sukuk will be allocated in the 2015 revised state budget as part of the state’s financing, according to Suminto, director of Islamic bonds at the ministry’s debt management office. The government plans to discuss the 2015 revised state budget earlier next year with the House of Representatives, which will change the previously approved Rp 2,039.5 trillion in the 2015 state budget.
Food & Agriculture
Cargill launches its first Asian cacao facility in Gresik Jakarta Post 15th Dec 2014
Global food company Cargill launched on Wednesday a cacao processing facility in Gresik, East Java, the company’s first in Asia and the largest of its kind in the region. The new facility, which commenced construction in May last year and absorbed US$100 million in investment, has the capacity to process up to 70,000 metric tons of cacao a year into premium cocoa powder under the brands Cargill and Gerkens, as well as into high quality cocoa butter and liquor. Annual production is expected to reach 6,000 metric tons of cocoa liquor, 21,000 metric tons of cocoa butter and 28,000 metric tons of cocoa powder. Of total production, 75 percent will be exported to other countries in the continent, while the remainder will be distributed locally to meet domestic demand.
ICT
Telco operators demand incentives The Jakarta Post 16th Dec 2014
The country’s major telecommunications operators have called on the government to provide certain incentives for them to take part in the government’s five-year broadband plan. PT Telekomunikasi Indonesia (Telkom), PT XL Axiata and PT Indosat are willing to join the fray in the expansion of the country’s broadband capacity, but expecting support from the government. Telkom acting president director Indra Utoyo said on Monday that Telkom expected the government to provide a number of incentives for his firm in exchange for becoming the driver of the broadband plan.
Infrastructure
Several ports unfit for marine highway: Transportation Ministry The Jakarta Post 15th Dec 2014
The Transportation Ministry has proposed a revision to a coastal-trade concept that is part of President Joko “Jokowi” Widodo’s plan to realize his vision of turning the country into the world’s maritime axis, as several ports to be built are considered unsuitable. Several seaports planned by the National Development Planning Board (Bappenas) for the marine-highway plan — which will see new routes connecting the country’s east and west with scheduled maritime traffic that is charged with a fixed rate — will unlikely be developed into container terminals, according to the Transportation Ministry’s dredging project and port operation director, Adolf Tambunan.
Who’s Affected By Jakarta’s Motorbike Ban? The Wall Street Journal 17th Dec 2014
A controversial test ban that prevents motorcycles from using two of Jakarta’s main thoroughfares began today at 6 a.m., with the head of Indonesia’s courier service saying it could stall deliveries in the capital. The trial, which lasts for a month, will prevent two-wheeled vehicles from driving down Jl. Thamrin starting at the Hotel Indonesia traffic circle up to Medan Merdeka Barat, or near the presidential palace. The city government says the ban is aimed at reducing traffic in the congested capital and cutting down the number of traffic accidents. Residents who rely on motorbikes to get to work have complained about the new regulation, saying they have few other options for transportation. A look at the number of those potentially affected.
Govt to roll up sleeves on infrastructure projects next year Jakarta Post 17th Dec 2014
Public Works and Public Housing Minister Basuki Hadimuljono says that next year’s increasing fiscal savings from fuel subsidy reallocation and the government’s austerity measures has allowed the ministry to request an additional budget of Rp 47.5 trillion (US$3.68 billion) in the 2015 state budget, up from the initial request of Rp 12 trillion. “If possible we will further increase the figure of the additional budget, of course after considering the ministry’s capacity as well as the availability of the service provider,” Basuki told reporters on Tuesday. The government had previously allocated Rp 85 trillion for the ministry both for public works and public housing in the 2015 state budget. The ministry initially proposed a total of Rp 12 trillion from fiscal savings to finance the ministry’s clean water and sanitation projects (Rp 7 trillion), irrigation system and dams (Rp 4 trillion) and housing projects (Rp 1 trillion).
Indonesia Could Really Use More Roads Everywhere Jakarta Globe 15th Dec 2014
Recently I had the opportunity when looking at a mini-hydro development to travel on the toll road network that connects Jakarta and Bandung, West Java, as well as the roads beyond. I still feel the pain of the awful experience of traveling the 28 kilometers between Ciawi and Cibadak — it took three hours — and cannot wait to see the long-overdue toll link between Ciawi and Sukabumi constructed. Traveling to Jakarta from Bandung is certainly busier than it was even two years ago, and entering the last 28 kilometers from Cawang at Cibitung clearly demonstrates the lack of capacity on entering the Greater Jakarta boundary. The opening of the long-stalled JORR 2 section has had a dramatic effect on the traffic flows along the whole of the JORR link that now, as anticipated, carries a very large portion of the truck traffic, which previously went through the city center between Cawang and Grogol. However, it is clear that apart from the severe lack of road capacity within the cities of Jakarta and Bandung there is also a shortage of toll roads serving these conurbations.
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