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Regional Affairs
Indonesia wants protection for migrant workers at ASEAN level ANTARA 28th Jan 2015
Indonesian Foreign Affairs Minister Retno LP Marsudi pushed for the protection of migrant workers at the regional level at a meeting of foreign ministers of the ASEAN member states. Marsudi stressed on the importance of ensuring protection for migrant workers, especially in the ASEAN region, following the implementation of the ASEAN Economic Community (AEC). According to her, Indonesia's proposal was in line with the ASEAN Declaration on the Protection and Promotion of the Rights of Migrant Workers as well as the ASEAN Human Rights Declaration.
National Affairs
Jokowi Folds Emissions Agency BP REDD+ Into Forestry Ministry Jakarta Globe 29th Jan 2015
President Joko Widodo has disbanded Indonesia’s BP REDD+ agency, which was established in 2013 to help the country meet greenhouse gas emission targets from deforestation, and merged it with Ministry of Environment and Forestry. The decision, which was issued via Presidential Decree No. 16/2015 issued on Jan. 23, will see the Reducing Emissions From Deforestation and Forest Degradation (REDD+) Management Body, as well as the National Council on Climate Change, folded into the ministry. Both agencies are peak government bodies whose role is crucial to halting Indonesia’s rapid deforestation rates and mitigating climate change. “The task and function of reducing greenhouse emissions conducted by BP REDD+ as stated in Presidential Decree No. 62/2003 now will be integrated as the ministry’s task and function,” Article 59 of the decree said.
KPK to summons police generals by force The Jakarta Post 28th Jan 2015
The Corruption Eradication Commission (KPK) said it would bring by force a number of police generals and middle-ranking officers who skipped questioning on Tuesday to complete the dossiers of National Police chief candidate Comr. Gen. Budi Gunawan. The antigraft body made the decision after the police officers failed to turn up twice for questioning and its request to the National Police to allow them to testify went unheeded. KPK spokesman Priharsa Nugraha said KPK investigators had rescheduled for next week, questioning for Insp. Gen Andayono, currently the East Kalimantan police chief, Adj. First. Insp. Revindo Taufik Gunawan Siahaan and Brig. Gen. (ret.) Heru Purwanto after they failed to show up on Tuesday.
KPK faces total paralysisThe Jakarta Post 28th Jan 2015
The Corruption Eradication Commission (KPK) warned on Tuesday that the National Police’s moves in handling criminal reports against its commissioners could cause a total paralysis of the antigraft body’s leadership. KPK prevention unit deputy Johan Budi said the total paralysis could take place if the National Police pressed ahead with processing the criminal reports filed against all KPK commissioners and named them as suspects, as it would automatically result in the suspension of KPK commissioners as regulated under Article 32 of Law No. 30/2002. The article stipulates that KPK commissioners must be suspended if they are facing criminal charges.
Indonesia’s Capital City Jakarta at Bottom of Safe Cities Index 2015 Indonesia Investments 28th Jan 2015
In the Safe Cities Index 2015, launched by the Economist Intelligence Unit (EIU), Indonesia’s capital city of Jakarta is ranked at the bottom of the index. The Safe Cities Index, which covers 50 large cities worldwide (selected on factors which include regional representation and availability of data), based its ranking on an average score across four categories: digital security, health security, infrastructure safety and personal safety.
First 100 Days as Much a Referendum on Jokowi as on Megawati Jakarta Globe 28th Jan 2015
Analysts and politicians have called for President Joko Widodo to break away from his political patron, Megawati Soekarnoputri, after a politician in the Indonesian Democratic Party of Struggle that she chairs called for Joko’s impeachment. “This is the right time to impeach Jokowi,” PDI-P legislator Effendi Simbolon said on Monday, referring to the president by his nickname. Effendi criticized a range of Joko’s policies, including his decision to eliminate the fuel subsidy scheme and vow to tightly monitor public officials’ performance. “I think [Joko] won’t last two years; at the earliest, in a matter of months, he will resign,” Effendi told a press conference. Effendi added that many in the PDI-P are unhappy with Joko, who believe the president has strayed far from their vision. The party’s biggest disappointment, Effendi said, stems form Joko’s decision to delay the inauguration of Comr. Gen. Budi Gunawan, the president’s sole nominee for the job of National Police chief, days after Budi was named a graft suspect by the Corruption Eradication Commission (KPK).
House to ban lawmakers taking showbiz jobs The Jakarta Post 28th Jan 2015
The House of Representatives is planning to ban lawmakers from taking side jobs in the entertainment industry amid a public outcry about lawmakers who appear on television outside of their legislative roles. The ban has already been included in the draft of an ethical code regulation that is currently being discussed.
Jakarta Council Approves 2015 Budget Jakarta Globe 27th Jan 2015
The Jakarta City Council, or DPRD, passed the 2015 regional budget authorization bill on Tuesday afternoon, nearly a month past its due date, wrapping up a protracted debate and string of delays over alleged irregularities included in earlier drafts. Council chairman Prasetyo Edi Marsudi of the Indonesian Democratic Party of Struggle (PDI-P) gaveled in the budget’s approval following an acclamation vote in a plenary session attended by 86 of the chamber’s 106 members. Under the approved budget, the capital plans to spend Rp 73.083 trillion ($5.8 billion) this year, an increase from the 2014 regional budget, which allocated Rp 72.9 billion in spending. Taufik said councilors paid special attention to education, funding for which will increase by 27 percent this year, as well as health, towards which the new budget includes spending provisions to convert 18 community primary care clinics (puskesmas) into class D hospitals. That puts Jakarta’s health spending at 9 percent of the region’s budget, consistent with current law, according to Taufik, who also serves as deputy chair on the council’s budget committee.
KPPU Suspects Cartel Practices TEMPO 27th Jan 2015
The Business Competition Supervisory Commission (KPPU) suspects the existence of cartel practices causing goods prices remain high despite the cut in fuel prices. In January alone, the government has lowered the price of subsidized fuel twice. The KPPU will soon call representatives of staple good producers as well as logistics businessmen, requesting information about the problem.
Govt to Enact Regulation Requiring All Public Officials to Disclose Wealth The Jakarta Globe 27th Jan 2015
The Indonesian government is set to enact a regulation mandating public officials on all levels to disclose their wealth, Administrative and Bureaucratic Reform Minister Yuddy Chrisnandi said on January 27. Currently, only ministers, directors general, division heads, generals, leaders of independent bodies and directors of state-owned companies are mandated by law to disclose their wealth.
Indonesia's Investment Board to Speed Up Issuance of Investment Licenses ANTARA 26th Jan 2015
The Investment Coordinating Board (BKPM) will do its best to accelerate the issuance of investment permits through an integrated one-stop service (PTSP), BKPM Head Franky Sibarani said. "For the time being, I can assure that only half of the 930 days will be needed for a license to be issued. We are still discussing how to speed up the process," he added.
Indonesia, China hold economic dialogue Antara News 26th Jan 2015
Indonesia and China held the first bilateral economic meeting on Monday evening, with the aim to enhance future cooperation between the two countries in the field. "Indonesia and China have shared a strong relationship for long, even before Indonesias independence. Today, the countries have established a comprehensive strategic partnership," Indonesian Economic Coordinating Minister Sofyan Djalil said here on Monday. According to Djalil, initial trade relations between the two nations are developing well. He hopes that cooperation can be enhanced in the future.
Jokowi inaugurates BKPM one-stop integrated service The Jakarta Post 26th Jan 2015
President Joko "Jokowi" Widodo inaugurated on Monday the one-stop integrated service (PTSP) at the Investment Coordinating Board (BKPM). The BKPM said in its report that the PTSP was established in response to the presidential instruction to create a business-friendly bureaucracy by eliminating costly red tape for entrepreneurs and investors. After thorough coordination, 22 ministries and institutions have delegated their authority to issue business permits to the BKPM and assigned their officers to the PTSP, according to Antara news agency. BKPM head Franky Sibarani said that the BKPM and the ministries and institutions were ready to serve the licensing processes for all business fields.
N.K. leader may join Bandung Conference in April: source The Korea Herald 25th Jan 2015
North Korean leader Kim Jong-un may attend an international meeting to open in Indonesia in April, a government source here said Sunday. If Kim does so, it would be his debut to the international diplomatic scene as the isolated nation’s leader. There has been no report of overseas trips by him since he took power in December 2011. Keen attention is being paid to whether Kim attend a Moscow ceremony in May to commemorate the 70th anniversary of the Soviet Union’s victory in World War II. South Korean officials also raise the possibility that Kim will head first to Indonesia for the Asian-African Conference, or the Bandung Conference. The meeting is to be held in Jakarta from April 22-23, followed by a key anniversary event in the Indonesian city of Bandung on April 24.
RI drops Oz from visa-free policy The Jakarta Post 24th Jan 2015
The plan to waive the visa requirement for visitors from Australia, previously aimed at attracting more foreign tourists, has been dropped amid concerns surrounding repeated turbulence over Jakarta-Canberra diplomatic ties. The government had only proceeded with the visa-free policies for Chinese, Russian, South Korean and Japanese tourists, Coordinating Maritime Affairs Minister Indroyono Soesilo said on Thursday. “We have confirmed the visa-free policy for Japanese citizens. Russia and South Korea will follow suit soon. For China, we have three months to finalize everything,” he said.
Anies Baswedan Announces National Exam Revamp Jakarta Globe 23rd Jan 2015
Indonesia’s Ministry of Education has announced a sweeping overhaul of the controversial national exams for school students, whose graduation will now no longer depend on their passing the dreaded tests. “Students’ graduation will be decided entirely by the schools, not only by particular subjects,” Minister Anies Baswedan said at a press conference in Jakarta on Friday. “The whole learning experience will be taken into account [in assessing students], along with the students’ conduct during school,” he added. The exams, which were previously the main determinant for whether a student moved up a grade or graduated, will continue to be administered to students in the sixth, ninth and 12th grades. Anies said students who did not pass the exams could retake them the following year, as the new regulation allows students to take the exam more than once. “We would like to change the national exam paradigm from being the sole students assessment tool to being a learning tool,” Anies said.
ASEAN
Metro Pacific tollway unit charts Indonesia foray Business World 29th Jan 2015
Fresh from its second overseas toll road venture, Metro Pacific Tollways Corp. (MPTC) is now looking to Indonesia and other Southeast Asian countries for investment opportunities. MPTC, the tollway subsidiary of infrastructure giant Metro Pacific Investments Corp., wants to buy into toll roads in Indonesia, and is scouting for more deals in Thailand and Vietnam, company president Ramoncito S. Fernandez said. MPTC has a 29.45% economic interest in Thai operator Don Muang Tollway Public Co. Ltd.
Consumers in Indonesia and Philippines Second Most Confident Globally e27 26th Jan 2015
Southeast Asian consumer confidence remained strong in Q4 2014, with Indonesia, the Philippines, Thailand and Vietnam ranked in the top 10 most optimistic countries globally, according to the Consumer Confidence Index released today by Nielsen. However, the economy and job security loomed as top concerns in the region, as consumers showed keen interest in changing spending habits to improve household savings.
Report: Non-BRICS drive emerging market logistics growth Supply Chain Digital 25th Jan 2015
Dynamism in ASEAN, GCC countries, Sub-Saharan Africa and the large, next-tier economies of Indonesia, Nigeria, Bangladesh, Mexico and Pakistan is offsetting mixed performance in the BRICS countries that powered emerging markets growth in recent years. The more balanced picture for growth is reflected in the 2015 Agility Emerging Markets Logistics Index, an annual data-driven ranking of 45 emerging economies accompanied by a separate survey of nearly 1,000 global logistics and supply chain executives.
Customs
Govt to seek lower duties on fishery products The Jakarta Post 29th Jan 2015
The Trade Ministry will request that some major trading partners lower import duties for several Indonesian fishery products in a bid to set more competitive prices to help the country achieve its target of tripling exports by 2019. Trade Minister Rachmat Gobel said Tuesday that his office would bring up this issue in a series of negotiations with Japan and the European Union (EU). The 7 percent import duty on Indonesian fishery products was a concern raised during recent bilateral talks between the trade minister and his Japanese counterpart Economic, Trade and Industry Minister Yoichi Miyazawa on an economic partnership agreement sealed by both countries.
Susi defends transshipment ban, set to issue guidelines The Jakarta Post 27th Jan 2015
Maritime Affairs and Fisheries Minister Susi Pudjiastuti has defended a ministerial regulation on the banning of transshipment, despite protests from the business community and the House of Representatives. While Ministerial Regulation No. 57/2014 aims to curb illegal, unreported and unregulated (IUU) fishing, the rules are a severe blow for local fishermen. The minister said she would issue guidelines that would allow local fishermen to keep practicing transshipment and bring their catches from fishing sites to a public landing port with verification authority. She emphasized that local business players would have to be willing to be verified and have their vessels recorded by the Maritime Affairs and Fisheries Ministry in exchange for being able to continue the practice.
RI bans some apples from US The Jakarta Post 27th Jan 2015
Indonesia banned the import of two types of apples from California, the US, on Monday, as they allegedly contained harmful Listeria bacteria. The apples — Gala and Granny Smith — distributed by Bidart Bros. of Bakersfield’s packing house, have triggered a Listeria outbreak across 11 states in the US that killed three and caused illness in 28 people.
RI calls for immediate implementation of Bali Package The Jakarta Post 25th Jan 2015
Indonesia is calling for the immediate implementation of the Bali Package, a trade agreement that came out of the Ninth Ministerial Conference of the World Trade Organization (WTO) in Bali in 2013, as a basis to settle the Doha Round of negotiations that have been deadlocked for around 14 years because of disagreements between developed and developing countries, a minister has said. “There is no need to be in a great hurry to lower our expectations. We are still trying to complete the Doha Round of negotiations by December 2015,” Trade Minister Rachmat Gobel said as quoted by Antara news agency after attending an informal ministerial meeting of the WTO in Davos, Switzerland, on Saturday.
Defense & Security
Govt revives deliberation on national security bill The Jakarta Post 27th Jan 2015
The Defense Ministry is pushing for the endorsement of the national security (Kamnas) bill, the deliberation of which has been postponed for years as a result of public rejection. Defense Minister Ryamizard Ryacudu officially submitted the proposal to House of Representatives Commission I overseeing defense, foreign affairs and informatics during a four-hour closed-door meeting on January 26, including two other priority bills related to the country’s defense sector: a bill on state secrecy and an amendment to the 2014 law on the Indonesian Military.
Indonesia gives current maritime action another look New Straits Times 27th Jan 2015
Indonesia may take another look at its tough maritime actions against foreign vessels that encroached its waters in terms of its implication to the environment. Indonesian Ambassador to Malaysia Herman Prayitno said the country is strict when it comes to protecting sea resources for its people. "We stress on sovereignty and it has nothing to do with expanding the (water) boundary. "If we choose to destroy vessels, it will be done fairly and in accordance with the law. "Whether the move will jeopardise the marine's ecosystem, it is something worth discussing further," he told reporters when met at Sutera Harbour Resort; adding sunken ships could become artificial reef.
US ready to provide military equipment to Indonesia Antara 23rd Jan 2015
The United States has expressed willingness to fulfill Indonesia's military equipment needs following the latter's plan to replace its old F-5E/F Tiger II jet fighters. "I am not familiar with the details of the F-5 replacement plan, but we are always ready and eager to discuss our future opportunity with our Indonesian counterparts," US Assistant Secretary of Defense for Asian and Pacific Security Affairs David B Shear said here on Friday. According to Shear, Indonesia and the US share comprehensive defense cooperation, including military exercises, sales, trade, and high-level defense meetings. The developing military relationship between Indonesia and the US has been based on the common values and interests of both countries, which were established long time ago, Shear added.
Economics
Car sales to rebound on stronger economy The Jakarta Post 29th Jan 2015
After last year’s decline, domestic car sales are likely to rebound this year driven by stronger economic growth and lower fuel prices, according to global research firm Frost & Sullivan. Car sales, an indicator of consumption in Southeast Asia’s biggest economy, fell slightly by 1.8 percent to 1.21 million last year, the first drop in five years, due to weakening sales of commercial vehicles. It is estimated sales will climb by 5 percent to 1.29 million this year on higher demand for passenger cars. That figure is higher than the 1.2 million forecast by car manufacturers grouped under the Association of the Indonesian Automotive Manufacturers (Gaikindo).
Investment in Indonesia Meets 2014 Target, But Outlook Dims This Year The Jakarta Globe 28th Jan 2015
Total investment in Indonesia exceeded the government’s 2014 target, thanks largely to increased foreign direct investment, but the outlook for this year remains dimmed against a gloomy global economy. According to data from Indonesia’s Investment Coordinating Board (BKPM), which does not include investment in the oil and gas or banking sector, total investment rose to Rp463.1 trillion ($37 billion), up 16 percent from 2013 and higher than the government’s forecast of Rp456.6 trillion.
Indonesia Says FDI Commitments in 2014 Up 13.5% Jakarta Globe 28th Jan 2015
Indonesia said it attracted 78.7 trillion rupiah ($6.3 billion) of direct foreign investment commitments in October-December, during which Joko Widodo became president, which is 0.5 percent more than it drew in the previous quarter. Fourth-quarter and full-year 2014 commitments were announced on Wednesday by the Investment Coordinating Board (BKPM). The board reports commitments of foreign direct investment (FDI) in rupiah terms. It said that for all of 2014, Indonesia received foreign investment commitments of 307 trillion rupiah, or 13.5 percent more than made in 2013. Last year’s pace of increase was considerably slower than the 22.4 percent increase in 2013.
Bank Indonesia Upbeat on Growth But Not All Agree The Jakarta Globe 28th Jan 2015
The central bank expects Indonesia’s economic growth to accelerate this year despite challenges ranging from lower commodity prices to higher interest rates, its governor said on Tuesday. Bank Indonesia Governor Agus Martowardojo said the domestic economy may expand by 5.8 percent this year, an increase from the bank’s estimate of last year’s growth of between 5.1 percent and 5.5 percent. Agus said that “structural reform” in 2015, including efforts by the government to enhance production of goods and add value to the nation’s natural resources, will help boost exports and reduce the current-account deficit. “Bank Indonesia, estimated the current-account deficit in 2015 will be in a range of [between] 2.5 percent [and] 3 percent [of gross domestic product],” Agus said at the Mandiri Investment Forum on Tuesday, which gathered investors, bankers and financial planners in Jakarta.
Indonesia needs strict monetary policy: Bank Indonesia ANTARA 28th Jan 2015
Indonesia is in need of a strict monetary policy because there is still a possibility of surging inflation and global economic pressure in 2015, Governor of Bank Indonesia (BI) Agus Martowardojo said. In a meeting in January, the board of governors of BI, the central bank of the country, decided to maintain the BI rate at 7.75 percent.
RI to encourage greater US investment: BKPM The Jakarta Post 28th Jan 2015
The Indonesian government through the Investment Coordinating Board (BKPM) will focus its attention on encouraging further US investment as a prime mover of the country’s economy in 2015. “We will focus on drawing investment from the US as well as other economies, such as China, Japan, South Korea and ASEAN member countries. A global economic projection has stated that Asia and the US will become prime movers of the world’s economy although China and Japan are still experiencing an economic slowdown,” BKPM head Franky Sibarani said as quoted by Antara news agency in a press conference in Jakarta on Wednesday. He said efforts to draw more investment from the US were crucial particularly after the world’s biggest economy fell out of the top-five list of Indonesia’s biggest investors in the fourth quarter of 2014.
Indonesian government maintains investment target at Rp519.5 trillion ANTARA 28th Jan 2015
The Indonesia Investment Coordinating Board (BKPM) has decided to maintain its investment target for 2015 at Rp519.5 trillion, an increase of around 14 percent as compared to the value recorded in the previous year. The domestic investment target is set at Rp175.8 trillion, while the foreign investment target is at Rp343.7 trillion, BKPM Chief Franky Sibarani said.
Indonesia’s Brodjonegoro Expects Rupiah Decline to Boost Exports Bloomberg 27th Jan 2015
The rupiah’s current level supports exports and helps narrow Indonesia’s current-account deficit, Finance Minister Bambang Brodjonegoro said, signaling the government is comfortable with the currency’s 3 percent drop since October. “12,500 is already a good rate to maintain our competitiveness,” Brodjonegoro said on January 27.
Indonesia to Enjoy Constructive Period This Year: ANZ Analysts The Jakarta Post 26th Jan 2015
Indonesia is forecast to enjoy a constructive year in 2015 as a result of fuel-price reductions and falling inflation, which are expected to persuade the central bank to cut its policy interest rate and thus trigger growth. According to Glenn Maguire, ANZ Chief Economist for South Asia, ASEAN and Pacific, 2015 would be a constructive year even though his office set the country’s economic growth projection below the maximum growth estimate set by the government and Bank Indonesia (BI), which is 5.8 percent.
US firms keen to invest and do more business in Indonesia The Jakarta Post 23rd Jan 2015
The current investment and trade environment in Indonesia, coupled with ongoing recovery in the economy at home, has boosted the optimism of US companies to do more business in Southeast Asia’s biggest economy, a high-ranking economic official says. US President Barack Obama declared on Wednesday the end of the financial crisis on American soil and pledged economic policies to benefit its people. The more positive outlook in the world’s biggest economy will push up demand for imported goods, as well as enhance the capability of its companies to invest overseas. Principal deputy assistant secretary for the Bureau of Economic and Business Affairs at the US Department of State, Kurt Tong, said that new areas of interest from the US business community would include aviation and transportation, infrastructure, particularly pertaining to energy, and manufacturing. “I think there is a lot of potential for growth. There are really many opportunities for US businesses to invest more in Indonesia to the benefit of Indonesian economic development and growth,” he said in a limited media interview on Thursday.
Energy
Chevron Returns Ciremai Mountain Geothermal to Indonesian Govt Jakarta Globe 29th Jan 2015
Chevron Geothermal Indonesia returned the Ciremai Mountain geothermal working area to the Indonesian government, a move that could push back the country’s ambition to take advantage of its huge geothermal potential. Based on the company’s evaluation, it was impossible for Chevron to continue the development of the Ciremai geothermal project, Chevron Pacific Indonesia corporate communications manager Doni Indrawan said on Wednesday. “Chevron did not continue the management of the Ciremai geothermal, and we returned it to the Indonesian government, so that they can consider conducting a re-tender,” Doni said. He did provide further details of the evaluation. The company had reported the decision to the West Java governor and the Ministry of Energy and Natural Resources.
Pertamina grappling with Indonesia's changing fuel demand Reuters 28th Jan 2015
Indonesian state energy company Pertamina expects to increase imports of RON92 "Pertamax" gasoline to meet a forecast surge in domestic demand for the fuel as it becomes more affordable, testing the limits of the former OPEC member's creaking energy infrastructure. Oil prices have fallen more than 60 percent since June, allowing Indonesia to scrap subsidies on lower-grade RON88 "Premium" gasoline and also reduce prices of other unsubsidised fuels including Pertamax.
Govt wants to boost domestic gas use The Jakarta Post 28th Jan 2015
The government expects output from new gas projects to be fully absorbed by domestic buyers as the country is striving to boost gas consumption to reduce dependency on traditional fuels. Indonesia is estimated to have a significant amount of gas resources, but it exports a lot of the liquefied natural gas (LNG) it produces because of better selling prices and the certainty of overseas buyers. Gas producers are legally required to reserve at least 25 percent of their output for the domestic market and domestic buyers are encouraged to absorb all of the gas produced here at market price, which is also beneficial for the producers, said the acting director general for oil and gas at the Energy and Mineral Resources Ministry, I Gusti Nyoman Wiratmadja.
5 gas contracts worth Rp 7.7t signed The Jakarta Post 27th Jan 2015
Five gas sales and purchase agreements (PJBG) with a state revenue potential of Rp 7.7 trillion (US$617 million) have been signed during the opening of International Indonesia Gas Conference and Exhibition (Indogas) in Jakarta on Tuesday. “It’s a major step for the upstream oil and gas sector in prioritizing domestic demands,” Upstream Oil and Gas Regulatory Special Task Force (SKKMigas) head Amien Sunaryadi said as quoted by Antara news agency in Jakarta on Tuesday. The Energy and Mineral Resources Ministry’s acting director general for oil and natural gas, I Gusti Nyoman Wiratmaja, and state oil and gas company PT Pertamina (Persero) director, Dwi Sutjipto, were present in the signing ceremony.
Obstacles likely to handicap govt’s five-year electricity targets The Jakarta Post 27th Jan 2015
While the government has taken several steps to accelerate its ambitious power-plant development plans, issues like land acquisition and lengthy explorations are poised to aggravate efforts to add 35,000 megawatts (MW) to Indonesia’s electricity grid in the next five years. Combined with around 7,000 MW in projects already in the pipeline, the government’s target currently exceeds 42,000 MW.
PLN eyes 10% power sales growth in challenging year The Jakarta Post 27th Jan 2015
State-owned electricity firm PT. PLN is seeing robust growth in its electricity sales this year, although consumption may be affected by the gloomy global and domestic economies. The company is targeting to book 218.8 terawatt hours (TWh) in electricity sales this year, a 10 percent increase compared to the total consumption of 198.6 TWh last year.
Gas agreements worth Rp7.7 trillion signed ANTARA 27th Jan 2015
Five gas sales and purchase agreements (PJBGs) with state revenue potential worth Rp7.7 trillion, or US$617 million, were signed during the opening of the International Indonesia Gas Conference & Exhibition (Indogas) on January 27. "It is a concrete move for the upstream oil and gas sector to prioritize the domestic needs," Head of Upstream Oil and Gas Regulatory Special Task Force (SKK Migas) Amien Sunaryadi said.
Indonesia thermal power market is expected to reach US$10.5 billion by 2018 WhaTech 27th Jan 2015
According to a report released by Ken Research, Indonesia's thermal power market is likely to reach US$10.5 Billion by 2018. Future growth of Indonesia's thermal power industry is expected to be led by coal and geothermal power projects.
Freeport to Start Divesting Stake in 2015 The Jakarta Post 26th Jan 2015
Mining giant Freeport McMoran will start divesting its stake in subsidiary PT. Freeport Indonesia in October as both companies have drawn up an agreement that will allow the copper giant to resume exports. A 2010 government regulation requires Freeport to divest some of its stake in its Indonesian subsidiary to the government, which now already owns nearly 9.4 percent of Freeport Indonesia.
Financial Services
E-Money Transactions to Rise to 2% of GDP in 2015 Jakarta Globe 29th Jan 2015
Bank Indonesia, the country’s central bank, is targeting the value of electronic money transactions to reach 2 percent of gross domestic product this year, up from 1.6 percent of GDP in 2014, on the back of the government’s cash transfer program...The government plans to transfer cash aid to more than 15.5 million people as part of its health care and education program through e-money and that should boost the card’s usage, said Enny V. Panggabean, the executive director of payment system policy and watch at Bank Indonesia, on Thursday. “Electronic money [transaction] grew 30 percent last year, while debit grew by 15 percent and 16 percent,” Enny said. She did not elaborate.
Indonesia: Reinsurance plan raises challenges for domestic sector Asia Insurance Review 29th Jan 2015
Managing the additional business that would be brought about by new reinsurance regulations will increase challenges for the local reinsurance sector, especially as Indonesian firms have limited sophistication in reserving and catastrophe modelling - a particular concern in a market with a relatively high likelihood of natural disasters, according to Fitch Ratings. The Financial Services Authority (Otoritas Jasa Keuangan or OJK) is proposing to increase the amount of insurance business placed with domestic reinsurers. The OJK proposals stipulate that Indonesian insurers must reinsure all of their motor, health, surety, credit, life and cargo business with domestic reinsurers. For other insurance business lines, a minimum of 25% will have to be allocated to domestic reinsurers, with the minimum level rising over the next few years.
Foreign Financial Institutions to Provide Better Access for Indonesian SMEs Hukum Online 29th Jan 2015
Generating fifty percent of total gross domestic income, Indonesia’s micro, small, and medium businesses (usaha mikro, kecil, dan menengah – “UMKM”) hold an important position in Indonesia’s economic prosperity. Unfortunately, UMKMs are not well supported by sufficient access to financial services, especially from foreign financial institutions. In this regard, Iskan Qolba Lubis, a member of the Budget Office (Badan Anggaran - Banggar) at the House of Representatives, is urging the government to require foreign financial institutions to participate in developing UMKMs. Mr. Lubis wants to see the Minister of Finance and Bank Indonesia (BI) issue policies that clearly set out obligations on foreign financial institutions to provide better access to financial services for UMKMs.
Fitch: Indonesia Reinsurance Plan Raises Questions for Sector Reuters 28th Jan 2015
Proposals by Indonesia's financial services authority (OJK) to increase the amount of insurance business placed with domestic reinsurers could potentially add to challenges for both the domestic insurance and reinsurance sectors, says Fitch Ratings. The OJK proposals stipulate that Indonesian insurers must reinsure all of their motor, health, surety, credit, life and cargo business with domestic reinsurers. For other insurance business lines, a minimum of 25% will have to be allocated to domestic reinsurers, with the minimum level rising over the next few years.
Indonesia: New insurance law aimed at consumer protection Asia Insurance Review 27th Jan 2015
New rules have just been implemented in insurance and microfinance that are expected to improve practices and protect the mostly financially illiterate customers in Southeast Asia's largest economy, according to the financial regulator. Only 18% people in Indonesia are aware of the terms and benefits of insurance and only 12% of Indonesians use insurance products and services, reported The Jakarta Post citing a survey by the Financial Services Authority (Otoritas Jasa Keuangan or OJK). Global reinsurer Swiss Re also noted that the insurance penetration in Indonesia only amounted to 1.77% of GDP in 2013, compared to 6.03% in Singapore and 4.8% in Malaysia.
BRI posts Rp 24.2t in net profits in 2014, gains customers Jakarta Post 27th Jan 2015
State-owned lender PT Bank Rakyat Indonesia (BRI) posted Rp 24.2 trillion (US$1.93 billion) in net profits last year, making it the country’s most profitable bank at present. BRI, the first bank to announce its 2014 full-year financial report, saw 14.35 percent growth in its net profits from Rp 21.16 trillion in 2013. Its outstanding loans reached Rp 490.91 trillion as of 2014, increased by 13.88 percent from Rp 430.62 trillion in 2013, according to BRI’s micro, small and medium enterprises (MSME) director Djarot Kusumayakti. Djarot said micro lending, which contributed to 31.25 percent or a majority portion of its total loans, grew 16 percent. The micro segment also saw 7.3 million customers as of last year, up from 6.5 million in 2013. “The bank only posted 1.12 percent of gross non-performing loans [NPLs] in micro lending next year, contributing to total NPLs of 1.69 percent. This means we have managed to maintain a healthy condition of loans,” Djarot said at a press conference at the bank’s headquarters on Monday.
OJK to regulate capital for financial heavyweights The Jakarta Post 27th Jan 2015
The Financial Services Authority (OJK) plans to set a minimum capital requirement for entities to control their financial groups, ensuring sustainability amid risks faced by their subsidiaries. The OJK is reviewing the best format to measure consolidated minimum capital requirements, according to OJK commissioner on banking supervision Nelson Tampubolon. “We hope to complete the review in the first half of this year,” Nelson said.
Mutual Fund Managers in Indonesia to Include Foreign Assets Soon Asean Investor 26th Jan 2015
Indonesian investment fund managers may be allowed to include foreign assets in their mutual funds (conventional and Islamic-based mutual funds), offered to investors, soon. Indonesia’s Financial Services Authority (Otoritas Jasa Keuangan, abbreviated OJK) is currently formulating new regulations – expected to be finalized by June 2015 – that would allow to include foreign assets in an attempt to reduce risks by diversifying mutual fund portfolios...OJK Deputy Commissioner Nurhaidi, who is in charge of monitoring Indonesia’s capital market, said that the institution is still discussing several details, such as the percentage of foreign assets that is allowed to be included in the portfolios.
Indonesia’s Major Banks Robust Against Risks and Shocks, Fitch Reports Jakarta Globe 26th Jan 2015
International rating agency Fitch said Indonesian lenders have a healthy buffer in the event of a downturn as they are backed by strong capitalization, paving the way for a stable outlook on the sector’s ratings. Fitch said in a statement on Monday that it conducted a stress test on nine largest lenders in Indonesia representing 65 percent of the banking system’s total assets. The outcome is that “Indonesian banks’ moderate risk profiles are backed by comfortable loss-absorption cushions, and they are well positioned to withstand a reasonably high degree of asset quality stress, owing to high core capital buffers and profitability,” the agency said. “Fitch maintains a stable outlook on the sector’s ratings,” it said. The agency said Indonesian lenders are also likely is able to comfortably cover higher credit costs should non-performing loans increases by three times current levels, thanks to well-covered pre-provision profit — the profit a lender will have left once it eventually incurs cash outflows caused by loan defaults. Fitch also praised the government’s plan to inject Rp 9 trillion in capital for the nation’s biggest lender, Bank Mandiri, which is said to underscore the strong capitalization in the banking sector.
New rules aim to protect customers: OJK The Jakarta Post 24th Jan 2015
New rules have just been implemented on microfinance and insurance that are expected to improve practices and protect the mostly financially illiterate customers in Southeast Asia’s largest economy. Widespread and unregistered microfinance institutions, which are able to reach the low-income bracket and could boost Indonesians’ access to banks, will be identified and registered as the new 2013 law on microfinance institutions recently came into effect. The law requires monitoring and regulatory functions for microfinance institutions that may total in the hundreds of thousands across the country. According to a study by the House of Representatives, if mismanaged, these institutions could pose risks to customers.
BNI to open branches in S. Korea, Myanmar Antara 23rd Jan 2015
PT Bank Negara Indonesia (BNI), the country's fourth largest bank in assets, said it would open branches in South Korea and Myanmar this year. "Proposal for the opening of the branches in South Korea was already submitted late last year and proposal for one in Myanmar was already made a year earlier," Gatot M. Suwondo, president director of the publicly traded state lender said here on Friday. Gatot said expansion to the two countries is included in the banks business plan as reported to the shareholders. "We focus expansion to the two countries. Later we will open another branch in Malaysia," he said.
AXA Indonesia, AXA Mandiri flex digital service muscles The Jakarta Post 23rd Jan 2015
Insurance firms AXA Indonesia and AXA Mandiri have said they are continuously improving their digital services for customers and agents in a bid to become the country’s top insurers. AXA Indonesia chief marketing officer Emmanuel Wehry said both his company and AXA Mandiri were optimistic about the future of their business prospects in light of their digital transformation, which has been going since 2012. Both companies believed the digital transformation — which enhances their services in mobile phone applications and websites — would provide simpler access for customers in line with changing lifestyle trends, Wehry said.
Food & Agriculture
Minimart Booze Ban to Be Enforced From Mid-April, Trade Ministry Says Jakarta Globe 28th Jan 2015
A new regulation which bans beers and pre-mixed drinks from being sold in the country’s ubiquitous minimarts will be enforced three months from mid-April, Trade Minister Rachmat Gobel said in a press conference on Wednesday. Gobel said according to the regulation he signed on Jan. 16, the government will ban the sale of beverages with an alcohol content up to 5 percent level, including beers and pre-mixed drinks, in mini-markets, such as Indomaret, Alfamart, Circle K and 7-11. The minimarts have been given a grace period of three months from when the regulation was signed, effectively outlawing the sales from April 16. “The trade ministry issued this regulation to ensure the future of our youth,” said Rachmat, whose family controls Gobel Group, a conglomerate with a variety of businesses spanning from manufacturing, logistics, trading, hospitality to industrial catering.
Indonesian government to build 10 new sugar factories ANTARA 28th Jan 2015
The agriculture ministry would build 10 new sugar factories to reduce imports of raw sugar and to create self sufficiency in the supply of the commodity. "We already have 350,000 hectares of lands in Kalimantan and Sulawesi, where we will open sugar plantations and built sugar mills," Agriculture Minister Amran Sulaiman said on January 28.
Jakarta to Work With Regulator, Market Operator to End Sales of Hazardous Items Jakarta Globe 27th Jan 2015
The Jakarta administration plans to sign an agreement with the Food and Drug Monitoring Agency, or BPOM, and city-run market operator PD Pasar Jaya to tackle the sale of products with hazardous ingredients. “If a vendor at a market is found selling items containing dangerous chemicals, they will be kicked out of the market,” Jakarta Governor Basuki Tjahaja Purnama said at City Hall on Tuesday, as quoted by Detik.com. “We also will withdraw a factory’s permit if it’s found to be using dangerous chemicals in the production process,” he added. Basuki said the move was part of city administration’s bid to curb the sale of food, beverages and cosmetics that contain hazardous or toxic chemicals.
Brazilian Meats Processor BRF Looks to Expand in Asia Reuters 23rd Jan 2015
Brazil's BRF SA, the world's biggest chicken exporter, aims to expand further into Asia by building on a recent Indonesian joint venture with more partnerships and acquisitions, Marcos Jank, BRF's Head of Corporate Affairs said. He singled out China, Indonesia, India, Malaysia and Thailand as potential markets.
Health & Life Sciences
As EU scraps aid, Indonesia introduces health insurance for the poor EurActiv 28th Jan 2015
The EU has turned its back on Indonesia's health sector. But the developing country, which is witnessing growing rates of tuberculosis and HIV/AIDS, is now counting on other solutions: a new health insurance program for the poor, and its own pharmaceutical company.
East Java declares state of emergency The Jakarta Post 26th Jan 2015
The East Java provincial administration has declared an extraordinary situation (KLB) status over an outbreak of dengue fever, which has hit 1,054 patents, 25 of whom have died, in 38 regencies and cities. The head of the Provincial Health Agency, Harsono, said that the KLB status was effective for 11 regions in the province. They include the regencies of Jombang, Banyuwangi, Probolinggo, Kediri, Sumenep, Pamekasan, Nganjuk, Trenggalek, Mojokerto and Madiun as well as Madiun city.
Minister Launches New Bid to Eliminate Stigma of Leprosy The Jakarta Post 26th Jan 2015
Health Minister Nila Farid Moeloek said people should have a greater understanding of the causes of leprosy, its early symptoms and how to obtain the necessary medication to cure the disease, so they will no longer stigmatize those with leprosy. Leprosy is one of eight neglected tropical diseases (NTDs) in Indonesia, including filariasis, framboesia, dengue, helminthiasis, schistosomiasis, rabies and taeniasis. In 2013, Indonesia ranked third in a list of countries with the highest number of leprosy sufferers, after India and Brazil.
Ad Companies Ask for Concessions over Cigarette Ads Ban TEMPO 26th Jan 2015
Chairperson of the Association of Indonesian Exterior Media Companies Nuke Mayasaphira has asked the Jakarta administration for the concession of the ban to put up cigarettes advertisement billboards. The request for the concession is done following the implementation of the Gubernatorial Regulation No.1 2015 on the Ban Cigarettes and Tobacco Products Advertisements on Exterior Media.
Indonesia Pharma Market Forecast to Grow in 2015 The Pharma Letter 26th Jan 2015
Today, Indonesia’s pharmaceutical market value is estimated at US$6.24 billion, reflecting pharmaceutical spend of US$26 per capita per annum, with national companies controlling 75% of the market share, according to a posting on the International Pharmaceutical Manufacturers Group’s website. Pharmaceutical sales per capita are estimated to go up to US$26.9 billion in 2015 from US$24.5 billion in 2014.
Malnutrition, stunted growth plague even fish-rich regions The Jakarta Post 24th Jan 2015
Despite abundant fish stocks, a major source of protein, children in many fish-rich regions still suffer from malnutrition. Data from the Health Ministry shows that fish-rich regions, such as East Nusa Tenggara (NTT) and Maluku, have some of the country’s highest rates of stunted growth. NTT, for example, has a stunting rate of 48 percent, meaning that 48 percent of children in the region suffer from stunted growth.
ICT
IDC Forecasts Smartphone Shipments to Indonesia Up 20% in 2015 The Jakarta Post 29th Jan 2015
Smartphone shipments to Indonesia are forecast to grow 20 percent this year as the country’s purchasing power continues to climb, leaving many with money to spend to make online purchases, according to information technology research firm International Data Corporation. IDC projected that smartphone shipments will reach nearly 30 million units this year, compared to 24.8 million units in 2014. “We believe this great increase in smartphone shipments will bring a positive effect to the growth of e-commerce in Indonesia,” said Lutfi Avianto, senior market analyst at IDC Indonesia, to reporters in Jakarta on Wednesday. Still, IDC forecast that total IT spending in Indonesia will decline 7 percent to $15.6 billion this year, compared to $16.8 billion it estimated for 2014.
Indonesia Online: A Guide to E-commerce ASEAN Briefing 28th Jan 2015
While currently, e-commerce only accounts for less than one percent (worth US$2 billion per year) of Indonesian retail spending, analysts believe that the country’s fast growing middle class and proliferation of smartphones will soon raise that share to eight percent (worth US$8 billion) in just a few years. If that scenario were to happen, then Indonesia’s e-commerce market would be the largest in Southeast Asia.
Indonesian president Jokowi bans foreign acquisitions in several tech sectors? Tech in Asia 27th Jan 2015
Indonesia’s president Joko Widodo (aka Jokowi) asked the nation’s head of creative economy Triawan Munaf to protect local online businesses from overseas acquisitions, reports CNN Indonesia. The mandate was announced as part of the president’s effort to maintain the growth of local online companies to better benefit Indonesia. The move came suddenly, as Jokowi only appointed Munaf to the position on Monday also. “The president saw a lot of sub-sector SMEs that were not considered. He always gave the example of online businesses as those that should be maintained, protected, and enlarged in Indonesia alone, and not rushed to be sold to foreigners,” Munaf told CNN Indonesia. “The president requested that online business developers not sell out, but instead become world-class players in their own right.” Triawan said he agrees with the president, who wants the archipelago’s online businesses to also increase state revenues.
Indonesia to Work With Singapore on E-Government Program The Jakarta Globe 27th Jan 2015
The Indonesian government plans to enlist the help of Singaporean authorities in implementing its e-government system, having already pledged to get the support of the South Korean and Australian governments. The three countries rank in the top of the 2014 United Nation e-Government Survey, while Indonesia came in at 105th.
Build a Plant, Phone Makers Told The Jakarta Globe 23rd Jan 2015
Manufacturers of mobile electronic devices will have to build a factory in Indonesia by the end of the year if they want to keep selling their products here, a senior government official said on Wednesday. “Indonesia must be a production base and not just a market,” said Ignatius Warsito, the Industry Ministry’s director of electronics and information technology industries. He cited a Trade Ministry regulation issued in 2012 that he claimed allowed the government to revoke companies’ permits to import mobile electronic devices unless they built a factory in the country before the end of 2015. The regulation makes no such requirement for importers. It only threatens revocation of their permits if they fail to import anything for six consecutive months, if they commit customs violations, or if they sell the devices direct to consumers or retailers and not through authorized distributors.
Infrastructure
Deepen financial system to support infrastructure development Jakarta Post 28th Jan 2015
Starting from 2015, the Indonesian government will focus on four strategic areas: maritime connectivity, infrastructure development, food security and energy security. The initiative to build and revamp infrastructure definitely requires lots of funding. The highest proportion of infrastructure funding will go to electricity (19.5 percent), followed by maritime (17.9 percent) and roads (16 percent). The government has predicted that during the next five years, the need for infrastructure financing will be around Rp 5.5 quadrillion or Rp 1.1 quadrillion per year. With limited government funding — government budgets (central and regional) will only cover around 50 percent and 19.3 percent will come from state-owned enterprises (SOEs) — the role of the private sector is significant (30.7 percent).
Spain, Italy to strengthen maritime cooperation with RI The Jakarta Post 28th Jan 2015
Spain and Italy have pledged to boost cooperation with Indonesia in the field of maritime infrastructure development and its related trade, after the ambassadors of both countries met with Coordinating Maritime Affairs Minister Indroyono Susilo in Jakarta on January 28. Spanish Ambassador to Indonesia Francisco Jose Viqueira Niel outlined the Spanish government’s cooperation plans with Indonesia in the sector, including a review of the Mina Jaya fishing boat construction program, which was carried out in the 1990s. Spain has become an effective partner with Indonesia in the field of shipbuilding.
President inaugurates groundbreaking of North Sumatra`s development projects ANTARA 27th Jan 2015
President Joko Widodo (Jokowi) inaugurated the groundbreaking of numerous development projects in North Sumatra on January 27. The projects include the development of Kuala Tanjung Port, Sei Mangkei Special Economic Zone, Kuala Tanjung industrial zone, aluminum diversification project, and Medan-Binjai toll road, among several others.
Adhi Karya expands into transportation business The Jakarta Post 27th Jan 2015
State-owned construction firm PT. Adhi Karya is expanding its business into the transportation sector by establishing a joint venture called PT. Angkasa Pura Adhilenka with three other state-owned firms: airport operator PT. Angkasa Pura II, electronics maker PT. LEN and train manufacturer PT. INKA.
Indonesia to Announce New Safety Ratings for Airlines Reuters 27th Jan 2015
Indonesia’s transport minister announced plans on Tuesday to introduce safety ratings for all airlines operating in the country starting as early as next month. Ignasius Jonan said airlines would be evaluated every three months and those that got poor safety ratings would be punished. He proposed mandatory daily health checks for flight crews and air traffic controllers, and that route permits be obtained four months in advance.
Five ports to be developed in 2015, says Pelindo The Jakarta Post 25th Jan 2015
State-owned seaport operator PT Pelabuhan Indonesia (Pelindo) I has said the construction projects of five of the 24 Indonesian ports to be developed and expanded under the President Joko “Jokowi” Widodo administration will be started in 2015. “The five ports are under the management of Pelindo I; thus, those ports will become our strategic programs this year,” Pelindo I spokesperson Eriansyah said on Sunday as quoted by Antara news agency in Pekanbaru. The five ports are Malahayati Port in Aceh Besar regency, Nanggroe Aceh Darussalam, Belawan Port in Medan, North Sumatra, Kuala Tanjung Port in Batubara regency in North Sumatra, Dumai Port in Dumai, Riau, and Batam Port in Batam, Riau Islands.
Mandiri Investment Forum 2015 to push economic growth ASEAN Investor 23rd Jan 2015
The annual Mandiri Investment Forum will host investors and businesspeople from Jan. 26 to 28 at the Mandiri Institute in Jakarta to discuss the prospects of investment in Indonesia as part of the efforts to bolster economic growth—the main theme of which is “Pushing Structural Reform”. Mandiri Institute chief executive director Destry Damayanti said the forum was expected to be attended by around 700 domestic investors and businesspeople as well as 150 foreign investors who are interested in investing in the country. On the first day, participants will visit a number of destinations related to three main economic sectors — property and retail, infrastructure and banking. On Tuesday, the main conference and panel discussions will be attended by President Joko “Jokowi” Widodo and several of his ministers, including Finance Minister Bambang Brodjonegoro and Transportation Minister Ignasius Jonan.
Indonesia to Form Infrastructure Bank to Attract Private Investment: Ministry Reuters 23rd Jan 2015
Indonesia's finance ministry said it plans to inject US$1.63 billion into PT. Sarana Multi Infrastruktur (SMI) and transform the state-owned financing firm into an infrastructure bank to help fund roads, railways and seaports with private backing. If approved by parliament, the move would mean a six-fold increase in SMI's capital to US$2.05 billion as part of President Joko Widodo's campaign to lift economic growth by improving Indonesia's creaky infrastructure.
Infrastructure developments to speed up growth Jakarta Post 23rd Jan 2015
Indonesia should focus on improving its infrastructure if it is to become a middle-income country, according to a leading economist. In a lecture at the Center for Strategic and International Studies (CSIS) this week, Wing Thye Woo, professor of economics at the University of California, listed the top priorities for Indonesia to accelerate economic growth and become a leader in the region. “Infrastructure overcomes the obstacles to trade and trade is the engine of growth,” Woo said. “In this turbulent global economy […] it is more important than ever for Indonesia to be able to generate internal ‘push’ forces to expand its economy. In other words, domestic reforms are exceedingly important.”
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