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President SBY with the participants of The 15th ASEAN Finance Ministers Meeting in BICC, Nusa Dua, Bali. The event was also attended by Secretary-General of ASEAN Surin Pitsuwan, President of Asian Development Bank (ADB) Haruhiko Kuroda, World Bank Managing Director Sri Mulyani, and Managing Director of the International Monetary Fund (IMF). See Page Two (Opinion).
RI,US Partners in Reducing Unemployment US companies set sights on infrastructure projects JAKARTA (TPP) – The United States believes that Indonesia is the right partner in reducing unemployment in both countries due to impressive economic growth rate, an official from the US Department of Commerce International Trade Administration said here last week.
“The economic opportunities in Indonesia are very strong because your country has a growth rate which is impressive and also the people who are eager to learn and work hard,” Francisco J. Sanchez, the Under Secretary of Commerce for International Trade, said here after opening the education exhibition in Jakarta, Antara reported. “No country in this world can be successful economically with-
out investing in education. And I am very optimistic because the commitment to education makes your country keep growing with the economy,” he said. He mentioned that the type of education appropriate to be applied was on entrepreneurship because by creating business, it would reduce unemployment. “I also believe that encouraging people to learn about entrepreneurship can create an envi-
ronment that attracts business. Learning from my country`s experience, we actively persuade investment from abroad because foreign investors can create million of jobs in the US,” he said. Furthermore, he also said that foreign investors in the US were responsible for 20 percent of exports and this might be important for Indonesia to create jobs. “I would support Indonesia to continue on this path of making
President to Sign Decree on Sunda Strait Bridge Project A presidential decree on the Sunda Strait bridge project is expected to be issued in April, Coordinating Minister for Economic Affairs Hatta Rajasa said. “It is hoped the decree will be finalized in April,” he said at the presidential office here last week after accompanying President Susilo Bambang Yudhoyono in a meeting with board members of the Indonesian Chamber of Commerce and Industry (Kadin). He said the draft decree had long been discussed and passed the stages of discussion. “If the draft is finished we will then harmonize it with the ministry of justice and then it will be
referred to the President. Unless corrections are needed the draft will be considered final,” he said. Public Works Minister Djoko Kirmanto said that ministers had been asked to discuss the draft for a week. “The instruction just now is that it must be done quickly. The Presidential decree among others regulates the executing authorities and methods for appointing the management later or investors,” he said. The construction of the bridge is scheduled to be started in 2014 and finished in less than 10 years.
“If the draft is finished we will then harmonize it with the ministry of justice and then it will be referred to the President. Unless corrections are needed the draft will be considered final.” Hatta Rajasa Coordinating Minister for Economic Affairs
“The instruction just now is that it must be done quickly. The Presidential decree among others regulates the executing authorities and methods for appointing the management later or investors.” Djoko Kirmanto Public Works Minister
OPINION
INTERVIEW
BUSINESS
INFRASTRUCTURE
No Time to Be Complacent
Mien Uno: Education and Social Manners
Telkom Sets Aside Rp 2 t for Buyback
Policy Certainty Needed to Boost Toll Road Investment
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The global economy is recovering, but the path to full recovery remains fraught with risks and vulnerability. One important lesson from that global financial crisis was that countries needed to act fast, and to act together. PAGE A2
Widely recognized as a master of etiquette and personal grooming, Mien Rachman Uno is also a successful businesswoman and a passionate educator.
PT Telkom currently holds 65 percent shares in the cellphone operator PT Telkomsel while the rest is held by SingTel.
Apart from the need to be fairer in awarding contract, the government needs to have a well-planned investment road map in order to provide investors with a clearer picture of business prospects therein.
the country an attractive place to do business,” he added. “The decline rate of unemployment in the US, which was reported at 8.8 percent in March, generated good economic system for the country as well as Indonesia, which sold a lot of products from the US.” United States firms are eying investments in Indonesian infrastructure such as railways and airports but are concerned about graft and a lack of protection of intellectual property rights, said the US official on a different occasion. “American companies are interested in supporting Indonesian transportation infrastructure needs, particularly in the railway
system,” Sanchez said in an interview with Reuters. The government plans this week to offer investors $32 billion worth of infrastructure projects, including a railway, toll road and power plant. Inadequate infrastructure is seen as both an investment opportunity and an obstacle to growth. Fitch Ratings last month cited the issue as a key risk to the chances of the country winning an investment grade rating in the next 12-18 months. Other sectors US investors are interested in are health care, agriculture and green energy, said Sanchez.
Foreign direct investment has picked up in Indonesia in the past year, but there has been far more investment from Asia than from US or European firms, with Japan having pledged more than $50 billion in infrastructure investment. Sanchez said further reforms on transparency were needed to attract more investment. “Corruption, protection of intellectual property rights and overall transparency, all of these will have more long-term impact and positive impact on the Indonesian economy,” he said, adding businesses also wanted an opportunity to have a say on proposed regulations and laws.
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A2 April 12, 2011
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Opinion
No Time to Be Complacent www.presidenri.go.id/Abror
Our economies are still facing many challenges: the continuing global imbalances, upward pressures on commodity prices, the rising price of oil, and the increasing severity and impact of natural disasters and climate change—which in their own right affect the supply of our precious commodities. By DR. Susilo Bambang Yudhoyono
T
he global economy is recovering, but the path to full recovery remains fraught with risks and vulnerability. One important lesson from that global financial crisis was that countries needed to act fast, and to act together. This is precisely what the G20 did by working together to reform the financial architecture, prevent protectionism and aiming for a strong, sustainable, balanced global economic growth. But even as the worst is behind us, some developed countries are still struggling to fix domestic economic challenges, and regain the growth momentum. This is a picture that is likely to continue in the short-term. In Asia, after a rigorous restructuring of its financial architecture since 1998, the region has become more resilient to global shocks. In fact, emerging and developing countries in Asia have become important engines for global growth. The economies of ASEAN and East Asia registered robust growth, and provided the expansion that was helpful for the global growth. This is of course no time to be complacent. Our economies are still facing many challenges: the continuing global imbalances, upward pressures on commodity prices, the rising price of oil, and the increasing severity and impact of natural disasters and climate change—which in their own right affect the supply of our precious commodities. Indeed, the recent global financial crisis and the recent commodity price increases, amplify the urgency for both policy coordination and global surveillance capacity building. Those challenges pose major threats to the global economic recovery, food and energy security, and achieving Millennium Development Goals. ASEAN should be better prepared, in responding to this challenge. The increasing linkage of ASEAN to the global economy has enhanced the potential spillover from external shocks into our region. The recent financial crisis has also taught us that global problems can be effectively addressed through, three separate but interconnected policy actions: First, strong and prudent policies of individual countries,
transfer payment and insurance. To lift our population out of poverty, we must provide affordable financial services. With broadened access, our population, including those living in poverty/ can unlock financial and small business opportunities. These opportunities will ultimately reduce poverty and inequality. Through greater inclusion and participation of people from all levels of economy in society, we may foster greater ideas and innovation. We can promote ASEAN as, an even more people-centered organization than before. Financial inclusion that addresses poverty must be innovative. It must not be business as usual, like regular financial services.
Second, coordinated regional responses, and Third, globally coordinated policy measures. In the face of these realities, I urge our ASEAN colleagues and partner economies to enhance our strategy, and renew our commitments towards a more sustainable growth and stability within our region. ASEAN needs to be more adaptive and innovative. On top of this, we in ASEAN must strengthen our framework, and become part of solutions to emerging global issues. There are a number of questions that we should consider: How much have we done, to mitigate the potential impact of future financial crisis? How far have we come, in ensuring the security of our food and energy supply? And, how much have we done collectively and individually, in responding to the challenge of climate change? At the same time, we also need to look closely on ASEAN’s vision and our collective aspiration for our regional grouping. We need to look at how do we develop strong national and regional economies with strong, sustainable, balanced and inclusive growth. We need to move faster towards a true ASEAN Community by 2015. This means, among others, strengthening ASEAN institutional frameworks and mechanisms. We need to improve the quality of life of all ASEAN peoples. This is not just about higher living standards, but also about inclusiveness, through ensuring better access to public services, social safety nets, Small and Medium Enterprises (SMEs) development and financial inclusion schemes. It is also about ensuring better transparency and accountability, as well as ensuring an increased sense of security. Indeed, it is about bringing ASEAN to the people. To realize this vision, there are three key priorities for ASEAN in 2011 and beyond. The first priority is ensuring significant progress and implementation of ASEAN community. For ASEAN Finance Ministers, this implies building on progress in financial services liberalization, capital market development and management of capital flows. This also means continued cooperation in customs initiatives, especially on the strategic plan for customs development, and the implementation of the ASEAN Single Window. Another challenge is to address any tax related impediments to integration, and ensure
No matter what is the level of development, each ASEAN economy has a stake in the success of the other. Our common future and shared interests bind us together like no other time before.
that the regional dialog on this issue will produce concrete recommendations and action. The second priority is that, ASEAN needs to be more cohesive and competitive, to maintain its role as a driver for East Asia wide regionalism and architecture. In this context, post East Asian financial crisis of 1997 and 1998, Finance Ministers and Central Bank Governors have already put in place an ASEAN plus Three mechanism on macro economic policy coordination and surveillance, bilateral swap agreements, and a regional reserves pooling scheme under the Chiang Mai Initiative. Finance Ministers and Central Bank Governors need to continue these regional efforts, to ensure that these schemes can be operational and implemented, and continue to be linked to international schemes. And the third priority is, for ASEAN to contribute to the global agreements and governance. We in ASEAN should strengthen our engagement with emerging global forums, such as the G20. As a premier forum for global economic cooperation, the G20 has been able to provide collective responses and initiatives, to mitigate impacts of the latest financial crisis, as well as to build confidence towards global economic recovery. In addition, through G20 forum, we managed to guide the reform process of Internation-
al Financial Institutions. The increasing involvement of ASEAN in the international forums should be aimed not only to foster regional economic and financial growth, but also to encourage investment in the region, and to improve our resilience against possible future crises. We will need to work closer together to manage the world economy, so that it can meet our needs, and also the global needs. Essentially, we are talking about regional and global partnerships. This effort is in fact, in line with the mandate given by the leaders to the ASEAN Finance Ministers, to sustain the recovery and restore growth. This can be done by way of implementing appropriate macro- economic policies, which is supported by structural reforms. We need to give a particular emphasis, on enhancing the stability of our financial markets. We need to ensure that, our discussions will contribute to sustaining the global recovery in a post-crisis world. Moreover, we also need to ensure they will lead to the prospects for, an effective economic policy cooperation and coordination. These are all momentous challenges for all of us, but we are up to meet them in a variety of ways. ASEAN can take the lead in resolving problems in our own backyard. ASEAN nations can serve as the “agent of change,” that drives
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progress and development in many areas of cooperation within the region, be it financial cooperation, food security, energy security, inclusiveness, or equitable growth. ASEAN can also serve as a building block for global growth, and also for a more effective global governance. Without the growth of dynamic regionalism in all parts of the world, there can be no globalism. This is why the key theme for ASEAN this year is, “ASEAN Community in a Global Community of Nations”. Financial cooperation must touch on the issue of development, in particular when addressing the development gap between and within ASEAN economies. If we do not deal with this issue, then we run the risk of a two or even threetier ASEAN. We therefore need to focus our structural policies and reforms, as well as developing economic corridors, to enhance national and regional connectivity and regional infra- structure development. There is already an ASEAN Connectivity Master Plan, and I do hope that the plan will ensure not just land-based regional connectivity, but also maritime-based regional connectivity. On our part, Indonesia is currently finalizing our own Master Plan for accelerating economic development and economic cor-
ridors. There will be six economic corridors in various regions of Indonesia, and in each corridors there will be growth areas. The vision of the master plan is for Indonesia to be locally integrated and globally connected. Progress is also visible in the implementation of the ASEAN Infrastructure Fund, with a view to narrowing the infrastructure development gaps in ASEAN. We must continue our efforts to increase the capacity of the fund, to meet pressing development demands in the region. Since 2003, our cooperative actions in the financial sector have led to notable gains in the areas of financial services liberalization, capital market development, and capital account liberalization. The ultimate goal of our cooperation, including in the finance sector, is to promote greater stability and prosperity of the ASEAN peoples. I believe that our collective efforts should contribute to our ability in addressing poverty—one of the most pressing issues in the region. The situation cannot be ignored: 1.4 billion people of the world population are still living with less than $1.25 per day, with around 118 million of them living in ASEAN countries. Thus, we need financial inclusion for all of our ASEAN citizens. People living in poverty, usually do not have affordable access to financial services such as savings, loans, and
The President Post
The article is opening remarks by the President of the Republic of Indonesia at the 15th ASEAN FINANCE MINISTERS’ MEETING in Bali, 8 April 2011.
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To complement financial inclusion program, the Government has also developed other poverty reduction programs: cash support to the very poor to compensate their decreasing purchasing power following the increase in oil price; and promoting “The National Program for Community Empowerment”. In short, there is a sea of opportunity for the finance sector of ASEAN countries to innovate growth, both on the global economic front, as well as on the rural poverty front. No matter what is the level of development, each ASEAN economy has a stake in the success of the other. Our common future and shared interests bind us together like no other time before.
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Since 2007, the government of Indonesia has introduced an innovative credit scheme called “Credit for the People” (KUR – Kredit Usaha Rakyat), which is executed through commercial banks, and 70% of which is guaranteed by the Government. Annually, the Government guarantees increases capital of the guarantee companies the amount of Rp 2 trillion approximately $200 million), or guaranteeing Rp 20 trillion of loans. This allows micro- enterprises lacking collaterals to access bank loans. The KUR credit program has also been expanded to target micro entrepreneurs, in need of smaller loans of less than Rp 20 million– approximately more than $2000. Remarkably, up to July 2010, more than three million small and medium enterprises have accessed this program. Of these, 96% are micro clients with an average loan size of Rp 4 million, or more than $400. This program has improved the status of approximately 400 thousand out of 4.1 million debtors, from unbankable to the entitled ones. More bankable persons mean more opportunity for development.
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April 12, 2011 A3
Interview MIEN UNO
W
Education and Social Manners
idely recognized as a master of etiquette and personal grooming, Mien Rachman Uno is also a successful businesswoman and a passionate educator. In 2001, she founded the Lembaga Pendidikan Duta Bangsa, an unique institute that focuses on “Personal Development”.
By Filly Sumayku
Duta Bangsa has several exclusive programs, namely Total Image Program, Leadership Excellence Program, Coaching, Counseling & Mentoring Skill Program, Problem Solving and Decision Making Program, Public Speaking Program, Public Relations Program, Excellent Service Program, and Master of Ceremony Program. There is also Customized Training Program that is designed exclusively to develop corporate culture. Mien Uno has received many awards, namely Public Figure 1990, Top Executive Indonesia 1992-93, Image of Indonesian Women 1994, Indonesia Women of The Year 1995, Citra Abadi Pembangunan Nasional 1996, Globe Asia 99 Most Powerful Women and Permata Pertiwi 2008. Born in Indramayu on May 1941, Mien Uno lives in Jakarta and has four grandchildren from her two sons, Sandiaga R. Uno, one of Indonesia’s top young businessmen, and Indra C. Uno, a scientist. Mien believes that the quality of a person is not determined by outer beauty but by their brain power and personality.
My hope is that Indonesia can reinstate the education discipline that it implemented during the 50s which emphasized ethics and not the end that justifies the means because of pragmatism. The following are excerpts from an interview in which she discusses her passion for education. As a successful educator, what is the biggest motivation that you can give to other Indonesian educators? The biggest motivation I can give is the joy and happiness that I feel when I see positive changes in my students. Nothing can compare to the joy I feel when I see my students gain their success and fulfill their dreams. What innovation or new target does Duta Bangsa wish to accomplish? Duta Bangsa’s target is to teach
25,000 students over the next five years. The students are taught to have good manners so that they can make their country proud for having them as ambassadors. In general, what do you think is still lacking in Indonesia’s education sector? One of the effects of the New Order regime is the emphasis on pragmatism, that the end justifies the means. As a result, materialism becomes a goal. A simple example of this: Allowing students to cheat during examination so
that they can pass. There is also the corruption mentality to amass wealth. What’s lacking is ethics that should be taught since elementary school. This should also be complemented with an effort to return to past education method with the existence of vocational schools such as STP, STM, Middle School of Agriculture. How important is it for university students to study overseas? To me it seems they are going abroad not only to pursue good education but also to avoid competition to enter universities through unhealthy ways and bribery.
In the end, the high costs spent to study overseas are almost the same as the amount spent to enter domestic private universities amid thriving corruption, collusion and nepotism practices. Anyway, there aren’t that many good learning institutions in the country. What is your biggest hope for Indonesia’s education sector? My hope is that Indonesia can reinstate the education discipline that it implemented during the 50s which emphasized ethics and not the end that justifies the means because of pragmatism. I hope the number of vocational schools like SGB, SGA, SKKA
and others can be increased so that students can quickly enter the job market. I also hope that the government can set a higher salary level for employees who graduated from vocational schools rather than those who graduated from general high schools and universities who seemed to only go after titles and prestige. Is there anything else that you wish to accomplish in the education sector? To produce Indonesian people with impressive personalities, highly intelligent and at the same time can display good manners.
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A4 April 12, 2011
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The Economy ECONOMIC UPDATES Indonesia’s Development Master Plan to be Confirmed
President Susilo Bambang Yudhoyono
“We have a big opportunity to develop the economy sector in the next 5-10 years subject to clear direction, concept and strategy,”
Industry Asks for 50 Percent Power Discount
RI’s Forex Reserves Reach $102.02 billion
Businessmen have asked for a 40 – 50 percent discount on electricity usage at night. “We need additional investments to move the work capacity from the peak burden to the evening,” Indonesian Textile Association chairman Ade Sudrajat, said yesterday. This request was in response to state electricity company PT PLN offering a 20 percent discount for companies to shift their electricity usage to the evening.
Bank Indonesia Governor Darmin Nasution optimistic that the economy will continue to pick up and the economic growth will become increasingly open as it is now one step away from an investment grade. www.infokorupsi.com
President Susilo Bambang Yudhoyono said that in a short time, the government will confirm Indonesia’s Development Master Plan, which is currently being completed. “The master plan will become a strategic document,” said the President in a speech at the opening of the plenary session of a ministerial meeting at the Presidential Palace, last month. Yudhoyono said that the formulation of the master plan went through a long process, following meetings between ministers, involving the central and the regional governments, represented by governors and regional House of Representatives leaders. Furthermore, a special working meeting with state-owned enterprises and private companies will be organised. “We have a big opportunity to develop the economy sector in the next 5-10 years subject to clear direction, concept and strategy,” he said.
BPS: Deflation in March
Indonesia’s foreign exchange reserves in the year ended March 10 rose to US$102.02 billion on the back of the robust domestic economy, Bank Indonesia Governor Darmin Nasution said. “I am optimistic that the economy will continue to pick up and the economic growth will become increasingly open as we are now one step away from an investment grade,” he said when opening a national coordination meeting of regional inflation control teams here on last month. Darmin said the heavy challenge that might lie ahead would
be inflationary pressure particularly that caused by rising commodity prices and that intensive efforts must be made to deal with it. “The inflationary pressure caused by disruption of food supply will remain high. Unless the problem is dealt with it can raise commodity prices,” he said. As the inflationary pressure was very much influenced by disruption of food supply it could not be dealt with merely by means of monetary policy but also comprehensive policy involving relevant parties, he said.
Besides adding the machine capacity at night, businessmen must also pay extra for the workers. The additional investment must provide returns in 3-4 years, said Ade. “If the discount for night electricity usage is only 20 percent, that’s not appealing,” he said. PLN’s business division head, Benny Marbun, said the company was ready to offer a 50 percent discount, but it would be calculated from the additional electricity burden outside peak-hour usage, Tempo reported.
Bank Indonesia Governor Darmin Nasution
Central Bureau of Statistics chief Rusman Heriawan said that deflation occurred last March marked by price decreases in almost all staple food commodities, especially rice. Eggs were the only commodity with a price increase. Rusman Heriawan “The price of rice decreased by three percent, so that’s good,” Rusman said before attending a cabinet meeting at the president’s office last month. Rusman mentioned that the figure ranged from 0.1 to 0.2 percent. Last February, the BPS said the inflation rate was 0.13 percent. Deputy Trade Minister Mahendra Siregar said that lower rice prices were helped by last month’s import supply. Abundant food stock is expected in the next harvest season. The government said it was satisfied because food materials contributed 13–14 percent to last year’s inflation rate.
Tax Holiday Postponed Again The government’s plan to provide tax incentives, intended to start early this year, has been postponed for a second time. Investment Coordinating Board (BKPM) chairman Gita Wirjawan, said that the incentive would be implemented in the third Gita Wirjawan quarter this year. “The draft is at the Finance Ministry and it will be discussed with related parties,” he said last month. The BKPM and the finance minister recommended two investment projects for tax breaks on Korea’s Pohang Steel and Iron Company (Posco) in PT Krakatau Steel, and a joint venture for the Balongan refinery. In addition to the large scale, both projects are considered pioneering in the upstream industry and will employ a high number of workers. Posco started to build its factory this year and will start production in 2013.
BI Focuses on Term Deposits Bank Indonesia plans to reduce Bank Indonesia Certificates (SBI) and focus on term deposits. BI research and monetary policy director Perry Warjiyo said outstanding SBIs would continue to be reduced and long-term deposits would be encouraged. “I think we will focus on 6 and 9-month term deposits,” Perry said last month. The government is coordinating with Bank Indonesia to offer shortterm certificates of indebtedness (SPN). In addition to the 12-month SPN, the government has issued a three-month SPN.
TANJUNG PRIOK EXPANSION In May, government plans to expand the port by increasing its capacity of 1.9 million TEUs (twenty feet equivalent units) from the existing 4 million TEUs. The President Post/Nandi Nanti
PLN to Develop Wind-generated Power Until 2019, PLN will build 74 MW windgenerated power plant with investments valued at $222 million. State electricity company PT PLN will optimize wind power to be the energy source of power plants. This year, PLN is targeting alternative power development in three areas. “The areas are Singkil, Sumba,
and Sukabumi,” said Nasri Sebayang, PLN’s planning and technology director, in Jakarta last month. The new technology requires locations with at least 2–3 meters per second of wind speed as the energy source for wind-generated power plants (PLTB). The available wind potential with such speed is equivalent to 9.268 megawatts (MW) of electricity. In the near future, PLN will be
using PLTB in Sukabumi, West Java, the result of development by private producer Viron Energy. The power plant will be the first large-scale PLTB with a capacity up to 30 MW. “The approval will be ready this March,” said Nasri. The price for the wind-powered electricity is only Rp 820 per kilowatt hour, cheaper than oil fuel which is Rp 2,400 per kilowatt hour. Each construction of 1 MW PLBT requires $3 million in investment.
In the initial stages, PLN will test PLTB Sumba in East Nusa Tenggara Timur, and PLTB Singkil for six months. “If it is successful, it will be used as national production,” said Nasri. One power plant to be built will have 200 kW to 1 MW capacity. “It’s small, but we’ll build many.” Based on the electricity need in Sumba, PLN has targeted a PLTB with a total capacity of 10 MW.
“If it succeeds with a low wind speed, we will develop it in other areas, especially eastern Indonesia, where the wind potential is big,” said Nasri. Until 2019, PLN will build 74 MW wind-generated power plant with investments valued at $222 million. The wind power development has been impeded because high and stable speed is only available in certain areas. As such, high technology is required to develop low-speed wind.
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April 12, 2011 A5
The Economy RI’s per Capita Income 600 pct Up in Last 10 years www.lensaindonesia.com
The Indonesian government has been focusing on improving the social condition of the people by providing credits to them to develop their businesses. Coordinating Minister for Economic Affairs Hatta Rajasa said here last month per capita income in Indonesia has risen 600 percent in the last 10 years, noting that economic conditions had been much better these days. “Economic conditions are clearly better these days compared to 10 years ago when per capita income was no more than 500 US dollars,” Minister Rajasa said when visiting this Central Java town. Rajasa said that the current per capita income is 3,000 US dollars. There were comments from other countries 10 years ago that Indonesia would not be able to be a developed nation if the per capita income reached only 500 US dollars. With persistence and hard work
Coordinating Minister for Economic Affairs Hatta Rajasa: Indonesia`s economic growth is the third highest in the world.
to overcome all the hardship and difficulties during the economic crises of 1997-2000, Indonesia could eventually improve the economy. Even in the last global crises of 2008, Indonesia`s economy grew 4.5 percent. “Indonesia`s economic growth is the third highest in the world,” said Minister Rajasa, adding that
the poverty rate is now on a declining 7.1 percent rate, 13.1 percent in 2010, and 19.9 percent in 2009. Rajasa said that the Indonesian government has been focusing on improving the social condition of the people by providing credits to them to develop their businesses.
Govt to Maximize Use of New Energy The government is currently carrying out the construction of the second phase 10,000 MW power plant with most of its energy will come from geothermal and hydro-power. The government will maximize the use of new and renewable energy, especially geothermal, hydro-energy and bio-fuels, before deciding to use nuclear energy. Energy and Mineral Resources Ministry`s Director General for Renewable Energy and Energy Conservation Luluk Sumiarso said here last month that the use of nuclear energy would be the last option.
“But the last option does not mean ruling out nuclear. It will remain being prepared but we are now still maximizing the use of other new and renewable energy such as geothermal, hydro-power, and bio-fuels which have a big potential for development,” Luluk said. According to him, the plan to build nuclear power plants (PLTN) would continue to go ahead with the principle of conformity, readiness, and safety. “But the use of nuclear energy needs a political decision,” Luluk said. He also said the government was revising the rules of new and renewable energy utilization in the energy mix that was previously targeted at 17 percent to be 25 percent in 2025. “The revision of the energy mix
is made by including nuclear and non nuclear,” Luluk said. He said the government would also make every effort to speed up the utilization of the new and renewable energy. Therefore the government is currently carrying out the construction of the second phase 10,000 MW power plant with most of its energy will come from geothermal and hydropower. It is the target of the government that the geothermal capacity will increase by 2,000 MW in 2012 and rises to 5,000 MW in 2014 because the the country`s geothermal potential is 29,000 MW. Luluk said that aside from geothermal energy, his party would also review the development of bio-fuels.
RI’s Exports to Mideast Almost Double in 2010 Indonesia`s exports to the Middle East mainly consisted of crude palm oil, paper, textiles, rubber, electronic appliances and motor vehicles. Indonesia`s non-oil/non-gas exports to the Middle East almost doubled to $6.5 billion in 2010 from $3.4 billion in 2005, a Trade Ministry official said. The exports hit a record high of $7.2 billion in 2008, Director General of International Trade
Cooperation at the Trade Ministry Gusmardi Bustami said at a discussion organized by the Indonesian Chamber of Commerce and Industry (Kadin) for the Middle East Committee here last week. Indonesia`s non-oil/non-gas exports to the Middle East mostly went to United Arab Emirates, Saudi Arabia, Turkey, Egypt and Iran, he said. Non-oil/non-gas exports to United Arab Emirates rose from $1.2 billion in 2009 to $1.4 billion in 2010, Saudi Arabia from $956.2 million to $1.2 billion, Turkey from $678.4 million to $1 billion, Egypt from $708.8 million to
INCOME PER CAPITA
The government has targeted income per capita in the next five years to surpass the minimum level of $4,803 and Gross Domestic Product (GDP) at $1,206 billion. The President Post/Nandi Nanti
RI Signs 12 Comprehensive Economic Cooperation Agreements Indonesia has so far signed 12 comprehensive economic cooperation agreements with other countries aimed at increasing its foreign trade, a Trade Ministry official said. The model of the 12 economic cooperation agreements is different from one another, Director of Bilateral Cooperation of the Directorate General of International Trade at the Trade Ministry Pradnyawati said here last month.
The economic cooperation agreements were signed with Japan, Australia, India, Pakistan, Iran, Chile, Turkey, Egypt and South Korea, as well as with European Union and the European Free Trade Association (EFTA), she said. “One of the 12 cooperation agreements comes in the form of Economic Partnership Agreement (EPA) with Japan which began to take effect in July 2008,”
she said. Two of the cooperation agreements were in the form of Comprehensive Economic Partnership Agreement (CEPA), and two others Comprehensive Economic Cooperation Agreement (CECA), she said. The others came in the form of Free Trade Agreement (FTA) and Preferential Trade Agreement (PTA), she said. “Only one of the cooperation
agreements has not been signed, namely (comprehensive economic cooperation agreement) between Indonesia and European Union which is now under joint study group (JSG) status,” she said. She said the increasingly fiercer competition had prompted countries in the world to adopt more strategic steps in establishing economic cooperation including signing comprehensive economic cooperation agreements.
The Indonesia International Autoparts, Accessories, and Equipment Solution Event (INAPA) 2011 The exhibition followed by 603 construction companies from 21 countries and 8 international groups such as Indonesia, China, Taiwan, Thailand, Korea, Singapore, India, and Malaysia.
$855.7 million and Iran from $506.9 million to $639.3 million. Indonesia`s exports to the Middle East mainly consisted of crude palm oil, paper, textiles, rubber, electronic appliances and motor vehicles. Tanza D.J.U Warganegara, sales director of Sinarmas Pulp and Paper Products for the Middle East, Africa, India and Oceania, said the Middle East was also potential market for Indonesian products such as furniture, tires, food and beverages. www.hqworld.net
Burj Khalifa, Dubai, United Arab Emirates. Indonesia`s non-oil/non-gas exports to the Middle East mostly went to United Arab Emirates, Saudi Arabia, Turkey, Egypt and Iran.
Jakarta - INAPA 2011 was held at JIExpo, Kemayoran, Jakarta on 23-26 March. The exhibition supported by the Heavy Equipment Industry Association of Indonesia (ASPINDO), and Heavy Equipment Sole Agent Association of Indonesia (PAABI). The 3rd Edition of INAPA 2011 held together with INABIKE 2011 (Motorcyle/Bicyle, Parts and Accessories Exhibition), IIBT 2011 (Bus, Truck & Components Exhibition) and INATRONiCS 2011 (Auto Electronics Exhibition) is the Indonesia’s unparallel one-stop for the AUTOMOTIVE platform that can show the complete convergence of technology & products through value chain. The exhibition opened by the Directorate General of Industry Leading Technology-Based High, Budi Darmadi, representing
the Minister of Industry, MS Hidayat. “This is the third year to introduce nation’s work with international quality. And this year has smashed the previous record with more investment coming into Indonesia,” said Budi Darmadi. The exhibition followed by 603 construction companies from 21 countries and 8 international groups such as Indonesia, China, Taiwan, Thailand, Korea, Singapore, India, and Malaysia. Such exhibition can be used as a venue to perform the capabilities of national automotive parts industry and also the development of local car body parts industry that has grown rapidly. “In order to protect local product, not enough by doing protection, but have to do development in infrastructure and raw material,” said Budi. Besides heavy vehicles, the exhibition also attended by some machine tools, equipment, and mining vehicles, trucks, heavy duty trailers, agriculture and forestry vehicles, tractors, hydraulic, crane, forklift, and trade equipment.
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ASEAN ASEAN ECONOMIC COMMUNITY
Trade: Towards a Single Integrated Market www.hminews.com
Presently, under the AEC (ASEAN Economic Community) concept, ASEAN’s goal is to transform itself into a single market and production base. It is aiming at the free flow of trade, services and investment and also a freer flow of capital and skilled labor. By Atmono Suryo OBJECTIVES The absence of regional cooperation during the Asian financial crisis of 1997/98 which started in Thailand had its adverse impact on the countries of the region. In view thereof ASEAN and the other countries in the region made it a point to intensify bilateral and regional trade and economic cooperation. This has led to the emergence not only of a large number of FTA (free trade agreements) and economic partnership arrangements but also the rise of Asian Regionalism. As the President of the Asian Development Bank Haruhiko Kuroda once stated, Asia today is an economic dynamo. But Asia’s success story is about more than rapid development, poverty reduction, and an ever-expanding middle class. It is also the emergence of labor-intensive industries and high-tech production of intermediate goods. As he rightly pointed out part of Asia’s success story is also the growing integration of the countries in the region. In one of her speeches in Jakarta, Dr Mari Elka Pangestu reminded us that in 2003, when Indonesia was the host for the
Total trade
$1,710.4 billion
Total exports
$879.14 billion
Total imports
$831.23 billion
Intra-ASEAN Exports
$242.5 billion
Intra-ASEAN imports
$215.6 billion
Intra-ASEAN Trade
26.8% of ASEAN total trade
FDI inflows
$60.2 billion
Intra-ASEAN FDI Inflows
$11.1 billion
ASEAN current basic indicators suggest that compared to other regional groupings of developing countries ASEAN is in a rather good position.
Source: ASEAN Secretariat
ASEAN recognized the need to strengthen the Southeast Asian countries competitive position in the East Asian region. ASEAN Summit, the notion of ASEAN Community came about. By 2003 most of the ASEAN countries had managed to come out of the crisis. One of the main reasons why the notion of the ASEAN Community came about was the rather new phenomena which appeared on the horizon. Two giant countries, China and India, grew in leaps and bounds. ASEAN felt that it could not afford to be pushed aside or squeezed between the two high-powered
countries. ASEAN recognized the need to strengthen the Southeast Asian countries competitive position in the East Asian region. Presently, under the AEC (ASEAN Economic Community) concept, ASEAN’s goal is to transform itself into a single market and production base. It is aiming at the free flow of trade, services and investment and also a freer flow of capital and skilled labor. CURRENT SITUATION ASEAN current basic indica-
tors suggest that compared to other regional groupings of developing countries ASEAN is in a rather good position. ASEAN Basic Indicators (2008) Total population Total land area Total GDP GDP growth
583.7 million 4.4 million sq.km $1,506.2 billion 4.4 per cent
ASEAN countries have been at the forefront, individually and collectively, in the rise of Asian regionalism. It is recognized by the Asian Development Bank that the “ASEAN framework provides an advanced model of international cooperation and a framework for exploring new integration strategies” It is not well-known that ASEAN’s position in the global economy has become quite significant: GDP 2008: In terms of economic size in the global economy, although still small, ASEAN takes 5th place as can be seen from the following statistics: EU 27
$18,142 billion
US
$14,265 billion
Japan
$4,924 billion
China
$4,402 billion
ASEAN India Korea
$1,507 billion $1,210 billion $947 billion
In terms of economic growth during 2008 ASEAN, takes third place after China and India but above Korea, Australia-New Zealand, EU and the US. With regard to GDP per capita in PPP dollars, however, ASEAN is still on the low side after Korea and China but higher than India. The economic goal of the ASEAN Economic Community is to turn ASEAN into a more dynamic and competitive regional grouping, and to become another growth center in the fast–moving and more integrated East Asian economy, along China, India and South Korea and, more importantly, to be linked and integrated to the global economy. The writer is former ambassador to the EU.
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Around Jababeka Entrepreneur-camp IEC 2011 Held at Jababeka E-Camp is the main characteristic of the IEC 2011, distinguishing it from other business competitions. E-Camp is held to train and teach the finalists on creating a good business plan in order to prepare the finalists for the next stage. By Filly Sumayku
The camp included workshops on how to create a business plan, procedures of presentation to investors, entrepreneurship sharing, venture capital items, networking, public speaking, and much more. After following the E-Camp, 20 best teams were required to revise their proposals to be selected into the top 10.
E-camp seeks to inspire and educate, so there were seminars with speakers who are competent in the field of entrepreneurship. ka industrial estate, especially in the production section. They observed the process of production from the very beginning to the packaging process until the products are ready to be marketed. The President Executive Club at Jababeka was the main venue for Entrepreneur-camp (E-camp) ITB Entrepreneurship Challenge (IEC) on 21-26 March 2011. IEC is an annual event organized by the Department of Economics of ITB. A series of events, the “Business Plan Competition” is not an ordinary competition. IEC has a noble vision and mission, which is to develop the minds of Indonesian entrepreneurs. It is a tangible contribution of ITB students to actively en-
courage the younger generation of Indonesians to give their best to their communities and beloved country. Its vision is to nurture, develop and boost the spirit of entrepreneurship among the Indonesian youths. The participants are 20 teams/finalists that passed the IEC 2011 selection, each consisting of three persons (total: 60 persons). The participants come from different provinces of Indonesia. During the event, participants were invited on a tour to Jababe-
E-Camp is the main characteristic of the IEC 2011, distinguishing it from other business competitions. E-Camp is held to train and teach the finalists on creating a good business plan in order to prepare the finalists for the next stage. “There are three main things that an entrepreneur must have, namely idea, a mature concept, and capital. E-Camp is to facilitate the best 20 teams to finalize their business idea to develop themselves,” said Renard Widarto, Chairman of the IEC in 2011.
President Lounge HR Gathering:
Unilever’s Way of Empowering HR Department On March 23, a number of Human Resources Managers gathered at the President Lounge, Menara Batavia, to listen to Josef Bataona, the Director of Human Resources of Unilever Indonesia, share his best practices. Bataona was recently awarded “Asia Best Employer Brand” by Employer Brand Institute London. It was the first event held by the President Lounge since it was launched some time in mid-2010. The President Lounge function room is also available for rental, said Melda Tan, the manager in charge. A virtual business office will soon be opened at 2nd floor. The transformation of HR The HR department reduced administration work from 40% to 20%, while increasing strategic work from 5% to 20%, with three strategic key elements: business partners who are aligned to strategic direction of business, expertise teams who do globally/ regionally aligned expertise programs, and shared services who do transactions and administration centrally. When the industry was busy with outsourcing, Jos conducted an experiment with “In-source Model” (internal employees acting as an external resource team). It became a model for Unilever around the world, and was genuinely created in Indonesia.
Beyond rupiah program HR plays a great role in creating excitement amongst employees by offering programs to energize them. When business was under pressure in 2005, a war game was conducted in cooperation with the Navy Academy. To encourage transformation, butterfly games were conducted in the head office, marked by many artificial butterflys on the lobby floor. Each employee had to take his or her favorite. As they enter their office floor, there is a reference on what the butterfly means based on its color as defined by a psychologist. It may not fully represent their personality, but it created discussions and excitement. Two weeks before and after Lebaran, when young mothers get headaches as babysitters and servants go on leave, the company hires professionals for day-care service, using all meeting rooms at the lobby floor. Transparency of business dynamic Unilever shows the company’s sales result on several TV sets in the office. This allows employees to know what is really happening in terms of the company’s busi-
ness. There was also a session with the Chairman on his Leadership Journey, in the format of a talk show, broadcasted to all factories and transcribed for further reading by those who miss the session. Crisis Management As Jos is the leader of the crisis management team, he shared some of his experiences during the big flood in Jakarta several years ago. As he usually exercises by climbing up 341 steps from the lobby floor to the 14th floor at the office, early in the morning on that fateful day he could see the flood coming. With the cooperation of three radio stations he broadcast himself his appeal to all employees to stay at home or return to home if they were already on their way to the office. During Japan’s earthquake and tsunami in mid-March, he was with 400 employees at Bali. With the cooperation of the hotel management, a step-by-step evacuation procedure was broadcasted at the hotel television set as well as by direct briefing before the gala dinner.
E-camp seeks to inspire and educate, so there were seminars with speakers who are competent in the field of entrepreneurship. They include Sarah Lacy (a woman journalist and writer of Entrepreneurship and Startup business books), Arfiana Rafnialdi (GRAK Training Consultant), CIE, Rizky Adiwilaga, M. Andy Zaky, Betti Alisjahbana, Rahardjo Ramelan, Harry G. Harris, Mrs Francis (Lecturer SBM-ITB), and others. “I want the participants to be more educated and learn to be ‘a real entrepreneur’, who not only obtain great benefits but also know how to create value for social life in the surrounding environment,” said Renard, when been asked about the output for participants. Renard hopes IEC will become even greater in the future. Therefore, it needs synergy among students, alumni and the Rectorate to make it a better event.
Jababeka Family Gathering 2011:
“1st Class All The Way” PT Jababeka Tbk held a Family Gathering for all employees at D’Warrior Jababeka Outbound, Cikarang, which lasted two days since March 13. About 3,000 people took part, which was divided into two sessions. Not only employees but also their families participated in the gathering. “Besides to celebrate the 22nd anniversary of Jababeka City, the gathering was intended as a tribute to the loyalties of employees and also as a sign of gratitude to their families. They indirectly supported the performance of our employees and helped them give their best for the progress of this company,” said Putri Fajar, GM Corporate HRD PT Jababeka Tbk. On the first day of the event, SD Darmono, as President Director of PT Jababeka Tbk, gave a speech and explained Jababeka’s vision and mission, which is “1st Class All The Way”. Employees were motivated to continue to put in practice the new slogan in everything, not only in ethics and morals but in products and services to every Jababeka customer.
Employees were motivated to continue to put in practice the new slogan in everything, not only in ethics and morals but in products and services to every Jababeka customer.
The next activity was games, as participants were asked to gather in groups. Apep, as Game Master, enlivened the event with some ice-breakers and games that been prepared earlier. There were several rides and booths that can be visited such as Yi-He Clinic for reflection and early detection using traditional methods from China and Takeshi’s Castle rides for kids. Though it was raining, all participants showed enthusiasm to finish all matches. After all games were done, participants and their
families enjoyed lunch accompanied by songs from “NOVELINOS” band. Bobby Tince and Putu Andara “Bembi” presided over the lucky draw and the Grand Lucky Draw. HAY Band, The Adly’s Band, and Eleven Band also participated in the event. ”We try to hold Jababeka Family Gathering every year, since the event is good to strengthen the bonds between employees and motivate them to become better individuals,” said Putri Fajar.
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Education President University Produces Future Great Leaders President University is committed to support and TO assist students to move actively in building character and exploring their potentials by implementing programs based on leadership in curricular and extracurricular activities.
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resident University provides a new method in shaping students’ character by way of orientation programs. When students enter President University, they are welcomed with orientation programs that train their leadership abilities. It’s the time when their creativity, discipline, sense of responsibility and communication skills are being honed. President University is committed to support and TO assist students to move actively in building character and exploring their potentials by implementing programs based on leadership in curricular and extracurricular activities. Those activities are expected to make the students have a local personality with global perspectives. One of the activities is attending seminars. Seminars are often held by President University, as the PUSC (President University Student Council) or PUSU (President University Student Union) provide practical knowledge to students about leadership. At the same time all students can build links and networks with speakers/sources or exceptional committees. One of the seminars held at President University had S. D. Darmono, founder of Jababeka, as the speaker who discussed marketing. S. D. Darmono freely mingled with students to discuss the technical development of net-
Four Indonesian students who took part in this year’s ASEAN Korea Future Cooperation Oriented Project: Youth Exchange Program 2011 at Seoul and Gang Won Do, Korea, February 15-21.
In early October 2010, Charity Club invited Kak Seto to share his knowledge on leadership in social life. Students were trained to become leaders by making sacrifices for the greater good of their immediate communities. works and connections. He also boosted the confidence of students by sharing his knowledge on “how to market yourself”. In early October 2010, Charity Club also invited Kak Seto to share his knowledge on leadership in social life. Students were trained to become leaders by making sacrifices for the greater good of their immediate communities. As future leaders of the nation, students must have a sincere sense of mutual assistance.
President University recently held a seminar with AIESEC with “Find the Diamond in You” as its theme. It discovered the potentials that exist within students. Charity Club also held a seminar, “Guide You to be President”, which was interactive and inspired and changed the mindset of students to become better persons. Many students were surprised to discover they actually had qualities they were not aware of having to become good leaders. One of the students who was in-
pressed by the seminars at President University is Ramsi Dharma Tjahjadia, a Management Major 2009 student. He is Minister of Communication at PUSC, Vice Chairman at Charity Club and Co-founder and Vice Chairman at Entrepreneurship. He is also a winner of the Green Peace Award 2010. His recent achievement is being a one of the four Indonesians who took part in this year’s ASEAN Korea Future Cooperation Oriented Project: Youth Exchange Program 2011 at Seoul
and Gang Won Do, Korea, February 15-21. ASEAN Korea Future Cooperation Oriented Project was initiated by the National Council of Youth Organization in Korea or NCYOK and was participated by 70 young and bright delegates from 10 ASEAN countries (Thailand, Myanmar, Cambodia, Laos, Vietnam, Philippines, Brunei, Singapore, Malaysia, and Indonesia) and host country Korea. Several activities were offered by NCYOK to the 70 delegates, such as formal and non-formal discussions on the role of youth in today’s globalization era, culture exchange programs and a food fair
in which all delegates were asked to exhibit their nation’s cuisines, a field trip to Buk Chon Ro Hanok Village, one of the ancient villages in Seoul, skiing lesson in Gang Won Do, and leadership games. Ramsi was the leader of the Indonesian team and performed impressively in every game. He won the title of best youth leader among the 70 delegates. When Ramsi was asked what he had learned from the ASEAN Korea Future Cooperation Oriented Project: Youth Exchange Program 2011, he humbly said, “Leadership and understanding towards culture diversity that inhabit the world!”
Redefining Higher Education:
Understanding the Demands of Business Industries in Indonesia Aligning the courses taught in universities with its possible applications on working environments seems to be the best way to solve the problem faced by today’s university graduates. Apart from that, internship programs and entrepreneurship courses must be at the core of all universities in Indonesia.
By Jhanghiz Syahrivar
T
he future of Indonesia and the direction of higher education are entwined. The biggest agent of change toward a better Indonesia is an educated population. Current trends show that an increasing percentage of our youth are venturing abroad in search of quality education. As stated by Brook W. Ross, Director of Education ACCESS Beyond, as many as 70,000 Indonesian students choose to study abroad every year, 7,000 of whom choose to go to the United States. All this is a result of our inability to provide the kind and quality of education they seek. The aforementioned issue is worsening by the fact that millions of university graduates are unemployed every year. “In 2009 and 2010, the numbers of fresh graduates of private and state universities who remain unemployed are approximately 600,000. The amount is potentially rising every year because around 30 percent of 200,000 students who graduate each year are not absorbed by the industry,” said Fasli Jalal, the Deputy Minister of Education. So what are the roots of the problem faced by university graduates in Indonesia? Further, Fasli Jalal stated that
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“Around 30 percent of 200,000 students who graduate each year are not absorbed by the industry.” Fasli Jalal Deputy Minister of Education
President University is the only private university in Indonesia which implements full English as its primary language and offers world-class curriculum aligned with worldwide business industries. the problem was not limited to the quality of graduates. Therefore, the emergence of educated unemployment was not merely because university graduates were incapable intellectually, rather that some study programs offered by private and state universities are saturated or even out-dated. Hence, they do not meet the demands of today’s industries or headhunters. It is a sad thing that not all universities in Indonesia fully inform their students pertaining to ca-
reer prospects of each study program. When there is a study program or a course in a university that appears to be vocational, students may think that it is a route to a particular line of work only to discover later that it is not appreciated nor required by employers. Conventional universities in Indonesia are also prone to churning out students with science qualifications who do not always quite match employers’ needs. Furthermore, in choosing a tertiary education, the majority of Indonesian
PUBLISHED BY PT Sarana Pratama Pengembangan Kota CEO & EDITOR IN CHIEF Ali Basyah Suryo CONTRIBUTORS Atmono Suryo Cyrillus Harinowo Hadiwerdoyo Thomas W. Shreve Jeannifer Filly Sumayku Eka Putri
EDITORIAL & CIRCULATION DEPARTMENT Srimay Noviani LAYOUT & DESIGN Mohamad Akmal SALES & MARKETING Detia Rais PHOTOGRAPHER Nandi Nanti
students are always driven by the ‘brand’ of a university – which may lead to a sense of prestige – instead of its actual ability to meeting the demands of job hunters. Aligning the courses taught in universities with its possible applications on working environments seems to be the best way to solve the problem faced by today’s university graduates. Apart from that, internship programs and entrepreneurship courses must be at the core of all universities in
Indonesia. Fortunately, this has been implemented by one of the top private universities in Indonesia, namely President University. President University is the only private university in Indonesia which implements full English as its primary language and offers world-class curriculum aligned with worldwide business industries. Established since 2001, President University has produced graduates (93% of its total graduates so far) who are currently working in public and private sectors, domestically and abroad. President University attracts bright students not only from Indonesia but also overseas, creat-
ing a multicultural and international atmosphere within (30% of its total students are from overseas). Supported by professional local and foreign lecturers and up-to-date academic and non-academic facilities, President University is committed to making learning in higher education fun to all students by synergizing theoretical and practical knowledge inside and outside classrooms. Interestingly, President University is one of the eight universities in Indonesia acknowledged by Nuffic NESO (Netherlands Education Support Offices) as having international-standard study programs. All in all, education is a prestigious and fruitful investment that it always rewarding in multiple ways. A strong and effective educational system results in greater performance of the students. Educational institutions that have an effective system and administration, and is willing to provide quality services, will always be able to attract brilliant and talented students. That is why the reformation of our tertiary education has to be done immediately in order to stop the vicious cycle of educated unemployment in the future. Jhanghiz Syahrivar is an Education Observer and an Asst. to Lecturer of Faculty of Economics, President University
Business Telkom Launches Telkom-3 Satellite
Antam Boosts 2011 Production PT Aneka Tambang (Antam) has targeted the production of 3.8 tons of gold and a 7.3-ton sales target this year. The sale includes processed gold from a third party. Antam’s gold production this year is predicted to be higher because Cibaliung has begun operation. Last year, the company earned 8.744 trillion in revenue. Antam CEO Alwin Syah Loebis, said gold production increase had in fact Alwin Syah Loebis lowered the sale volume. As a result, gold contribution to the company’s profit was only 27 percent last year. Antam plans to stop gold trade because the margin is low.
HIPPI proposes subsidized fuel price hike The Indonesian Indigenous Businessmen Association (HIPPI) has proposed that the government raise the prices of subsidized fuels rather than limiting their use. The limitation of subsidized fuel consumption would weaken the regional economy, HIPPI Secretary General Herman Heru Suprobo said in a press statement here on Monday. “The solution to the problem is raising the prices of subsidized fuels by 11 percent or Rp 500 a liter according to the results of a study conducted by the team in charge of assessing the limitation of subsidized fuels,” he said. The limitation of subsidized fuel consumption would disrupt the growth of regional economy, he said adding an increase in subsidized fuel consumption implied that the economy grew significantly. “This means that industries in regions badly need subsidized fuels. So if subsidized fuel consumption is restricted this will have an impact on the regional economy as a whole,” he said.
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Telkom Sets Aside Rp 2 t for Buyback
BUSINESS BRIEFS PT Telkom Indonesia will launch the Telkom-3 Satellite this year. PT Telkom’s corporation communications director Eddy Kurnia said the $200-million dollar satellite was being made at the ISSReshetney satellite factory in Russia. Eddy said the French company Thales Aleniaspace was also working on the sub-system. The satellite will be launched using the Proton M-breeze launcher. “The completion and the launch are scheduled for the end of 2011,” Eddy said in Jakarta last month.
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PT Telkom currently holds 65 percent shares in the cellphone operator PT Telkomsel while the rest is held by SingTel.
S
sition in Telkomsel. PT Telkom currently holds 65 percent shares in the cellphone operator PT Telkomsel while the rest is held by SingTel. Actually, since 2008 the idea has already been raised but PT Telkom has decided to only buy back shares held by the public. Mustafa said by holding bigger shares in Telkomsel, which now controls up to 55 percent of cellphone market in the country, PT Telkom would be able to contribute more revenue. “It is good if Telkom could control up to 100 percent. We will encourage them to negotiate it with SingTel,” he said.
tate telecommunications operator PT Telkom Tbk. has set aside around Rp 2 trillion to buy back its shares held by the
public. “We have prepared minimally Rp 2 trillion (for the buyback) but it still has yet to be approved by stakeholders,” the company`s president director Rinaldi Firmansyah said after the signing of cooperation agreement with 37 state-owned companies here last month.
Rinaldi said the Rp 2 trillion could buy around one percent of shares from totally around 47 percent held by the public. He said the management had a strong desire to conduct the buyback but the decision would be fully in the hands of the stakeholders. He said the buyback would only be carried out after being approved in the meeting of shareholders scheduled in May or July 2011. If it is approved implementation would be carried out within one or two years, he said.
PT Telkom Tbk. President Director Rinaldi Firmansyah. Since 2008 the idea has already been raised but PT Telkom has decided to only buy back shares held by the public.
In principle, he said, the buyback was intended for giving better income to shareholders and improving the company`s revenue. He said funds for the buyback were taken from the company`s income from productive activities. “The source of income comes from the company`s money supply now totalling around Rp8 trillion,” he said. Regarding the buyback of around 35 percent shares held by SingTel, Rinaldi said it was still a mere discourse. “It is still a discourse and has not yet been put in the company`s immediately plan,” he said.
He said it had not become a concrete plan included in the company`s budget plan.
“If funding is strong and positive for the company, by all means go ahead. I think their internal funds are sufficient for it.” Mustafa Abubakar State Enterprises Minister
Bid to buy back Singtel shares gets minister`s support A minister has expressed support to PT Telkom Tbk.`s effort to buy back its shares in Singapore Telecommunication (SingTel). “There has been discussion about it but formally it has not yet been conveyed to us,” State Enterprises Minister Mustafa Abubakar said at his office here last month. He said the idea of the stateowned telecommunication company to conduct a buyback was good as it could strengthen its po-
Telkom`s head of corporate communication Eddy Kurnia meanwhile said he shared the minister`s support for Telkom`s plant to conduct a buyback. “We support the minister as it is what Telkom and shareholders have been hoping,” he said. He said it would certainly still take time to realize it as it is now still a mere plan. “We still need to conduct a comprehensive and thorough internal study,” he said. Mustafa said he would refer the buyback decision to PT Telkom`s board of directors including the aspect of funding. “If funding is strong and positive for the company, by all means go ahead. I think their internal funds are sufficient for it,” he said.
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Business Major Banks Make Huge Gains
Bakrie Telecom’s Net Profit Drops 89 pct
State-owned Bank Tabungan Negara (BTN) last year saw its net profit grow 86.73 percent to Rp 915 billion from the year before on rising interest income.
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tate-owned Bank BNI said last month its net profit last year climbed 65 percent to Rp 4.10 trillion from a year earlier on rising net interest income and non-interest income. Net interest income rose to Rp 11.72 trillion from Rp 11.13 trillion and non-interest income jumped to Rp 7.06 trillion from Rp 4.29 trillion, BNI President Director Gatot M Suwondo said. “Profit before provision rose 22 percent to Rp 9.12 trillion from Rp 7.49 trillion. Provision fell 10 percent from Rp 4.051 trillion to Rp 3.63 trillion. So the net profit in 2010 reached Rp 4.10 trillion, up 65 percent from Rp 2.48 trillion in 2009,” he said. The increase in net profit raised
earning per share to Rp 266 from Rp 163, up 63 percent, he said. BTN’s profit up 86 pct State-owned Bank Tabungan Negara (BTN) last year saw its net profit grow 86.73 percent to Rp 915 billion from the year before on rising interest income. “The profit outstripped the target of Rp 725 billion. We hope our profit will hit a record high of Rp 1 trillion this year,” BTN President Director Iqbal Latanro said here last month. He said the bank`s total assets rose 17 percent to Rp 68.38 trillion from Rp 58.45 trillion and were expected to increase to Rp100 trillion this year. The amount of loans channeled last year grew 26.56 percent to Rp 51.55 trillion from Rp 40.73 tril-
lion, with the ratio of home loan to non-home loans standing at 90.1 percent to 9.9 percent, he said. BCA’s 2010 net profit up 24.6 pct Bank Central Asia (BCA) booked a net profit of Rp 8.5 trillion in 2010, which is 24.6 percent higher than in the previous year which is recorded at Rp 6.8 trillion. “BCA has been able to take advantage of Indonesia`s strong economic growth, supported by its sound balance sheet,” its president director, DE Setijoso, said here last month. In all, its credit portfolio grew 24.2 percent to Rp 153.9 trillion in 2010. With regard to its composition, consumer credits grew 31.9
percent to Rp 36.5 trillion in 2010 supported by housing and motor vehicle credits. The bank’s non-performing loan ratio reached 0.6 percent with reserves for non-performing loans reaching 394.5 percent. The capital adequacy ratio was recorded at 13.5 percent. BCA has expanded its electronic banking network and points of sales by adding 27 more branches, 848 ATMs and 18,379 electronic debit cards. BRI’s profit up 56 pct State-owned Bank Rakyat Indonesia Tbk (BRI) last year booked a net profit of Rp 11.47 trillion, up 56.98 percent from the year before. The profit hike was among others fueled by a 20 percent increase
in the amount of loans channeled, BRI President Director Sofyan Basir said here last month. With the performance, the bank maintained its predicate as the country`s largest bank in terms of making profit since 2005. He said the bank`s total assets rose 26.58 percent to Rp 398.393 trillion as per December 31, 2010 from Rp 314.746 trillion in the same period the year before. The bank’s capital adequacy ratio (CAR) increased to 13.76 percent in 2010 from 13.20 percent in 2009. Meanwhile, return on asset (ROA) and return on equity (ROE) respectively rose to 4.64 percent and 43.83 percent in 2010 from 3.73 percent and 35.22 percent in 2009.
BTEL President Director Anindya Bakrie
Publicly-listed telecommunications operator PT Bakrie Telecom Tbk (BTEL) said its net profit last year plummeted 89.79 percent to Rp 10 billion from Rp 98 billion a year earlier on surging interest payments and depreciation costs. “Despite the shortfall in net profit, BTEL repaid syndicated debts of US$145 million which are supposed to mature in 2012 to improve its capital structure,” BTEL President Director Anindya Bakrie said here last month. Income rose to Rp 3.77 trillion last year from Rp 3.435 trillion the year before, he said. He said corporate performance was getting better with the market share of BTEL`s income in the category of fixed wireless access (FWA) increasing to 55 percent last year and the performance of BTEL shares jumping 573 percent in the January 2009March 2011 period. However, Bakrie Telecom Tbk will invest Rp 5 trillion to develop its communications networks. Bakrie is set to not only provide voice services but also data service. The voice service currently dominates 70 percent of Bakrie Telecom revenues. “In five years, the proportion will be reversed, 30 percent will come from voice services and 70 percent from data,” said Anindya. Anindya added that the investment will be launched to achieve the vision of Bakrie Telecom Media and Technology of merging the businesses of telecommunication, media (Viva Group) and technology (BConn dan BNET), which is planned to take place until 2015. The investment will begin from 2011, and the funds will come from internal sources.
RESIDENTIAL PERMITS Jakarta has 49 Regional Regulations (Perda) governing the development of residential areas. To obtain a property permit in Jakarta could take 12 months to 3 years. This is a burden to developers as it is also expensive. The President Post/Nandi Nanti
Pertamina After Net Profit of Rp 17.9 trillion in 2012 State oil company PT Pertamina has set itself a target of securing a net profit of Rp 17.9 trillion in 2011, a Rp 200 billion increase than the Rp 17.7 trillion in the same year. President Director of Pertamina Karen Agustiawan told a meeting with Commission VI of the House of Representatives in Jakarta last month that she was after a net profit of Rp 20.9 trillion in 2013. In 2014, it will be raised to Rp 26.5 trillion and further to Rp 27.3 trillion in 2015. “Thus in the 2011-2015 period the company`s net profit had been projected to increase by an average of 11 percent per year,” she said, She also said that the net profit projection in 2014 was made considering the profit from the capac-
ity increase project of the Cilacap installation. The company`s oil and gas output in 2015 may reach the equivalent of 703 thousand barrels of oil per day, on the basis of the assumption the the price of oil has reached $80 per barrel and the exchange rate of Rp 9,000 per US dollar. She also said that in the 20112015 period Pertamina planned to invest Rp 265 trillion, up by 12 pct per year. “Some 70 pct of the investment is allocated for upstream and the other 18 pct for plant upgrading,” she added. She also said that in 2011 investment has been estimated at Rp 37.1 trillion, Rp 53.6 trillion in 2012, Rp 57 trillion in 2013, Rp 58.1 trillion in 2014, and Rp 59.1 trillion in 2015.
“The net profit projection in 2014 was made considering the profit from the capacity increase project of the Cilacap installation.” Karen Agustiawan President Director of Pertamina
In the meantime, Pertamina is also planning to make an investment in four major projects in 2011 worth Rp 6.2 trillion. In the meeting with the House budgetary agency it was stated that the four projects will raise the equivalent of 140,598 of barrels of oil and gas production per day. The production included 66.388 barrels of oil per day and 430 million of cubic feet of gas per day (MMSCFD). The four projects is the West Madura Offshore, Jambi Merang, Malaysia, and Australia. Pertamina may get an income of Rp 14.96 trillion from the four projects, and a net profit of Rp 4.63 trillion. Initial production of the four projects will reach the equivalent of 100,421 barrels of oil per day.
The additional production from West Madura may reach the equivalent of 24,641 barrels of oil per day, Malaysia 5,123 barrels, Australia 445 barrels, and from Jambi Merang 9,968 barrels. Pertamina also had a pessimistic target scenario if the project undergoes a delay of the equivalent of 131,567 barrels of oil per day with an investment of Rp 5.62 trillion. The production will initially come from the equivalent of 100,421 barrels of oil per day, plus West Madura 2,195 barrels, and Jambi Merang 2,521 barrels. Pertamina also planned the drilling of 50 exploratory wells in four projects, 109 development wells, two dimension seismic surveys of 1,089 km, and three dimension 1.597 km2 seismic projects.
Garuda’s Profit Plunges 49 pct PT Garuda Indonesia Tbk said last month its net profit last year plunged 49 percent to Rp 515.5 billion from Rp 1 trillion a year earlier. “Garuda`s operating income in 2010 reached Rp 19.5 trillion, up 9.4 percent from Rp17.8 trillion in 2009,” Garuda Indonesia President Director Emirsyah Satar said last month. Overall, the operational activities of the company were on the increase last year as could be seen from a 30 percent increase in its fuel needs and the growing number of passengers to 13 million from 10.3 million, he said. “Last year, we bought 24 new planes (23 B737-800s and 1 A330-200). To operate them, we needed crew members while at the same time the utility of planes was still low,” he said. He said the company last year saw its availability seat kilometers (ASK) grow to 25.7 billion from 21.7 billion the year before. “The passenger margin (yield) in 2010 rose 13.7 percent to 8.6 cents US dollar from 7.5 cents US dollar in 2009,” he said. Garuda`s load factor last year reached 71.7 percent, down 1.5 percent compared to 73.1 percent in the previous year, with the on time performance (OTP) reaching 80.2 percent, he said. “In 2010 we also accomplished a debt restructuring program. In the past four years Garuda was able to slash its debts to $436 million from $868 million,” he said. Therefore, he added the national flag carrier had to spend $40 million to $50 million per year until 2016. Asked to comment on the targets of the company`s performance this year, he declined to elaborate because it was related to the regulation of the Capital Market and Financial Institutions Supervisory Board (Bapepam-LK). “Sorry, we cannot tell you about prediction. Under the regulation, we are unlikely to do so. We don`t want to influence the price of (Garuda) shares,” he said.
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April 12, 2011 B3
Investment Indocement to Increase Production Capacity If consumption continued to increase Indocement would also plan to build a new plant with a capacity of up to three million tons in Central Java worth between $450 million and $600 million.
P
T Indocement Tunggal Prakarsa Tbk. plans to increase investment to raise its production capacity by two million tons a year to 20.6 million tons, its finance director, Christian Kartawijaya, said here last month. He said at a public expose the company would add $140 million to its investment to increase its mills at its plant in Citereup, West Java, which are expected to start
operating in 2012 or 2013. “Meanwhile, our capacity for this year remains the same as that of 2010 namely 18.6 million tons a year,” he said. He said the plan was made based upon optimism that domestic demand for cement would continue to increase. He said the trend in the residential market was also predicted to be stronger that infrastructure or high-rise buildings.
Sinar Mas Goes into High Gear in West Kalimantan
“It is predicted the proportion of cement demand in bulk would be 25 to 30 percent higher following the implementation of a number of infrastructure projects,” he said.
come internal sources,” he said. Christian said based on the outlook for 2011 domestic demand is expected to grow around five to six percent in line with the growth of gross domestic product.
He said if consumption continued to increase Indocement would also plan to build a new plant with a capacity of up to three million tons in Central Java worth between $450 million and $600 million. The figures, he said, are made based upon investment estimates for ground field ($150 million per one million ton) and green field ($200 million per one million ton). “The funds are expected to
The company`s president director, Daniel Lavalle, meanwhile said in 2010 the company`s revenue reached Rp 11.138 trillion with a net profit of Rp 3,225 trillion. Its market share last year reached 30.9 percent. “Although there are a lot of challenges due to increasingly competitive markets Indocement has succeeded in increasing its market share to 30.9 percent in 2010 from 30.2 percent in the years before,” he said.
Oil palm plantation company Sinar Mas Group has extended its Tengkawang Tungkul (Shorea Macrophylla) planting area in an oil palm estate relating to environmental conservation efforts, the company said. The extension was aimed at conserving the West Kalimantan endemic tree, which is now almost extinct, Susanto, head of West Kalimantan Sinar Mas group representative office said here last month. “We let the low peat land and river border areas which are included in the oil palm development permit remain to be areas with a high conservation value. Then, we will plant the Tengkawang Tungkul and other forest plant species at the open area,” Susanto said. The Sinar Mas group in its oil palm development program
in Kapuas Hulu district, according to him, had assessed the land that has a high conservation value before starting its operations. Based on the land assessment, only around 65 to 75 percent of the land was cultivated, with the remaining 25-35 per cent used as a conservation area in accordance with the principles and criteria for sustainable palm oil, he said. “We neither use certain area for oil palm, which is according to local people are sacred places,” Susanto said. In addition, Susanto said the
conservation areas handling by PT Paramitra Internusa Pratama (PT PIP), a subsidiary of Sinar Mas Group, indicating its seriousness and responsible in maintaining the environment in the oil palm licensed areas. Citing an example, he said, PT PIP has conserved at least eight types of Nephentes sp or Tropical pitcher plants in Kapuas Hulu district. PT PIP also paid attention to the cultural identity of local communities such as, cemetery or shrine, including tembawang (the sacred forest). In the meantime, Nanga Seberuang Village chief, Andrew Barley, also welcomed the presence of oil palm plantations belonging to the Sinar Mas Group in his village, because it has given the community alternative employment other than as rubber growers.
Chinese Firm to Build Rp 5 t Power Plant in Sulawesi A Chinese company Toplich plans to build a hydro power plant in Enrekang subdistrict, South Sulawesi province, with a capacity of 200 megawatts, an investment official said. The company was expected to start constructing the first phase of the project in two months` time, Head of the Control and Supervision Section at the South Sulawesi Provincial
INDONESIA PALM OIL
The Indonesian government continues to convince the United States government that 1.5 to 2 million tonnes of crude palm oil (CPO) from Indonesia have been certified Roundtable on Sustainable Palm Oil (RSPO). The President Post/Nandi Nanti
Daewoo Plans to Erect Power Plant in Bantaeng South Korea`s leading business company Daewoo Logistic plans to build a power plant to help overcome the limited power supply in Bantaeng regency, South Sulawesi. The power plant will use the trunk and cob of corn as fuel, Regent of Bantaeng Nurdin Abdullah said here last month. He said the South Korean company had expressed its wish, and
in the nearest future some of the company`s executives will be coming to Bantaeng to see the potentials of the corn crops. “The date of their visit to the region had yet to be fixed,” the regent said and promised to give the necessary facilities to the investors operating in the regency 120 kilometers south of the provincial capital Makassar. He said that the power plants
will be built in several locations considered having the highest need of electricity. He pointed to the corn cob and capok seeds which have become an item for exports. The two commodities are exported to South Korea where it is made into compost fertilizer, media for raising mushroom, and as mixture for cattle feed.
Investment Coordinating Board (BKPMD) Sukarniaty Kondolele said here last month. “The project will cost an estimated Rp5 trillion. The company is in the process of completing an environmental impact analysis,” he said. The Chinese investment in the electricity sector represented more than a half of investment needed
to meet the district`s need for power supplies, he said. According to the estimate of investment needs, the district needed around Rp9 trillion in investment to be able to meet its power needs, he said. Part of the remaining Rp4 trillion was expected to come from a Norwegian company which planned to build a hydro power plant with a capacity of 100 mega-
watts at a cost of around Rp3 trillion, he said. Earlier, a Norwegian company through PT Sulawesi Hydro Power built a hydro power plant in Tangka Manipi area, South Sulawesi, to meet power needs in Gowa and Sinjai districts. The 10-megawatt capacity power plant was built at a cost of Rp 280 billion.
The President Post
B4 April 12, 2011
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Property Greater Jakarta Industrial Estate Market:
Strong Outlook for Industrial Land Sales in 2011 Industrial estates in Bekasi and Karawang & Purwakarta areas remained as the preferred location with over 90% of the total transactions in the reviewed quarter occurred in these areas, with the balance absorbed by estates in Serang and Tangerang.
With the relatively stable political situation of the country and sound economy condition, year 2010 saw the re-entry of foreign industrialists to the market. These foreign industrialists are expected to be the major demand generator in the short to medium terms. Overall, the market is projected to remain strong in year 2011.
G OVERVIEW
reater Jakarta’s industrial estate market showed a net take-up of over 130 ha during the fourth quarter, up about 16% over the third quarter. On an annual basis, the quarterly net demand growth was also very strong, increasing by over 3.5 times from that of the same quarter last year. With the above activities, the cumulative sales rate recovered from 69.7% in the previous quarter to 71.1%. Demand for SFBs & Warehouses for sale or for lease in the reviewed quarter also remained strong. Industrial estates in Bekasi and Karawang & Purwakarta areas remained as the preferred location with over 90% of the total transactions in the reviewed
quarter occurred in these areas, with the balance absorbed by estates in Serang and Tangerang. Similar to in the three quarters of the year, major demand in this quarter came from combination of foreign and local industrialists with several main business lines, including automotive and steel-related sectors. Supply Following the large additional supply from estates in Bekasi and Karawang areas in the previous quarters, this quarter also saw additional supply from estate in Bogor of about 7 ha only. In the short to medium terms, although in a slower rate, new supplies are still expected to enter the market. With the above additional supply, the total cumulative supply of industrial land in the Greater Jakarta area during
piah terms increased to about Rp 720,000 psm (+1.4% QoQ). In US$ terms, the average price increased to $80.2 psm (+0.8% QoQ).
Significant New Sales Transactions on 2010 Industrial Estate
Sqm (land)
Location
Industry
Surya Cipta
250,000
Karawang
Concrete, Building materials & Packaging
Kota Bukit Indah
180,000
Purwakarta
Pharmaceuticals
KIIC
170,000
Karawang
Flavours & Fragrances, Automotive Parts
Lippo Cikarang IE
150,000
Bekasi
Printing
the reviewed quarter increased by 0.1% to about 8,632 ha. Price Due to lack of good stock and continuing strong demand, asking price of the industrial land continued to increase during the reviewed quarter. The estimated average achieved land price in Ru-
OUTLOOK With the relatively stable political situation of the country and sound economy condition, year 2010 saw the re-entry of foreign industrialists to the market. These foreign industrialists are expected to be the major demand generator in the short to medium terms. Overall, the market is projected to remain strong in year 2011. However, it is unlikely to reach the demand level of prior to the monetary crisis in 1997.
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The President Post
B6 April 12, 2011
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The Region East Asia Economic Crisis
Implications and Tasks Ahead One of the key issues facing Asia to strengthen its economy is the need to integrate the Asian economy. This is fully understood by ASEAN, which has committed itself to establish the ASEAN Community by 2015.
SHARE OF DEVELOPING COUNTRIES IN GLOBAL GDP
THE CRISIS OF 1997/98 AND 2008/9 Notwithstanding the fact that Asia was struck (almost in a row) by two financial crisis and being hit by a constant row of natural disasters the economies in the region remain steadfast, it continues to develop and grow. It shows that the region has acquired a significant degree of resilience coupled with the determination of the Asian people to move ahead. Globalization, which is reshaping the world, has its good sides as well as weaknesses. This is described in Joseph Stiglitz’s book “Globalization and Its Discontents”. The shortcomings are particularly in the financial sector, the most liberal sector of the global economy that causes the financial crisis, but trade is in a more orderly state. It was some ten years thereafter in 2008/09 when the second financial blow struck the East Asian economy. As happened before it came also out of the blue. And once again it started in the financial area but with had very far reaching impact and implications
in the area of trade. Asia was at that time in the midst of their fastmoving development, with China and India in the lead and the ASEAN economies on track with the two giant countries. It was the G20 which had to take command of the critical situation and it was an honor for Indonesia to be chosen as a member of the group and to participate at the critical Summit in Washington in October of 2008. THE RISE OF THE DEVELOPING COUNTRIES An important development in the global economy is that meanwhile an important shift has been developing in the world power structure. It becomes increasingly obvious that many developing countries have begun to increase their economic growth. For Asians it was good to hear that developing countries in other parts of the world admit that they are inspired by the countries in Asia or even led by the countries in Asia. Developing countries have been growing at a faster rate than the high-income countries. According to the World Bank, the share of developing countries in the global economy will grow from 33.5% in 2010 to 47.6 % in
60
In percent of GDP
Start of period
2010
2030
Low
High
40
66.4
52.4
49.1
40
U.S.
23.6
20.5
19.2
15.7
Other
42.8
31.9
29.9
24.4
Low & middle income
33.6
47.6
50.9
60
China
9.5
17.1
18.8
23.6
India
2.3
4.6
5.1
6.7
Other
21.9
25.9
27
29.7
30 20 10 0
China
Philippines Cambodia
Thailand
Vietnam
Indonesia
LAO PDR
Mongolia Timor-Leste
Source: National Household Income and Expenditure Surveys, and East Asia Poverty Database. Note: The start and end dates are: China (1989-2004), Philippines (1997-2006), Cambodia (2004-2007), Thailand (1998-2009), Vietnam (1998-2008), Indonesia (1999-2009), Lao PDR (1997-2008), Mongolia (2002-2007), Timor Leste (2001-2007).
Source: ASEAN Secretariat
EU 27
: US$
18,142 Billion
USA
: US$
14,265 Billion
Japan
: US$
4,924 Billion
China
: US$
4,402 Billion
ASEAN
: US$
1,507 Billion
India
: US$
1,210 Billion
R.O. Korea
: US$
947 Billion
Source: ASEAN Secretariat
2030. It is expected that China will become the largest economy of the world, replacing the United States. No doubt India will also become another power house in Asia and also South Korea. The developing countries are almost on an even stance with the high income countries. With the share of developing countries nearing that of the high-income countries, important shifts will develop in the global
End of period
50
2030 (current prices)
(2010 prices) High income
By Atmono Suryo
CHANGES IN GINI COEFFICIENTS
economy. It is still difficult at the present time to predict what the outcome will be. One development seems to be certain, namely that the historical shift from the West to the East will come true. East Asia will be the center of the global economy. In addition to China and India in Asia, another group of developing countries have also grown fast, namely the 10 ASEAN countries. In terms of economic size ASE-
AN as a group is already taking a respectable position in the global economy. ASEAN as a group takes up 5th place according to the list above. Its position and influence in the global economy has grown fast. THE TASKS AHEAD A recent publication issued by the World Bank entitled “Securing the Present -Shaping the Future” gives us an idea how Asia will have to develop presently and in the coming 10 to 20 years. In securing the present situation Asia will not have an easy task. In addition to the problem of unemployment and poverty reduction East Asia will be confronted with a number of challenges, such as rising inflation, rising food and commodities prices, the problem of climate change
and rising inequalities which have their social-political impact. These challenges are no new issues. But what is perhaps important for Indonesia is to realize that Indonesia is not alone in facing these challenges. For example, the Indonesian community has to face the fact that the problem of rising inequalities happens in many countries in the world. This seems to be one of the weaknesses of globalization. The problem of imbalances is happening in many parts of the global economy and in many countries, including in Asia. SHAPING THE FUTURE In shaping the future Asia will no doubt have to face a multitude of challenges, internally and externally. With Asia on the rise in the global economy, togeth-
er with the other emerging countries in the world, it looks like Asia will have to play a key role in the global economy together with the main high income countries, particularly the United States and the European Union. The challenges facing the world are numerous and includes such issues as: • tackling the global imbalances • the restructuring of the financial architecture • the strengthening of global trade which is at present in a limbo • to cope with the food and energy security questions • climate change Internally, within Asia, there are also a multitude of pending issues in this gigantic part of the world. The key task ahead is the strengthening of the Asian economies. East Asia, including ASEAN, is called upon to play a leading role in the development of the global economy. One of the key issues facing Asia to strengthen its economy is the need to integrate the Asian economy. This is fully understood by ASEAN, which has committed itself to establish the ASEAN Community by 2015. This will be the first step to be followed presumably by the integration of the Asian economy, as recommended strongly by the Asian Development Bank. Indonesia should be well prepared to face these two integration issues.
The President Post
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April 12, 2011 B7
Technology IMULAI 3.0 15 Best Indonesia ICT-Based Start-ups IMULAI has concretely supported local entrepreneurs to realize their dreams and in marketing their products and concepts to foreign countries. By Filly Sumayku
T
he annual program IMULAI (Indonesia MULAI), Information and Communication Technology-based Business Innovation competition supported by Microsoft Indonesia and USAID recently announced its 15 winners at Balai Kartini, Jakarta. “We are proud to introduce the most innovative ICT-based companies from across the nation as the result of the Microsoft Indonesia–USAID highly competitive program IMULAI 3.0,” said Sutanto Hartono, CEO of Microsoft Indonesia. This program is part of the commitment of Microsoft Indonesia and USAID to develop Indonesia’s competitive, knowledgebased companies. “IMULAI demonstrates Microsoft Indonesia’s long-term commitment in nurturing and establishing a knowledge-based society and economic development. We continue to encourage local innovation and entrepreneurship,” Sutanto added. US Embassy Deputy Chief of Mission Ted Osius said that they’re striving to help local IT start-ups transform their innovative ideas into real business solutions. “We want to promote Indonesia as a leading global innovator,
which depends on an environment conducive to high-tech entrepreneurship.” It is one form of USAID’s investmentss in Indonesia’s future: in children and youth, in jobs and income for poor families, in sustaining natural resources and governance reform. The 15 winners, who were selected from the 50 top finalists, are: NyanyiYuk, NgaturDuit. com, Movreak, RBT Ads Network, Medihaste, Football Saga, VirtuTrade, Primagamaplus.com, ngomik, Rockto.com, SendokGarpu, Verishop, Inkuiri.com, and NoLimit. They are allowed to take part in
the three-day Start-up Bootcamp 7-9 April 2011, and the opportunity to present their proposals in front of investors in a pitching session on 9 April at Microsoft Indonesia office. Sastro Gozali, founder of SendokGarpu, a website that features reviews of restaurants and nightlife in Jakarta, stated that they’re really proud of being in the top 15 and getting the opportunity to participate in the Bootcamp at Crowne Plaza Hotel, Jakarta, on how to make better business plan presentations, financial forecasts, and business scenarios. “We need that knowledge and the chance to meet investors,” he said
Mobile Threats Double in Number Kaspersky Lab predicts an increase in the number of vulnerabilities found on mobile platforms, as well as an increase in the number of threats for Android and the continued use of short numbers by cybercriminals.
K
aspersky Lab data shows that the that cybercriminals actively exploit,” explains Denis number of malicious programs Maslennikov. targeting mobile devices has more than doubled between August 2009 From 2010 onwards, sending fee-based text and December 2010. In 2010, over messages ceased to be the sole illegal money65% more new threats targeting making scheme for virus writers developing threats mobiledeviceswere targeting different detected than in platforms. the previous year; Other unlawful The distribution of variants of and over 1,000 schemes such detected threats, by platform variants from 153 as redirecting different families mobile Internet Series1, SGold, of mobile threats banking users 4, 0.38% Series1, AndroidOS, were included in to phishing sites Series1, MSIL, 15, 1.41% 4, 0.38% Kaspersky Lab’s and stealing Series1, Windows Series1, IphoneOS, databases by the passwordssentby Mobile, 54, 5.08% 2, 0.19% end of 2010. banks to mobile Series1, Python, 60, 5.64% phones were As noted by also used. Mobile Denis Maslennikov, threats have a Senior Malware become more Analyst at complex than Kaspersky Lab and ever. According author of Mobile to Denis Malware Evolution: M a s l e n n i ko v, An Overview, Part 4, “This means that Series1, Symbian, 311, 29.26% “The list of platforms attacks launched Series1, J2ME, 613, 57.67% targeted by malicious by mobile threats programs expanded have reached a considerably in 2010.” completely new level.” The growing popularity of the Android platform Kaspersky Lab predicts has inevitably drawn the cyber an increase in the number criminals’ attention: in August 2010, the of vulnerabilities found on mobile first malicious program targeting Android was platforms, as well as an increase in the number detected, and since then, that number has reached of threats for Android and the continued use of short 15 programs from a total of 7 families. The first threats numbers by cybercriminals. targeting Apple’s iPhone OS also appeared during this last reporting period, but infected only devices About Kaspersky Lab that had been jail broken in order to install thirdKaspersky Lab is the largest antivirus company party games and other software not manufactured in Europe. It delivers some of the world’s most by Apple. Most mobile threats continue to target immediate protection against IT security threats, the Java 2 Micro Edition (J2ME) platform, which is including viruses, spyware, crimeware, hackers, supported by a huge number of mobile devices. phishing, and spam. The company is ranked among That means it is not only smartphones that are at the world’s top four vendors of security solutions risk of infection, but basic mobile phones as well. for endpoint users. Kaspersky Lab products provide The second most-targeted platform is Symbian, with superior detection rates and one of the industry’s Python in third place. fastest outbreak response times for home users, SMBs, large enterprises and the mobile computing “The use of SMS Trojans is still the easiest and environment. Kaspersky® technology is also used most effective means by which malicious users can worldwide inside the products and services of the earn money. The reason is relatively simple: any industry’s leading IT security solution providers. mobile device, be it a smartphone or a basic mobile Learn more at: www.kaspersky.com. For the latest phone, has a direct connection to its owner’s money on antivirus, anti-spyware, anti-spam and other IT via their mobile account. It is this ‘direct connection’ security issues and trends, visit: www.viruslist.com.
The competition was held between January 25 and March 20, 2011. About 219 participants of various business scales throughout the country were registered. IMULAI 3.0 is the continuation program of the previous IMULAI 1.0 in 2007 and IMULAI 2.0 in 2008. It was promoted in several cities such as Jakarta, Denpasar, Medan, Bandung, Yogyakarta, Surabaya and Makassar. There are three main criteria in this competition are: new and innovative business (to create new models of business), ICT innovations (how far participants can improve on technology), and sustainability (assumptions and pre-
dictions on the financial sector). The panel of judges consists of representatives from various backgrounds, such as entrepreneurs, investors, business analysts and ICT experts, as well as representatives from USAID and Microsoft Indonesia. IMULAI has concretely supported local entrepreneurs to realize their dreams and in marketing their products and concepts to foreign countries. The partnership believes IMULAI could speed up Indonesian start-ups in reaching their goals. The cooperation between growing companies and venture capitals will create a solid infrastructure for the software industry.
The competition was held between January 25 and March 20, 2011. About 219 participants of various business scales throughout the country were registered.
The President Post
B8 April 12, 2011
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Executive Highlights Standard & Poor’s (S&P) has raised Its Indonesian sovereign debt rating to BB+ from BB with a positive outlook. The BB+ rating is one level below investment grade and is equivalent to ratings Fitch and Moody’s currently have on Indonesia. S&P said the upgrade reflected the government’s consistently improving balance sheet and external liquidity, supported by cautious fiscal management and resilient economic growth. The agency said Indonesia’s net government debt, which has declined to 24% of GDP as of 2010, compares favorably to the country’s peers in similar ratings categories. Indonesia’s foreign exchange reserves, which have risen to around US$104 billion and are equivalent to around six months of current account payments, also rates favorably to its peers. S&P said its positive outlook reflects a good likelihood of another upgrade over the next 12-18 months if the country’s inflation problems are addressed and the government continues with structural reforms to further improve its balance sheet. The ratings agency highlighted obstacles to another upgrade, including still relatively low level of economic development, where Indonesia’s GDP per capita growth still underperforms many of its peers. The ratings agency also said poor infrastructure, legal uncertainties and labor market rigidities remain significant impediments for Indonesia to pursue a higher growth path and improve its sovereign rating.
year. Himawan suggested that the tax breaks could also be applied to the US$32 billion worth of infrastructure projects that will be offered at the Indonesia International Infrastructure 2011 Conference and Exhibition on 1214 April.
el is expected to more than double by 2015.
mental alternative to traditional transport methods for coal miners. Adaro Energy president director Garibaldi Boy Thohir said the miner was projecting a doubling of coal production over the next several years and was confident the material handling system provided by FLSmidth would help it improve overall efficiency of its operations.
Danish engineering firm Flsmidth Spokane was awarded a US$135 million The Finance Ministry contract by coal miner Adaro Energy raised Rp7 trillion Coal producer Indika in Its 5 April debt to supply mining equipment. Un- Energy has acquired offering. der the deal, FLSmidth will build an advanced material conveying a 51% stake in coal equipment system with a capactransportation firm Bids placed totaled more than ity of 12,000 tons per hour and Rp26 trillion compared to Rp20 annual overburden volume of 40 Mitrabahtera Segara trillion in a similar bond offering million bank cubic meters. It will last month, highlighting increas- also provide supervision, man- Sejati in a Rp1.5 ing demand for Indonesian debt agement and field services as trillion deal. paper. The 5 April bond auction part of the contract. FLSmidth saw the sale of Rp2 trillion in new three-month treasuries at a yield of 5.02%, Rp950 billion in oneyear notes at a yield of 6.07%, Rp1.35 trillion in 10-year debt at a yield of 7.73% and Rp2.7 trillion in 15-year bonds at a yield of 8.58%. To date the finance ministry has raised nearly Rp50 trillion in bonds on the domestic market to finance a projected Rp160 trillion budget deficit in 2011. The ministry is slated to hold an auction for Rp1 trillion in syariah bonds on 12 April. It is also looking to raise up to US$4 billion over the course of the year through the sale of global bonds, including an Islamic bond issue and a yen-denominated Samurai bond.
chief executive Jørgen Huno Rasmussen said the deal with Adaro was significant as it was the first material handling contract of its kind in Indonesia. He noted that the company offered a technological, economical and environ-
Indika president director Wisnu Wardhana said the acquisition would help it cut costs by better integrating the firm’s coal operations. Mitrabahtera currently owns 51 tugboats, 47 barges and
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The rupiah is trading at a four-year high of Rp8,650 to the dollar as of 8 April. It is the fourth consecutive weekly advance for the Indonesian currency, supported by continued buying of local stocks and bonds by foreign investors. As of 7 April, the latest data available, government debt held by overseas investors totaled Rp213.3 trillion, up from Rp211.6 trillion as of 31 March. Meanwhile, net purchases of Indonesian stocks by foreign funds for the first week of April totaled Rp1.2 trillion. Many analysts expect the rupiah to continue its appreciation over the long-run. However, Bank Indonesia governor Darmin Nasution’s recent remarks highlighting concern over the speed of the rupiah’s gain after it broke the Rp8,700 level, could indicate more active central bank intervention that could curb further strengthening in the short-term.
The investment board BKPM said a government decree on tax breaks for large-scale industrial projects could be issued before the end of the month. BKPM deputy chairman Himawan Hariyoga said the government would provide a tax holiday of up to eight years after an investor returns a profit. He said the tax incentive would be offered selectively to investors that can bring in new technology, invest in pioneering industries, develop projects in less developed areas of the country and create jobs for locals. The deputy chairman said South Korean steelmaker Posco’s US$6 billion integrated steel mill venture with Krakatau Steel would be among the beneficiaries of the proposed tax incentives. The steel mill will have a capacity of six million tons per year and is projected to create more than 200,000 jobs. He said the tax breaks could kick start a proposed US$9 billion, 300,000 barrel per day refinery venture between Kuwait Petroleum Corp. and Pertamina. The two companies signed a preliminary agreement to develop the project last
United Tractors is looking to raise Rp6.1 trillion through a secondary share offering this May. Under the proposed deal, the firm will offer 403 million new shares at a price of Rp15,050 per share. Shares of United Tractors have been trading between Rp20,00024,000 over the past month. The firm’s controlling shareholder, Astra International, said it was fully committed to the secondary offering and would act as standby buyer. United Tractors said proceeds from the deal would be used to fund the firm’s business expansion. The company is planning to allocate half of the proceeds from the offering to finance the acquisition of new coal mines. Around 25-35% of the proceeds are slated for the firm’s wholly-owned subsidiary, top coal mining contractor Pamapersada Nusantara, while 15-25% will be allocated to help fund the company’s power plant investments. United Tractors reported 2010 revenues of Rp37.3 trillion, up 28% y-o-y. Of this total, Rp17.3 trillion came from heavy equipment sales, Rp16.9 trillion from coal mine contracting and Rp3.1 trillion from coal mining.
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The three-year facility comprised a Rp250 billion revolving loan and a US$70 million foreign exchange line. This comes following a deal signed last month between Trikomsel and a consortium of banks including Citibank Indonesia, Bank Mandiri and Bank Central Asia (BCA) for a loan facility totaling nearly Rp1.2 trillion. Trikomsel president director Sugiono Wiyono said the bulk of the loans would help finance the company’s business expansion. The firm, which has more than 800 OkeShop outlets across the country selling a variety of mobile phones and consumer telecom items, plans to add another 100 shops over the course of the year. Trikomsel reported total sales of Rp5.5 trillion for 2010, up 1% y-o-y. Sales for mobile phones, which represented the bulk of total sales, was up 14% y-o-y to Rp4.7 trillion. Trikomsel reported 2010 profits totaling Rp204 billion, up 74% y-o-y on the back of the company’s focus on high-margin items like mobile phones.
The deals are made available to purchase for a limited time, usually 24 hours. If enough subscribers purchase the deal then all receive discounts, but if not enough buy the deal then no one receives the discount and their money is refunded. Disdus, which was launched just last year, has already offered more than 30,000 vouchers working with more than 200 merchants, including BlitzMegaplex cinema chain and high-end retailer Mitra Adiperkasa, which runs outlets like Starbucks and Burger King. Groupon chief executive Rob Solomon said the acquisition would enable Disdus to leverage Groupon’s network and expertise to further expand its business. Disdus, which currently operates in Jakarta and Bandung, said it plans to expand to at least five major cities this year.comprising up to 15% of the country’s gas supply over the next two decades.
Energy giant BP has signed deals to develop four coal-bed Leading methane (CBM) fields pharmaceutical in Indonesia. firm Kalbe Farma announced a Rp200 The firm said it would allocate billion investment for US$15 million for seismic exploration, surveying and initial pro- a high-tech cancer duction over the next three years. medication production The fields are all located in the Barito basin in South Kaliman- facility. tan. Three fields will be developed in a venture with local firm Sugico Graha in which BP will hold a 45% stake in each field. The fourth field will be developed in a venture with Pertamina in which BP will hold a 44% stake. In a press statement, BP president of Asia Pacific Exploration & Production, William Lin, said the Barito basin was a highly prospective area and would enable BP to leverage its experience developing CBM to strengthen its portfolio in Kalimantan. Indonesia has proven CBM reserves totaling nearly 500 trillion cubic feet (tcf). Over the past several years the government has been making a push to exploit these reserves, and some analysts project CBM
INFLATION 66 CITIES 107.4
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France-based engineering contractor Technip was awarded a contract by Chevron Indonesia to build two offshore floating production units. Financial details were not dis-
EXPORT AND IMPORTS (US$ Million) Exports Imports
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Link net is a wholly-owned subsidiary of Lippo Group’s First Media. First Media president director Hengky Liwanto said the deal would help finance the company’s expansion plans over the next several years. He remarked that the firm was looking to invest Rp2 trillion to upgrade its network infrastructure with the aim of boosting its total subscriber base to 1.2 million users by 2015. As of end-2010, First Media reported a total of 334,000 subscribers for Link Net, up 20% year-on-year. First Media also reported Rp833 billion in revenues and Rp42 billion in profits for full year 2010, up 15.2% and 27.9% year-on-year respectively. Cable TV subscriptions contributed 31% of total revenue. Indonesia pay TV household penetration is among the lowest in the Asia Pacific at 3%. This lev-
Telecommunications retailer Trikomsel Oke has secured a dualcurrency loan facility from Bank UOB Buana worth a total Rp856 billion
closed. The contract covers the construction of the hull, topsides, mooring systems and steel catenary risers of the floating production units. Technip said the deal was the firm’s first deep water engineering project in Indonesia. The floating production units will be placed at Chevron’s US$6 billion Gendalo-Gehem deep water natural gas project in the Makassar Straits offshore East Kalimantan. The Gendalo-Gehem project is expected to produce around 1.1 billion cubic feet of natural gas and 31,000 barrels of condensate a day at its peak. Commercial output from the project is expected to start by the second half of the decade. Gendalo-Gehem is 72% owned by Chevron, 18% by China’s Sinopec and 10% by Pertamina.
The company’s director for prescription drugs, Joni Fauzi, said the plant would be the first of its kind in Indonesia and would help meet growing domestic demand for drugs to treat cancer. The market for cancer medication is currently estimated at around Rp1 trillion, a figure which is expected to grow as Indonesian consumers become more affluent. Joni remarked that Kalbe currently imports and distributes nearly 20 drugs to help treat cancer. He estimated that the new facility would reduce costs by 30-50%. The plant will be constructed at Kalbe’s production complex at the Pulogadung industrial estate in East Jakarta. The facility is scheduled to start commercial production in 2013.
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Global private equity firm CVC has acquired a 49% stake in cable tv and broadband operator Link Net in a Rp2.4 trillion deal.
four floating cranes, and controls an estimated 11% of the domestic coal transport market. Company president director Patricia Prasatya said the firm was allocating Rp800 billion in capital expenditures this year which will help fund the construction of 15 tugboats, 15 barges and one floating crane to add to its fleet. She said the firm was looking to boost its coal transport volume to 47 million tons from 39 million tons in 2010. The executive projected Mitrabahtera’s profits this year to reach Rp334 billion, up nearly 70% from Rp198 billion a year earlier on the back of rising demand for coal.
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Leading U.S.-Based online coupon firm Groupon has acquired local internet start-up Disdus as part of its expansion into Southeast Asia. No financial details were disclosed. Groupon and Disdus operate by offering subscribers daily deals such as discounts at restaurants or movie theaters.
Business Highlights are contributed to The President Post by CASTLEASIA/PT Jasa Cita from information supplied to members of their CEO Forum, the Indonesia Country Program. They are reprinted here with permission. For more information about CASTLEASIA programs, please contact Juliette or Wijayanti at 62 21 572 7321 or email castle@castleasia.com subject CEO Forum
SECTION
The President Post
Infrastructure
C
Display until May 12, 2011 /// N0. 23 www.thepresidentpost.com
Policy Certainty Needed to Boost Toll Road Investment www.macquarie.com
Apart from the need to be fairer in awarding contract, the government needs to have a well-planned investment road map in order to provide investors with a clearer picture of business prospects therein. By Malik Ibrahim
B
usiness leaders are saying that the government needs to streamline its toll road investment policy by removing factors that create confusion to investors. What’s happening today is that idle investors are receiving the same treatment as those who are seriously investing in this sector, says Lukman Purnomosidi, the vice chairman for infrastructure development at the Indonesian Chamber of Commerce and Industry (Kadin). “We have witnessed confusing policies,” he says, “because investors who have not done anything are receiving the same treatment as those who have invested heavily in the sector.” Lukman says this should not have happened because in fact the government has actually threatened to revoke the business licenses of idle toll road investors. He complains about the government’s indecisiveness in that in late December last year the government intentionally allowed all toll road investors to carry on with their projects—even though many have not even cleared even an inch of land five years after they got the contracts. Lukman says what is happening is a double-standard policy in that on one hand the government claims to allow new investors to do business in this sector, on the other it does not let them in because investors who have signed contracts five years ago are still being retained even though they have not built any road. “Some have not even cleared an inch of land for the projects,” he said. He also says that apart from the need to be fairer in awarding contract, the government needs to have a well-planned investment road map in order to provide investors with a clearer picture of business prospects therein. For instance, there must be incentives for investors of certain toll roads where traffic is still very scarce.
• Bekasi-Cawang-KampungMelayu (21.04 km, worth Rp6.2 trillion).
Serious versus Idle Investors In contrast to this, chairman of Indonesia Toll Road Association, FatcurRochman, says that the government has actually been too good to investors of 24 toll roads who should have actually received penalties for their inaction. “Changes have been made to their contracts with the inclusion of addendums which requires them to strengthen their investment capital be it internally or through inclusion of new investors,” he says. He notes that the government has promised to streamline land clearance policy in order to allow investors to start their projects. This month is being seen by toll road investors as a decisive moment for them as they expect the parliament to adopt the Law on Land Clearance which would better facilitate execution of toll road projects. This would include provisions on the need to employ more judges on regency level as well as land appraisal personnel to help bridge differences between landowners and project executors.
“We in the government encourage development of toll roads especially from harbors to industrial centers.” Djoko Kirmanto Public Works Minister
adopt, says Public Works Minister Djoko Kirmanto. The government is currently reviewing the execution of 24 toll road projects comprising:
Fatchur says investors are hoping that the law shall be passed this month so that land clearance activities can start—it takes approximately one year to complete—so by the second quarter of 2012 investors will start building new toll roads. He hopes that the government will act more convincingly in that those who are incapable of executing their contracts should be pulled out of the stage to allow serious investors to step in. A Lesson from Korea A similar sentiment was aired by Ki Yong Han, Director General of Urban Development from Incheon, South Korea, during a recent infrastructure dialog in Jakarta which was sponsored by PT Nusantara Infrastruktur Tbk. “In Korea,” the official says, “land clearance is the duty of the investors. But whenever the investors cannot do that, the government will step in and even shoulder the cost of land clearance.” Han explains that development of the Incheon Toll Bridge is a good example of how the Korean government intervenes to ensure success of a toll road project—because of consideration of economic values that will come along with
Incheon Toll Bridge is a good example of how the Korean government intervenes to ensure success of a toll road project—because of consideration of economic values that will come along with the completion of the project. the completion of the project. This is also a good example of how the government guarantees the success of an infrastructure project, Han adds. Duk-Ki Im, General Manager for Civil Engineering at Samsung C&T Corporation, speaking on behalf of Korean investors, says in Korea the government also provides financial and fiscal incentives for toll road investors. For 15 years, the government guarantees minimum revenue for the toll road and investors are exempted from taxes because the Incheon Toll Bridge connects In-
cheon Free Economic Zone with Songdo City. Development of 24 Toll Roads In a related development, it was learned last week that the government had postponed amendment of the contracts for 24 toll roads due to technical legal issues. Ahmad GhaniGazali, chairman of the Toll Road Regulatory Agency at the Ministry of Public Works, says that the postponement has to do with technical and legal issues being handled by a team from the National Development Planning Agency (Bappenas).
He says amendment of the contracts is expected to take place this month and that priority will be given to development of the Cikampek-Palimanan toll road in West Java. This is being prioritized due to the fact that 90 percent of the land has been cleared for the projects and investors are ready to start financing its development. In addition to it, at least Rp150 billion has been prepared to clear the remaining 10 percent of the land for the project. This 116 km toll road is being developed as a model for the 23 other projects to
• Cimanggis-Cibitung (25.39 km, worth Rp3.1 trillion) • Serpong-Cinere, (10.15 km, worth Rp1.7 trillion) • Solo-Mantingan-Ngawi (90.10 km, worth Rp5.5 trillion) • Ngawi-Kertosono, (87.02 km, worth Rp4 trillion) • Pejagan-Pemalang (57.50 km, worth Rp3.2 trillion) • Pemalang-Batang, (39 km, worth Rp2.3 trillion) • Batang-Semarang (75 km, worth Rp3.6 trillion) • Kunciran-Serpong (11.19 km, worth Rp1.8 trillion) • Cengkareng-Kunciran (15.12 km, worth Rp2.4 trillion) • Ciawi-Sukabumi, (54 km, worth Rp4.9 trillion) • Waru (Aloha)-Wonokromo-Tanjung (17.72 km, worth Rp6.5 trillion) • Pasuruan-Probolinggo (45.32 km, worth Rp3.3 trillion) • Bogor Ring Road (Section II and III) (7.15 km, worth Rp1.2 trillion) • Kertosono-Mojokerto (40 km, worth Rp2.2 trillion) • Semarang-Solo (75.70 km, worth Rp6.1 trillion) • Surabaya-Mojokerto (36.27 km, worth Rp2.9 trillion • JORR Section W2 North (7 km, worth Rp1.4 trillion) • Cikampek-Palimanan (116 km, worth Rp11.36 trillion) • Cinere-Cimanggis part of Jagorawi (14.70 km, worth Rp1.9 trillion) • Gempol-Pandaan (13.61 km, worth Rp 826 billion) • Gempol-Pasuruan (33.75 km, worth Rp1.8 trillion) • Depok-Antasari (21.55 km, worth Rp2.5 trillion) • Cibitung-Cilincing (34.50 km, worth Rp2.4 trillion)
Speedy Flow of Goods and Services Prompt completion of such projects is expected to increase the pace of economic growth especially in the retail sector where distributors are calling for shorter transport time to reach consumers. This can only become a reality when roads are in good condition and traffic is not too heavy. Bad roads and heavy traffic are obstacles to economic growth because such condition hampers the flow of goods and services from producers to consumers, says Henry Komala, the Vice President Director of PT Sumber Alfaria Trijaya (Alfamart). He told Investor Daily that distributors and retailers expect the government to speed up development of toll roads across Java in order to facilitate a better flow of goods and services to consumers. He says the government should see how the People’s Republic of China benefits a great deal from all-out development of toll roads. He argues that market price increases are often caused by a shortage of supply, which in itself is caused by late arrival of goods. This is due to bad road condition and heavy traffic jams. So one good way to prevent volatility of market prices is to have good toll roads and streamline the traffic. Based on all these facts, Minister Kirmanto is urging investors to pour their money into this lucrative sector, hoping that provision of more toll roads will lead to better flow of goods and services, not to mention other benefits and opportunities resulting from the opening of new toll roads. “We in the government encourage development of toll roads especially from harbors to industrial centers,” the minister told a gathering of business leaders in Makassar recently. Apart from toll roads, the government also welcomes fresh investments from the private sector in clear water projects, because the state budget is not enough to cover all the needs. The minister says that 50 percent of government budget for this year is used to finance the management of 38,000 kilometers of roads nationally, so there is hardly anything left for new toll road projects. “We hope members of Kadin can bring in new investments for toll road and clear water projects,” says the minister.
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The President Post
C2 April 12, 2011
www.thepresidentpost.com
Infrastructure Harbor-handling SOEs Upgrade Infrastructure for ACFTA Era The President Post/Nandi Nanti
As Indonesia’s industrial sector is growing fast, the need for investment in infrastructure is also rising at a rapid pace. Government budget for providing new infrastructure is very limited, so participation of the private sector—foreign and domestic alike—is certainly needed no matter what regime is in power or who leads the country. By Malik Ibrahim
O
n November 4, 2004 ASEAN and the People’s Republic of China signed the A SE A N- Ch ina Free Trade Agreement which went into effect on January 1, 2010. It stipulates comprehensive tariff reduction mechanism in order to boost trade and investment in the region. Consequently, ASEAN countries must now either upgrade their trading infrastructure or lose the game. As such, trading infrastructure is now taking centre stage. Due to this, Indonesia is now upgrading its harbor facilities, as 80 percent of its trading activities occur through seaports. This apparently is the reason why the government is urging PT Pelindo I, II, III, and IV to improve Indonesia’s competitiveness through provision of better seaport facilities. “State-owned enterprises handling seaports play a big role in boosting Indonesia’s competitiveness,” says Minister of StateOwned Enterprises Mustafa Abubakar following a recent hearing at the parliament. In order to increase competitiveness, the minister says, the government must remain committed to reducing logistics cost while improving public service and harbor management productivity. Since 2007, therefore, the government has paid special attention to the provision of better facilities at “primary gateway” harbors in order to accelerate the flow of goods. The term “primary gateway” refers to the country’s main exportimport terminals such as Tanjung Priok in Jakarta, Tanjung Perak in Surabaya, and the major seaports in other coastal cities. As of 2010, there have been significant changes in harbor management in that public service has become better and more customer-oriented. This must be maintained, said the minister. In order to better facilitate the flow of goods, the government has helped realize development of such new harbors as Karingau, Teluk Lamong, Makassar, and East Ancol. The policy now is that every time a new seaport is built, other facilities must also be built nearby, such as container terminals, office space, banking network, etc. The minister says that Pelindo companies have been ordered to provide the best of its service to customers. In the event they fail to do so, customers can make them pay a fine. In order to build better seaports, Pelindo needs big funding, for sure. This is why PT Pelindo-I recently requested and received $39 million in loan from Bank Mandiri. This disbursement of $39 million is the first batch of loan for Pelindo. It will receive a total of Rp1.2 trillion, says Director of Coporate Banking of Bank Mandiri, Fransisca Nelwan Mok. The money will be used to build facilities in Aceh, North Sumatra, Riau and Riau Islands in order to facilitate domestic and international trading activities. Bank Mandiri had previously disbursed Rp 112.65 billion to Pelindo-I in the form of a Letter of Credit to procure container cranes. Pelindo-I is also the first seaport development company ever
to have received such financing assistance from the bank with a floating interest rate of five percent. Pelindo-I currently handles 15 seaports, 11 subsidiary ports, one container terminal, one container terminal depot and many other related facilities. Merak-Bakauheni One of the busiest seaports in Indonesia is Merak on the westernmost tip of Java Island, which links Sumatra. In other words, this is a seaport with a high economic value. Because of its strategic location it is plied every day by thousands of commercial trucks and busses, not to mention private cars. The government is therefore planning to deploy four more ferries and build a new seaport in order to ease congestion there. This will be the sixth seaport built there, says Suroyo Alimoeso, the Director General for Land Transportation. The contractor which will build
The government is urging PT Pelindo I, II, III, and IV to improve Indonesia’s competitiveness through provision of better seaport facilities.
www.iisd.ca
According to Transportation Minister Fredy Numberi, Chinese investors are eyeing investment opportunities in Papua especially in seaport and airport development.
the harbor is PT ASDP cooperating with the local government of Cilegon,” Suroyo says. On hearing this, Etha Bulo from the Democrat Party says building such a facility is not only good but also important as a mechanism to get rid of illegal levies in the harbor. PT ASDP is also planning to deploy more 4.000-5.000 gross ton RoRo (roll-on/roll-off) boats this year. Acting CEO of PT ASDP Sirajuddin Saini says they are second-hand boats but in very good condition. By 2011, the company will have deployed 15 more ferries in addition to its 33 ferries now in operation in the hope that there will be no more congestion in the harbor. Chinese Go to Papua The high-speed of development in Indonesia’s sea transportation sector attracts the attention of many investors, including those in the People’s Republic of China, who now are preparing to step in. According to Transportation Minister Fredy Numberi, Chinese investors are eyeing investment opportunities in Papua especially in seaport and airport development. A delegation from China visited Papua Governor’s office in January 2010 in a trip facilitated by the minister. The delegation consisted of the Chinese Ambassador to Indonesia and nine corporate leaders from China. The Chinese agreed to invest in new harbors in Jayapura and Sorong and to develop the Biak seaport in order to better accommodate international trading activities. The government also encourages Chinese investors to develop airports in Manokwari, Sorong, Jayapura, and Timika. The Chinese have not only invested in transportation sector in Papua, they have also started to
do business in oil and gas there. At a time when Indonesian investors are still reluctant to explore new opportunities in infrastructure sector, it is good news that the Chinese are going into Papua with determination to elevate its attractiveness. Therefore they deserve being given more incentives be it fiscal or legal in order to swiftly raise Papua’s image as a good international trading hub and not just as a gold mining territory. Indonesia’s harbor-handling SOEs need to develop more facilities in order to boost export-import activities. So far only harbors in major industrial zones have been developed as international gateways, but those in other parts of the country which also have high economic potential have yet to be developed. On the contrary, development of river transportation has not been given sufficient attention to date, especially on Kalimantan and Sumatra islands where many people prefer to use rivers instead of roads to reach markets and production centers. As Indonesia’s industrial sector is growing fast, the need for investment in infrastructure is also rising at a rapid pace. Government budget for providing new infrastructure is very limited, so participation of the private sector— foreign and domestic alike—is certainly needed no matter what regime is in power or who leads the country. So, foreign investors who still do not know where to invest are encouraged to look into the infrastructure sector, given that this is an area that promises huge and steady returns in the long run. The infrastructure areas awaiting investments are toll road, electricity, harbor, airport, agroindustry, land, sea, and air transportation, telecommunication, as well as industrial zones.
The President Post
www.thepresidentpost.com
April 12, 2011 C3
Infrastructure Indonesia Upgrading Airports to Boost Tourism and Investment www.traveltourismindonesia.com
Transportation industry analysts say that while expanding the airport, the government needs to provide better service to the public because bigger airport means more people to deal with, more problems arising therein, and therefore better management system with higher level of discipline is required.
T
ing Rp1.1 trillion syndicated loan from local banks. That covers 60 percent of the total investment need—40 percent of the fund is already available. Minister of State-Owned Enterprises Mustafa Abubakar says that the loans will come from a syndication comprising Bank Mandiri, Bank Rakyat Indonesia (BRI), and Bank Negara Indonesia (BNI). Mustafa says that BNI has been given a special assignment to finance infrastructure projects such as development of seaports and airports, as well as telecommunication and electricity projects. Bank Mandiri and BRI have also been encouraged to do the same, as Bank Tabungan Negara (BTN) will focus on public housing sector, the minister adds.
According to Akip Syamsudin, the official in charge of Tangerang urban planning, the local government has set up a nine-member committee of planners for the purpose. The team will start by making plans for relocating the villagers and clearing the area—which will take about one year to complete. The government will make sure that expansion project for the airport will support development of the new Pantura City. The idea is to synergize development plans so that facilities attached to the expanded airport will also be utilized by the rest of the new city. This includes cargo terminals, international seaports, container terminals, and so forth.
Airport development is carried out by PT Angkasa Pura-I, which has earmarked Rp5.4 trillion for several projects. The Ngurah Rai expansion project as well as development of a new airport in Yogyakarta will be completed in 2013. Completion of these projects is expected to boost tourism industry given the attraction of Bali and Yogyakarta as Indonesia’s primary gateways.
By Lily Amelia Goan
he government of Tangerang regency has agreed with PT Angkasa Pura II to relocate at least 10 villages to make way for the expansion of SoekarnoHatta International Airport that will cover 1,000 hectares of land. That will make Soekarno-Hatta a 2,740 hectare airport. In a year’s time, the 10 villages in Teluk Naga and Kosambi subdistricts will be cleared for the airport. This is part of the development of what will be called Pantura City which will also include reclamation of 9,000 hectares of the coastal waters.
According to Tri Sunoko, president director of PT Angkasa Pura II, new runways will be built under the expansion project to accommodate a steady increase in the number of passengers. It is estimated that the number of passengers increases by over 10 percent every year and will reach 75 million by 2017; so by then the airport must already have new runways to serve the need. This year alone, the number of passengers has reached over 44 million and will continue to increase amidst a clear shortage of accommodation. The two runways now being used will not be able to accommodate 75 million passengers, so more such facilities should be built now, Sunoko says. Currently the airport sits on 1,740 hectares of land and is only capable of accommodating 32 million passengers annually. This is not enough now because of the rapid inflow and outflow of people from many corners of the globe. Transportation industry analysts say that while expanding the airport, the government needs to provide better service to the public because bigger airport means more people to deal with, more problems arising therein, and therefore better management system with higher level of discipline is required. International aviation observers have said that Indonesia needs to upgrade its main airport’s facilities because it is competing with other countries in the region. Communications Director of International Air Traffic Association, Anthony Concil, says that Soekarno-Hatta Airport is not competing against domestic airports; it is competing against the airports of Kuala Lumpur, Singapore, and Bangkok. Many believe that Singapore’s Changi and South Korea’s Incheon are the best airports in Asia. It remains to be seen whether the expanded Soekarno-Hatta Airport will be as attractive to international travelers. Bank Loan for Bali Airport In another development, Bali’s Ngurah Rai International Airport will be expanded further us-
In order to encourage full utilization of the airport, the West Java government is also encouraging development of toll roads, including the CileunyiSumedang-Dawuan (Cisumdawu), Soreang-Pasir Koja (Soroja), and Bandung Intra Urban Toll Road (BIUTR) which is commonly known as Bandung city toll road.
West Java Upgrading Itself Meanwhile, the West Java capital city of Bandung is also rushing to bag more foreign exchange by raising its image with development of modern transportation infrastructure. Air Asia’s Airbus A3320 passenger jets now lands at Husain Sastranegara International Airport every day. This is part of the local government’s strategy to attract international travelers, says West Java Governor Ahmad Heryawan. Heryawan says the government is committed to upgrading transportation infrastructure by, among other things, accelerating the development of Kertajati airport in Majalengka and revitalizing the Nusawiru airport in Ciamis. “Infrastructure and transportation play a vital role in the development of every region, so availability of good economic facilities is a must,” the governor said after seeing an Airbus A32 of Air Asia land at the Bandung airport. In order to encourage full utilization of the airport, the West Java government is also encouraging development of toll roads, including the Cileunyi-Sumedang-Dawuan (Cisumdawu), Soreang-Pasir Koja (Soroja), and Bandung Intra Urban Toll Road (BIUTR) which is commonly known as Bandung city toll road. The government hopes that completion of these toll roads will
Terminal 3 Soekarno-Hatta Airport. Communications Director of International Air Traffic Association, Anthony Concil, says that Soekarno-Hatta Airport is not competing against domestic airports; it is competing against the airports of Kuala Lumpur, Singapore, and Bangkok.
accelerate traffic to and from the capital city and in the process see more people reaching the airport conveniently. That will also accelerate the pace of economic growth because the flow of goods and services from production centers to consumers will become speedier. Sulawesi and Sumatra Another province upgrading infrastructure is Southeast Sulawesi, where an airport is being renovated in Sangia Ni Bandera, Kolaka regency, complete with passenger terminals, to be started this year. The project will include an addition of 500 meters to the current runway, making it a 1,700 meter runway in order to accommodate bigger planes. This airport is unique as its development is financed by contribution from local business leaders instead of by allocation from the state budget. Another regency upgrading its aviation infrastructure is the regency of Bolaang Mongondouw in North Sulawesi. A new airport will be built in Lalow, while the seaport in Labuan Uki is being extended to accommodate many more big passenger and cargo ships. The local government is cooperating with PT Dirgantara Air Service (DAS), which is ready to help finance land clearance activities. DAS is an aviation company operating a fleet of propeller aircraft connecting many islands across the archipelago. The company is heavily involved in development of this new airport. Meanwhile, the government in North Sumatra is waiting impatiently for the launching of a new international airport in Deli Serdang. Construction works on the airport are expected to complete in 2013, but even now the government is already saying that with this new airport, some new economic centers will emerge. The Kuala Namu International Airport in Deli Serdang is expected to replace Polonia Airport in Medan which is already crowded. In order to support this, alternative toll roads are being built such as the Medan-Tebing Tinggi toll road. Also under construction are new electricity and water purification plants as well as a telecommunication network. Deli Serdang authorities say they expect the airport development to usher in a myriad of business opportunities, including investment opportunities in such fields as fishery, tourism, agroindustry, housing, and trade in general.
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Perspective To Go or not to Go Nuclear The plan of Indonesia to operate nuclear power plants was not new because the country was one of the initiators of the establishment of the IAEA. But before deciding on the nuclear energy, the government of Indonesian will first maximize the use of new and renewable energy, especially geothermal, hydro-energy and bio-fuels.
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espite growing opposition and concern sparked by the ongoing nuclear crisis in Japan, Indonesia is unlikely to halt its plan of building its first nuclear power plant. As the nation grapples with a power crisis for years with major cities frequently hit by blackouts, Indonesia will probably turn to nuclear energy as a necessary option and part of the solution. The ongoing nuclear disaster in Japan should actually serve as a warning for Indonesia to abandon its nuclear plan, but Sri Setiawati, a deputy of research and technology minister, said in Pontianak, West Kalimantan, last month that the country was most ready to build a nuclear power plant. “Among the 10 ASEAN member countries, Indonesia is the most ready to build a nuclear power plant,” Sri Setiawati said, admitting however that the country is still behind Malaysia as it plans to start a similar project next year. She said Indonesia`s readiness to build a nuclear power plant was based on a review of the International Atomic Energy Agency (IAEA).According to her, the country already had adequate nuclear expertise, experts, materials, and technology to go ahead with the plan.
Meanwhile, the Indonesian Nuclear Energy Regulatory Agency (Bapeten) has confirmed that the country`s personnel are ready to operate nuclear power plants as soon as those facilities are built. “Let me emphasize here that Indonesian human resources will be ready by the time nuclear power plants are constructed in Indonesia,” said Bapeten head As Natio Lasman recently. Lasman added that the performance of Indonesian nuclear experts was already acknowledged by the International Atomic Energy Agency (IAEA). There are now seven Indonesian experts working as supervisors in IAEA. He said those seven nuclear supervisors were on IAEA missions in various countries, including one in Tokyo, Japan. But he admitted there is a fear for the presence of nuclear power plants among the Indonesian communities, something that has arisen, he said, from lack of the correct information about how nuclear power plants are operated. Lasman explained that nuclear energy is the one that can replace fossil energy, which is widely in use today provided the utilization is in accordance with strict regulation and control, whereas fossil energy is depleting fast in the recent years. He added that the most important thing for Indo-
nesia in its plan to build nuclear power plants is connected to the correct choice of the locations as well as the supporting infrastructures. The aspects that are needed to be calculated include among other earthquake- and tsunamifree. According to him, the plan of Indonesia to operate nuclear power plants was not new because the country was one of the initiators of the establishment of the IAEA. But before deciding on the nuclear energy, the government of Indonesian will first maximize the use of new and renewable energy, especially geothermal, hydro-energy and bio-fuels. Energy and Mineral Resources Ministry`s Director General for Renewable Energy and Energy Conservation Luluk Sumiarso has said that the use of nuclear energy would be the last option. “But last option does not mean that nuclear is not on the table. It will remain being prepared but we are now still maximizing the use of other new and renewable energy such as geothermal, hydro-power, and bio-fuels which have a big potential to be developed,” Luluk said. According to him, the plan to build nuclear power plants (PLTN) would continue to go ahead with the principle of conformity, readiness, and safety. Meanwhile, a number of activists grouped in the a working unit which cares for geothermal power plants in a forum on Indonesian Renovation on Wednesday said the risk in geothermal utilization was smaller than that of nuclear facility. They said the potential of the use of geothermal energy needs to be prioritized. Muhammad Ridho, one of the
activists grouped in the Care Unit Geothermal Power Plant, said at an Indonesian Renovation Forum that geothermal energy potential should be prioritized because it is less risky than nuclear energy. He said Indonesia had the largest source of geothermal energy in the world that serves as a potential strategy for non-military national defense. “The risk in the utilization of geothermal energy is less than that of nuclear power, and geothermal pressure control can reduce and inhibit the occurrence of volcanic eruption,” he said. For the sake of security and national interests and welfare of the people, Muhammad Ridho said the state should wisely control the geothermal energy to ensure continuous availability of power supply. Therefore, he added, the government and the House of Representatives should continue to encourage the regions with geothermal energy to form regionally owned enterprises. “Indonesia`s geothermal energy potential which is the largest in the world should serve as a golden opportunity to become the `Center of Excellence` in the field of energy,” he said. Environmentalists and public activists have launched years of protests, arguing that Indonesia`s soil is too unstable for the building and safe operation of nuclear power plants. It is because Indonesia`s more than 17,000 islands are scattered along a belt of volcanic and seismic activity, known as the Pacific “Ring of Fire”, that makes the country one of the most quake-prone places on the planet. Energy expert Lilo Sunaryo
said in Semarang, Central Java, recently that Indonesia has to learn from the nuclear disaster in Japan and then review its nuclear power plants project. “Indonesia has to review its plan to build nuclear power plants,” Lilo Sunaryo said. Although the people of Japan have sophisticated technology and a high degree of discipline, Lilo said they were still overwhelmed by the nuclear catastrophe. Even the Japanese government itself has admitted that it was overwhelmed by the scale of the twin natural disasters and the nuclear crisis, triggered by the earthquake and tsunami that claimed more than 10,000 lives. “All the more so Indonesia, which lacks both technology and discipline. Some countries have even abandoned their nuclear power plants and the rest have reviewed their plans to build such facilities,” Lilo said, referring to the Philippines, Malaysia, Spain, and Venezuela. In the Philippines the mothballed Bataan Nuclear Power Plant (BNPP) has gone unused as events in Japan have led the country to discard its plans to activate the plant. A proposal to revive the Bataan Nuclear Power Plant in the Philippines is at least for now dead in the water after partial meltdowns at 2 nuclear reactors in Japan revived fears of a Chernobyl-like disaster. Meanwhile, former Malaysian Prime Minister Mahathir Mohamad has said it was better for his country not to have a nuclear power plant. “You know my view about it. We do not know enough about the reaction of this material,” Mahathir was quoted by Bernama as telling to reporters when
he was asked for his view on building the nuclear power plant. In Madrid, AFP reported recently that the Spanish government would review security measures at all its six nuclear power plants in the wake of the disaster in Japan. “A review of the security systems of all the reactors in the country will take place to learn as many lessons as possible from what happened in Japan,” Industry Minister Miguel Sebastian told Spanish Parliament. According to AFP, Venezuelan President Hugo Chavez in Caracas last Tuesday said he suspended his country`s fledgling nuclear energy program in the wake of nuclear crisis in Japan. Chavez said he had directed Energy Minister Rafael Ramirez to freeze the plans they have been advancing, for preliminary studies of a peaceful Venezuelan nuclear program. “What has happened in the last hours is extremely risky and dangerous for the whole world, because despite the advanced technology that Japan has, just look at what has been happening with some nuclear reactors,” Chavez said. Sunaryo said it was no longer necessary for Indonesia to have a nuclear power plant. According to him, a nuclear plant for Indonesia was a dilemma because besides producing energy it also produces hazardous substances with a tendency to create various kinds of diseases. “The world at present is not in a situation of cold war and therefore the use of alternative energy should be optimized,” Lilo said. Sunaryo said Indonesia should not live in high risk with the use of nuclear energy. “The nuclear power plants will
only be profitable for factories but not for the people at large,” he warned. Ironically, Irwan Meilono, a geodesics lecturer at the Bandung Institute of Technology (ITB), said in Bandung last month that Indonesia should not fear to build its nuclear power plants following the explosion at a similar facility in Fukushima, Japan. He said Japan`s nuclear reactor blast was caused by an earthquake because most of Japan was quake prone, and although Indonesia suffered frequent earthquake, it still has many quake-free areas in Kalimantan, Bangka-Belitung, and northern parts of Java island. “In relation to the disaster, Indonesia is predicted to resume the building of a nuclear power plant at by 2018 or 2020,” Irwan said. According to him, Kalimantan, Bangka Belitung and Irian are regions considered as potential areas to build the nuclear power plants. The nuclear plans are part of an ambitious proposal by Indonesia to triple its electricity output by 2025 while weaning itself off imported oil and onto local coal, gas, and renewable and atomic energy. A 2006 decree by President Susilo Bambang Yudhoyono calls for 5 percent of electricity to come from nuclear and other new energy and renewable energy sources by then. The most prominent project is a proposal to build two plants with a combined capacity of 18,000 megawatts by 2022 in the provincial government of Bangka-Belitung because it is far from the most active fault lines. Compiled from reports by Antara national news agency.
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Pictorial Events National Film Day Minister of Culture and Tourism Jero Wacik shows his appreciation to leading Indonesian film players, in an event held at his office in Jakarta. In this event, the Best Picture award was given to “3 Hati 2 Dunia 1 Cinta”. Reza Rahadian was chosen as Best Actor and Laura Basuki as Best Actress. Present at the event were Dedi Miswar, Anwar Fuadi, Dedi Gumelar and other film figures. Taxt & Photos by Nandi Nanti
APSDEX 2011 The Asia Pacific Security & Defense Expo 2011 was held at the Jakarta Convention Center Hall, 23-25 March 2011. The exhibition exhibited the tools of defense and military security and featured a defense dialogue forum. President Susilo Bambang Yudhoyono and Timor Leste Prime Minister Xanana Gusmao visited this exhibition. Taxt & Photos by Nandi Nanti
Breakfast Dialogue The Financial Club Jakarta presented a breakfast dialogue themed “The Role of Microfinance in Millennium Development Goals” with Irawan Massie President Director & CEO Bakrie Microfinance Indonesia as the speaker. Present at the breakfast were prominent businessmen and professionals. Taxt & Photos by Nandi Nanti
Industry Sector Revitalization Dialogue The Financial Club held a dialogue with Minister of Industry Mohamad S. Hidayat, themed “Industry Sector Revitalization”. Present at the event were among others professionals such as Ilham Habibie and Robby Djohan. Taxt & Photos by Nandi Nanti
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Living www.pickthewinninglotterynumbers.com
Should lottery winners
share with colleagues? (CNN) – If you won $19 million, would you share it with your co-workers? hat’s the question seven lucky New York state employees are reportedly contemplating after claiming the huge Mega Millions lottery jackpot Thursday. For years, the so-called “Albany Seven” have pooled their money to buy lottery tickets together. Now that their numbers have come up, they are in a position to share their winnings with five colleagues who had been part of the pool in the past but didn’t pitch in this time around. The idea of sha ring a
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m u l timillion dollar windfall such as this might seem ludicrous. It surely goes against some long-
standing notions we have about human behavior, namely that it’s guided by self-interest. But a recent wave of scientific research suggests it’s not such a crazy idea after all. In fact, giving away a portion of their winnings might be a surer route to happiness for the Albany Seven than keeping it all for themselves. Many psychological studies have found that after our basic needs are met, more money does not necessarily bring us more happiness; it might even impair our ability to enjoy positive experiences in life. What’s more, research has shown that lottery winners are no happier than the rest of us, and they get less pleasure from everyday activities. On the flip side, though, there’s a growing body of evidence that people feel a genuine boost of pleasure and happiness when they give to others. Altruism activates the same regions of the brain that light up when we have sex, eat chocolate or indulge in other pleasures, according to scientists at the National Institutes of Health.
Seeking comfort from faith healers in India (CNN) – At a small Hindu temple on the eastern outskirts of Rajasthan, India’s largest state, the spiritually possessed come to have their demons expelled.
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or people suffering mental health problems in this part of the country, this is the closest many will ever come to psychiatric care, says Hungarian iReporter Pataki Balazs. “Exorcism is a way of life” in this northwestern region, he explained in an iReport that documents the daily purification rituals conducted by local faith healers at the Balaji temple. “There is very little understanding of mental health disorders, especially in the rural north of India,” said Balazs, who has been traveling to document the region almost every year since 1994. According to the 41-year-old amateur photographer, exorcism is performed in a number of ways, ranging from a strict diet over chanting Tantric hymns to, he alleges, keeping the “possessed” in shackles. “Often the wails and screams can be heard for miles around,” he noted. “Sometimes ‘patients’ have to stay on for days on end to be exorcised.” In India – where there is one psychiatrist per 500,000 people and only one psychiatric nurse per 2 million, according to World Health Organization figures – faith healers are commonplace. “They are everywhere,” said Shoba Raba, director of policy at the Indian branch of Basic Needs, an international mental health and development charity. “And they are almost always the first and only person in a community to ‘treat’ psychiatric disorders.” She said that, like in a lot of developing countries, the medical priority in India remains with communicable diseases. Beyond this, however, much of the country’s establishment “does not recognize mental health issues as medical issues,” and therefore “it has not been assimilated into the healthcare system.”
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In India – where there is one psychiatrist per 500,000 people and only one psychiatric nurse per 2 million, according to World Health Organization figures – faith healers are commonplace. “Apart from the most serious cases of schizophrenia and violent psychosis, those suffering comparatively less severe mental health problems like depression and anxiety have nowhere to go, nor will they receive much in the way of understanding.” Except, that is, in the form of a local faith healer. Christopher Davis, an anthropologist at the University of London’s School of Oriental and African Studies (SOAS), said traditional healers can play a role as mental health providers. “Anthropologists would argue that regarding faith healers as a less appropriate choice than physicians is a reflection of our own faith in medicine rather than in community as a way of finding a remedy for life’s problems,” she said. Davis argues that what makes people more prone to mental health problems is subjection to “structural violence” -- exposure to extreme political, economic or social hardship. Or put more simply: “Living in conditions where it is impossible to make ends meet takes its toll,” she said.
In Raba’s experience, there continues to be widespread abuses committed by faithhealing “charlatans” offering quick fixes at extortionate prices. Yet, the mental health activist refuses to condemn the practice as a whole. “More often than not, they’re better than nothing,” she said. “A decent faith healer will at least provide an attentive ear and a much less threatening environment than a state hospital for people to express their problems. “Even if the diagnosis is not accurate, this process can often create a useful placebo effect.” Raba said that faith healers tend to be well versed in Ayurveda, a field of indigenous medicine that focuses on lifestyle habits such as diet and fitness. “Sometimes chanting a mantra, performing a small ceremonial ritual, prescribing some herbs and instructing a healthier diet is all that it takes to reduce the symptoms of certain mental health problems,” she said.
Some research even suggests we feel more happiness when we spend on others than when we spend on ourselves. Even if they’re not aware of these findings, there could be other factors that cause the Albany Seven to share their winnings with their less lucky colleagues. For one thing, people are significantly more likely to show altruism toward members of their own “group” or “team,” perhaps because we identify with members of our own group more than others, and there’s a greater chance we’ll count on them to return the favor down the line. Co-workers are a good example of such a team, especially in this case, where co-
workers pooled their money on the same lottery “team” for years. Generosity also stems from our deeply rooted sense of fairness. Though we often lament humans’ selfishness, a great deal of research shows that we’re often willing to share a prize with others, especially when there’s reason to believe they deserve at least part of that prize. This is true even among young children. In a recent study out of Harvard, pairs of 3-year-old kids had to work together to obtain a prize, but only one of the two kids on each team actually got his or her hands on it. Still, that prize winner was overwhelmingly likely to share the prize with the part-
ner, even though he or she didn’t have to do so. These kids seemed guided by a strong, perhaps innate, drive toward fairness and cooperation. Deep down, they knew they should share their spoils – and the Albany Seven might be influenced by the same magnanimous impulses. But this doesn’t mean that they will be. There are definitely some psychological forces working in the opposite direction. For example, in general, research shows that people (incorrectly) assume more money – and more spending on themselves – will make them happier. And research also shows that when we receive an unexpected gift, we often rationalize our
good fortune by telling ourselves that we somehow deserve it. But studies also suggest this way of thinking is a quick ticket to unhappiness. Instead, they show that people are significantly happier when they practice gratitude – when they recognize and appreciate that the gifts they receive in life come from outside themselves, whether through the help of other people, a higher power or plain dumb luck. Albany Seven, take note: Grateful people are happier, enjoy better health and have stronger relationships. And what better way to appreciate a gift than to pay it forward?
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Living DESKTOP COMPUTER Lose it. You may have one now, but are you really going to replace that deskbound PC when it becomes out of date? Assuming you are not a hardcore gamer or a video editor, laptops have all the necessary computing power the average user needs. If you want to replicate that desktop experience, you can always connect your laptop to a larger display and keyboard.
now is probably the last one you will own.
USB THUMB DRIVE
Lose it. File sharing does not require hardware anymore. In almost any case you can think of, you can move files around digitally via the Internet. That could mean signing up for a service like Dropbox, which creates a private, shareable hard drive in the cloud, or by simply e-mailing yourself attachments and storing them in the drafts folder of Gmail, Yahoo Mail, etc. A USB drive is just something to misplace or break.
HIGH-SPEED INTERNET AT HOME Keep it. With the
advent of devices like the MiFi, which converts a 3G mobile signal into a Wi-Fi cloud for multiple devices to share, you might be thinking about giving your Internet service provider the boot and using your cellphone as your Internet connection, even when at home. That would work — provided that you get a strong data signal where you live; and that you have an unlimited data plan from your wireless provider. Given all these caveats, it probably makes more sense
DIGITAL MUSIC PLAYER Lose it (probably). Do you have a smartphone? Then you have a music player. Why load yourself down with an extra gadget? Apple popularized the music player with its iPod, but when was the last time you saw that iconic white box with the dial on the front? Music is data, and many multifunction devices can han-
GADGETS You Should Get Rid Of (or Not) What Gadgets Do You Want to Get Rid Of? And so we no longer need to accumulate products. If anything, we can cut down. The question is, Which can be replaced and which are fine, or even preferable, to keep? It is plain as day that paper maps and Rolodexes have given way to their digital counterparts. But what else can you get rid of? Here is a list of common consumer technologies and products and a somewhat opinionated judgment on whether to keep or pitch it.
to stick with your I.S.P.
CABLE TV Depends. While you may and should hold on to a good broadband connection at home, it is debatable whether you need to pay for cable TV. Sports fans probably will want to keep it, as many leagues restrict online content, but casual viewers who mainly want some shows and movies to watch could get by with a good Internet connection and some low-cost subscriptions to services like Netflix, Hulu Plus and Amazon Instant Video. POINT-AND-SHOOT CAMERA Lose it. Yes, a dedicated camera will probably take a better picture than the small lens and image sensor of a smartphone, but it will not be that much better. And a pointand-shoot has limitations of its own. It is hard to share photos until you have transferred them to your computer, and there are no apps for cameras, as there are for smartphones, that allow you to quickly apply cool filters and treatments to the shots you took. CAMCORDER Lose it. Camcorders get squeezed at both ends of the video spectrum. On the low end, smartphones can capture video, and while it may not be Imax quality, many people do not care. At the high end, new digital S.L.R. cameras (like Canon’s EOS Rebel T1i, which costs around $750 with a lens) can shoot full-HD video while taking advantage of all the interchangeable lenses that were created for still photography. That camcorder you have
dle it along with many other kinds of data (like video, e-mail and apps). The one exception may be if you enjoy music while exercising. In that case, a tiny player like the $49 iPod Shuffle might be a better accessory than a larger, heavier smartphone.
ALARM CLOCK Keep it. Smartphones can be terrific alarm clocks. They can ramp up the volume gradually, display weather information and awaken you to your favorite song. And when on the road, they are still light-years ahead of the incomprehensible alarm clocks in hotel rooms. But a recent daylight time glitch in iPhones that fouled up the clock could give some early risers pause. Furthermore, setting and resetting smartphone alarms may require a dive into one submenu too many; turning a little knob on the back of a clock and flipping a switch is still simplicity itself. GPS UNIT Lose it. The least expensive GPS units cost around $80. But your smartphone can do the same thing, if not more, for half that price, or even free. Android smartphones already have Google’s turn-by-turn navigation app built in. BOOKS
Keep them (with one exception). Yes, e-readers are amazing, and yes, they will probably become a more dominant reading platform over time, but consider this about a book: It has a terrific, high-resolution display. It is pretty durable; you could get it a little wet and all would not be lost. It has tremendous battery life. It is often inexpensive enough that, if you misplaced it, you would not be too upset. You can even borrow them free at sites called libraries.
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Health An Older Generation Falls Prey to Eating Disorders More than 10 million Americans suffer from anorexia, bulimia and other eating disorders. And while people tend to think such problems are limited to adolescence and young adulthood, Judith Shaw knows otherwise. A 58-year-old yoga instructor in St. Louis, Ms. Shaw says she was nearing 40 when she decided to “get healthy” after having children. Soon, diet and exercise became an obsession. “I was looking for something to validate myself,” she told me. “Somehow, the weight loss, and getting harder and firmer and trimmer and fitter, and then getting recognized for that, was fulfilling a need.” Experts say that while eating disorders are first diagnosed mainly in young people, more and more women are showing up at their clinics in midlife or even older. Some had eating disorders early in life and have relapsed, but a significant minority first develop symptoms in middle age. (Women with such disorders outnumber men by 10 to 1.) Cynthia M. Bulik, director of the Eating Disorders Program at the University of North Carolina, Chapel Hill, says that though it was initially aimed at adolescents, since 2003 half of its patients have been adults. “We’re hearing from women, no matter how old they are, that they still have to achieve this societal ideal of thinness and perfection,” she said. “Even in their 50s and 60s — and, believe it or not, beyond — women are engaging in extreme weight- and shapecontrol behaviors.”
ing, doctors typically raise questions about weight and eating habits. But in Ms. Shaw’s case, they assumed it was early menopause. When she developed anemia and osteoporosis, they didn’t guess that the true cause was years of malnourishment. And though one doctor suggested that Ms. Shaw looked as if she needed to “eat a cheeseburger,” most praised her efforts to keep her weight down and her commitment to exercise. “One of the things we’re working very hard to do is to make sure this stays on physicians’ radar screens so they can recognize and distinguish between menopause-related changes, real health problems and eating disorders,” Dr. Bulik said. “Often they don’t ask the question because they have in their mind this stereotypical picture of eating disorders as a problem of white, middle-class teenagers.” “None of my friends, my exhusband, no one ever said anything,” she said. “It was no one’s job to fix me, but I wish someone had said to me: ‘I miss you. You’re gone. You’re so obsessed.’ ”
Experts say that while eating disorders are first diagnosed mainly in young people, more and more women are showing up at their clinics in midlife or even older.
Younger or older, patients tend to engage in the same destructive behaviors: restricted eating, laxative abuse, excessive exercise and binge eating. And the trigger is often a stressful transition — in a young person, perhaps going away to college or living through her parents’ divorce; in later years, having a baby, sending a child to college or going through her own divorce. When a thin adolescent stops menstruat-
Finally, a yoga instructor sounded the alarm after Ms. Shaw had twice fallen, breaking an elbow and then later her pelvis. “There’s nothing left of you,” the instructor told her. “Only you can decide if you’re going to change that by feeding yourself.” At 53, carrying just 85 pounds on her 5-foot-3 frame, Ms. Shaw checked herself in to an eating disorders program. Later, she created a plaster cast of her thighs. Like many others with anorexia, she had thought her legs were too big; now she could see how thin she had become. Others see the problem in themselves. “In the course of my day, I can spot it,” she said. “I am 25 to 30 pounds heavier, but I feel lighter. The weight of those emotions is what it was really all about.”
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(LA Times)
Breakfast Cereals Play Role in Lower Heart Risk High intake of whole-grain cereal is linked to a lower risk of high blood pressure and hefty helpings of dietary fiber are linked to a lower risk of heart disease, especially for young and middleaged adults, new studies show. Breakfast cereal, in particular, may be an important way to fill up on both whole grains and dietary fiber. A study that looked at cereal consumption among 13,368 men who are participating in the Physician’s Health Study found that those who ate whole-grain cereals seven or more times a week had a 20% reduced chance of having high blood pressure compared to those who said they didn’t eat any cereal. Even averaging a single bowl of cereal each week appeared to be protective, dropping the risk of high blood pressure by 11%. Independent experts agree that cereal can be a top food choice. But they say it’s still important to read labels to make sure you’re not getting hidden surprises. “Presumably, the ‘whole grain’ cereals that conferred the most benefit in this study provided more nutrient benefits in the form of vitamins and fiber than liability in the form of sodium and sugar. That’s not true of all cereals, however,” says David Katz, MD, MPH, director of the Yale University Prevention Research Center.
“Whole-grain consumption has been shown to decrease the harmful effect of the bad fat that you eat on the endothelium, the lining of blood vessels,” says study researcher Jinesh Kochar, MD, a gerontologist and a clinical fellow in medicine Beth Israel Deaconess Medical Center in Boston. “It’s also been shown to decrease the risk of diabetes -about 40% decreased risk in those who get the recommended amounts of whole grains.” “I think there’s strong biological data to support what we are seeing in this population-based study,” Kochar says. Hongyan Ning, MD, a statistical analyst in the department of preventive medicine at Northwestern University’s Feinberg School of Medicine, says fiber has been shown to reduce heart risk in many different ways. “Fiber has been shown to lower blood pressure, cholesterol levels, and lower BMI [body mass index],” Ning says. “Our study would seem to show the collected effect of all those benefits.” Only 17% of the people in Ning’s study, however, got the recommended daily amount of fiber.
Cereals That Measure Up Breakfast cereals can be an important way to get to the daily goal, as long as they’re high in fiber and low in sugar and sodium. “We didn’t have any specific information on brands, but we did have categories of cereal -- whole grain vs. rewww.prop-arazzi.com fined gain,” says study researchA second study, of more er Jinesh Kochar, MD, a gerontolothan 11,000 Americans who gist and a clinical fellow in medicine at participated in the National Health Beth Israel Deaconess Medical Center. and Nutrition Surveys (NHANES) beKochar’s study found those who reported eattween 2003 and 2008, found that young and miding cereals made with refined grains had a slightdle-aged adults who reported the highest intakes ly lower risk of developing high blood pressure, but of daily dietary fiber, averaging 22 to 23 grams a it wasn’t statistically significant after the researchday, were significantly more likely to be at low risk ers tried to rule out other factors known to influfor heart disease, compared to those who ate an ence hypertension risk, like regular exercise, fruit average of 9 grams of dietary fiber daily. The same and vegetable consumption and smoking. didn’t appear to hold true for adults over age 60, He also says that the study wasn’t designed to however. show cause and effect, so researchers can only reKatz says there are several possible explanations port that they saw an association between cereal as to why seniors who didn’t eat high amounts of fiand high blood pressure. ber didn’t also have a drop in heart risk. “I think the take-home message with this is that “The lack of benefit in older people may be of the whole-grain breakfast cereal consumption, along ‘too little, too late’ variety,” Katz says. “Another poswith certain lifestyle factors, moderation in salt sibility is that even if a high-fiber intake helps proand calories, and getting regular physical activity tect your blood vessels from premature atheroscle-- all of those things are likely to reduce your risk rosis, the process may yet occur, just slower.” of hypertension,” Kochar says. (WBMed)
Does the Mediterranean Diet Even Exist? Studies at Harvard and elsewhere correlate the Mediterranean diet with lower rates of heart disease, diabetes and depression.
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n Europe and the United States, the so-called Mediterranean diet — rich in olive oil, whole grains, fish, fruits and vegetables and wine — is a multibilliondollar global brand, encompassing everything from hummus to package trips to Italy, where “enogastronomic tourism” rakes in as much as five billion euros a year. Studies at Harvard and elsewhere correlate the Mediterranean diet with lower rates of heart disease, diabetes and depression. In America, health gurus like Mehmet Oz exhort followers to “eat like a Greek.” But according to data from the United Nations Food and Agriculture Organization, Mediterranean people have some of the worst diets in Europe, and the Greeks are the fattest: about 75 percent of the Greek population is overweight. So if the Mediterranean diet is not what people in the Mediterranean eat, then what is it? Before there was a Mediterranean diet, there was WWII and the food shortages that went along with it. When the fighting was over, Haqvin Mamrol, a researcher in Sweden, showed that mortality from coronary disease declined in Northern European countries during the war. This was, he believed, the result of wartime restrictions on milk, butter, eggs and meat. At about the same time, a Minnesota scientist
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do not. In some regions, people made pesto with lard, not olive oil. “There is no such thing called the Mediterranean diet; there are Mediterranean diets,” says Rami Zurayk, an agriculture professor at the American University in Beirut. “They share some commonalities — there is a lot of fruits and vegetables, there is a lot of fresh produce in them, they are eaten in small dishes, there is less meat in them. These are common characteristics, but there are many different Mediterranean diets.”
Mediterranean diet: rich in olive oil, whole grains, fish, fruits and vegetables and wine
According to data from the United Nations Food and Agriculture Organization, Mediterranean people have some of the worst diets in Europe, and the Greeks are the fattest: about 75 percent of the Greek population is overweight. named Ancel Keys, who had been studying the effects of starvation on a group of volunteer subjects, moved on to study the diets of Midwestern businessmen. He found that these well-fed Americans were more prone to heart disease than were men in wardeprived Northern Europe. Keys postulated that saturated fats led to high levels of cholesterol and from there to cardiovascular dis-
ease. To prove it, he initiated a long-term study in seven countries, including Italy and Greece. He concluded that we should cut down drastically on saturated fat and turn to vegetable oils instead. Keys and his wife wrote two best sellers that changed the way Americans ate. The Mediterranean diet was always a composite. Spaniards love pork; Egyptians, as a rule,
The healthy versions of these diets do have one other thing in common: they are what the Italians called “cucina povera,” the “food of the poor.” In Ancel Keys’s day, Mediterraneans ate lentils instead of meat because they had no choice. “A lot of it is to do with poverty, not geography,” says Sami Zubaida, a leading scholar on food and culture. Last year, Unesco added the Mediterranean diet to its list of the world’s great intangible cultural treasures in need of safeguarding. Today, more than half the populations of Italy, Portugal and Spain are overweight. In Eastern Mediterranean countries like Lebanon, obesity is growing — especially among the young, an increasing number of whom are happy to trade their eggplants for French fries and milkshakes at Roadster. (NYT)