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Soebronto Laras:
Improving Infrastructure More Important than Producing Fuel-efficient Cars
T
he automotive sector plays an important role in driving Indonesia’s economy. Global automotive industry finds Indonesia’s vast market very lucrative after China because the country has the biggest population in Southeast Asia. In terms of domestic sales in Asean countries, Indonesia enjoyed a 30.6% market share, slightly behind Thailand with 32% followed by Malaysia in third place with 24.2%. Indonesia is a lucrative market for automotive products due to its renarkable economic growth, low inflation and stable interest rates. Car sales growth in the country is expected to soar by 50% over the next five years. Subronto Laras, who successfully made Suzuki a big name in Indonesia, recently expressed his views to The President Post about the future of Indonesia’s automotive industry. The following are excerpts of the interview: What’s your opinion about the innovation of fuel-efficient cars? Many manufacturers have been designing fuel-efficient cars over the past few years by adopting the hybrid system. On the other hand, several other car manufacturers, for instance luxury cars, use TDI-Turbodiesel Injection and this is also an innovation of fuel-efficient cars. But these cars can run fast when needed because they are equipped with turbo machines. I think hybrid cars will sell out in the future. Aside from being fuel-efficient, hybrid cars are also environmentally-friendly. As for hydrogen and water-fueled cars, Indonesia is unlikely to get it any time soon. Right now, the government has a program that calls for the use of CNG (compressed natural gas) or popularly known as BBG because it’s very cost-effective. The government is even planning to offer subsidy for the purchase of the converter. What about Green Cars? Green Car or Low Cost or also called Economy Car will become a concept that world car manufacturers, including Indonesia, will adopt in the future. The fuelefficient car will use 22km/liter fuel and will become an environmentally-friendly and affordable car. Most of them will use below 1,200cc-engine .
Why hasn’t Indonesia become a market leader in Asia? The country’s biggest problem, in my opinion, is that infrastructure across the board is still not in place. Moreover, we are a country that always seems to be skeptical and unfocused; still lulled by our good fortune in we are blessed with that we want to do everything at once. This makes us to lose focus. If the market is our main focus, and we have a population of more than 240 million, that’s an extraordinarily big target market, especially since we will be entering the Asean free trade area in 2015. We need to also look at the people’s purchasing power. Our GDP has recently reached Rp3.7 million, which is of course still way below that of our neighboring countries such as Singapore, Malaysia, and Thailand. To strengthen our country’s economy, the private sector and the government need to cooperate or synergize.
The country’s biggest problem, in my opinion, is that infrastructure across the board is still not in place. Subronto Laras
What’s your opinion about the traffic congestion in Jakarta and the lack of safe and convenient mass transportation that force people to eventually resort to two-wheeled vehicles? The number of motor cycle users in Indonesia has now reached 60-70 million and their fuel consumption is definitely lower than four-wheeled vehicles. But this eventually became a boomerang. Too many two-wheeled vehicles had caused the traffic congestion to become worse because they drive as they like and they don’t pay attention to traffic regulations. What’s your opinion about Indonesia’s human resources? Our human resources are generally good as they have good skills. They are as good as that of other countries’. How many million workers are absorbed by our automotive industry? Many, because the automotive sector needs many workers. They are needed to make main components, in the supporting industry and in other divisions such as marketing, and many more. One car factory has at least 200 sub-contractors. The motorcycle industry needs even more. It’s small but it’s labor-intensive. Car factories also get some help from
robots (machines), for instance, to paint the body. As for motorcycles, each part is done by a human being. What’s your opinion about the future of Indonesia’s automotive industry? I have a few notes on this subject. First of all, Indonesia has to improve its infrastructure. It would be pointless to have fuel-efficient cars if the traffic is still congested. Secondly, the Indonesian people in general have a big family. They tend to buy a comfortable mini buses for their family. Thirdly, the safety factor. City cars will not offer comfort and safety on the road given the reckless driving behavior of truck or bigger car drivers, not to mention other problems such as floods and others. So, mini buses such as Avanza, Xenia, Suzuki Ertiga, which will soon be launched, will continue to be the choice of the Indonesian people over the next five years. Indonesia will also become the production base for 7-seater cars that will use local contents. Another example is Suzuki APV, a vehicle with an Indonesian design, in the sense that the design was tailor-made for the need of the Indonesian people which mostly have a big family. 80% of the car’s components are locally made.
The President Post/Heros Barasakti
BUSINESS
Freeport Urged to Divest 51% of Shares to Indonesia
Currently, the Indonesian government holds only 9.36% of Freeport shares, which it has held since the working contract with Freeport was first signed in 1967. PAGE B2
INTERNATIONAL
The 3rd Pasar Malam Indonesia Promotes “New Indonesia” to Dutch Community
Pasar Malam Indonesia 2012 attracts more than 8.500 visitors, both local Dutch and Indonesian to enjoy the authentic taste of Indonesian cuisine. PAGE B7
TECHNOLOGY
iMulai 4.0 Raising Indonesian IT Startups
LIVING
Who Gets More Vacation Days?
The event is in its fourth year, and intends to encourage Indonesian startups to submit their ideas for new products or new services that can help entrepreneurs do business.
Germany, France, Spain and Denmark top the list with 30 paid vacation days, while the Netherlands, Sweden, Norway and the UK come in second with 25 days.
PAGE B8
PAGE C6
Five RI BUMNs To Go Public Investors generally prefer and target IPO shares of stateowned companies, as well as "shares of large state-owned companies." State enterprises minister Dahlan Iskan has said five BUMNs (state-owned companies) would conduct an IPO (initial public offering) of stocks this year. "One of the companies is cement producer PT Semen Baturaja," he said at the Indonesia Stock Exchange here on Wednesday. Four other companies that are to go public are subsidiaries of state-owned companies. "I could not as yet announce their names, but I could say with certainty they would conduct an IPO this year," he said. He further said the decision to list the companies was made so that the parent companies would not have to tightly control them. He added that through an IPO there would be other institutions that would control them, besides the parent companies. "Control of them would be more open, so the parent companies need not control them as much since there will be other parties that would also manage them," he said. The president director of the Indonesia Stock Exchange, Ito Warsito, had recently expressed hope that the government would en-
I could not as yet announce their names, but I could say with certainty they would conduct an IPO this year." Dahlan Iskan State Enterprises Minister courage state-owned companies to list their shares at the stock exchange to draw foreign funds to the country. "The IPO of state-owned companies is expected to become a way of collecting investment funds for infrastructure development," he said. Research analyst of PT Panin Sekuritas Tbk., Purwoko Sartono, said investors generally prefer and target IPO shares of state-owned companies, as well as "shares of large state-owned companies."
The IPO of stateowned companies is expected to become a way of collecting investment funds for infrastructure development," Ito Warsito The President Director of The Indonesia Stock Exchange
The President Post
A2 March 12, 2012
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Opinion Asean and the Global Economic Community ASEAN as a grouping has grown in its economic GDP size coupled with high economic growth, one of the highest in the global economy. This should strengthen ASEAN’s position not only in East Asia but also in the global economy. ASEAN is certainly able to expand the numerous cooperation programs with its many dialogue partners.
Figure 1. Economic Architecture of Regional and Trans-regional Forum
Figure 3. Economic Statistical Data Rank
APEC
ASEM
Russian Federation Europian Union (27 member countries)
Canada
EAS
ASEAN
United States Mexico
Philippines
By Atmono Suryo
U
ASEAN THEME
nder Indonesia’s chairmanship last year, 2011, the theme was “ASEAN in a global community of nations”. To that end, the Bali Declaration called “Bali Concord III” was issued outlining in very broad terms ASEAN cooperation in the area of Political-Security, Economic and Socio-Cultural. It seems that this is the very first attempt by ASEAN to identify the various issues which may come up under ASEAN’s objective, “to go global”. It is recognized by ASEAN that it concerns a complex, multifaceted, and trans-national character of issues and challenges and opportunities, requiring concerted and coordinated responses. At this stage one can only wonder (in very simple terms) how ASEAN’s theme can be implemented, particularly in ASEAN’s surrounding regions, namely the East Asian region and the larger Asia Pacific region.
Enhanced role
Frankly, it is still difficult to know what ASEAN intends to do in the global community of nations. But one thing seems to be clear, namely that it all means that ASEAN intends to play an active and an enhanced economic and political role in the regional and global community of nations. How difficult that may be. Of course, there will be different views and suggestions on this matter. Many observers would emphasize that it would not be easy to have a common view within ASEAN on regional and global issues, particularly on political and strategic issues. This is already happening on the question of the South China Sea and on the role of the great powers in Asia. The only policy direction given is the need for a “dynamic equilibrium” without further explanation.
Chile
Malaysia
Lao PDR
In the area of economics, however, the policies and the road ahead are more apparent. The economic views and basic policies within ASEAN are not too divergent. ASEAN’s economic agenda already contains a large number of items and are ready to be implemented.
Peru
Thailand
Myanmar
ASEAN ECONOMIC DIRECTION
Singapore
Cambodia
Taipei, China Hong Kong, China
Indonesia
Japan
Vietnam Republic of Korea
People’s Republic of China
Australia New Zealand
Mongolia
Palau FSM Marshall Is. Kiribati
Papua New Guinea
India Pakistan
Kazakhstan
The Bali Concord III, however, mentions additional areas of importance, namely to strengthen ASEAN’s capacity into becoming a more dynamic and stronger segment of the global supply chain. This question of supply chain is an area which is not well-known in Indonesia. In countries in East Asia this supply chain is already practiced to a very large extent, especially by China. The Bali Concord III also stresses the need for ASEAN to enhance collaboration to reform the international financial architecture and the continued active participation of ASEAN in the G-20. It also suggests for closer cooperation in the area of food and sustainability of global energy.
ASEAN+3
Brunei Darussalam
Uzbekistan
CAREC
SAARC
Afghanistan
Azerbaijan
PIF
Nepal
Maldives
Tajikistan
Solomon Is.
Bhutan Sri Lanka
78,360,000
-
European Union
18,930,000
-
United States
14,330,000
-
ASEAN
1
Indonesia
496,800
2
Thailand
272,100
3
Malaysia
214,700
4
Singapore
192,800
5
Philippines
186,000
6
Vietnam
90,880
7
Brunei
17,180
8
Burma
13,700
9
Cambodia
10,820
1,486,467
Laos
5,187
Fiji Is.
Bangladesh
The East Asian economy has changed almost completely with the emergence of China and India, which are now in the lead in the East Asia region. In addition Japan and the so-called Asian tigers such as South Korea, Taiwan, Hong Kong/China and Singapore are still strongly present in the region although Japan is undergoing a decline in their economy, surpassed by China.
Source: ASEAN Secretariat; ASEM – Asia-Europe Meeting; CAREC – Central Asia Regional Economic Cooperation; PIF – Pacific Islands Forum; SAARC – South Asian Association for Regional Cooperation
Figure 2. ASEAN and the Global Economy (economic size)
$4,985b $1,310b
$832b ROK
China
$5,068b Japan
India
LAOS
THAILAND
It must be appreciated that throughout many years ASEAN has developed various kinds of economic linkages with many countries. These linkages were done through various dialogues, forums and partnerships.
PHILIPPINES
BRUNEI
$14,119b
MALAYSIA
US
But one should also not underrate ASEAN’s development as a regional entity. An important point to note in the area of economics is that with its strategic location, its natural resources, ample human resources and growing economies, ASEAN is already linked economically with the global economy, particularly with heavyweights of the world economy such as the European Union (EU), USA, China, Japan, India and Russia.
VIETNAM
CAMBODIA
$1,499b ASEAN
SINGAPORE INDONESIA
Economic architecture
As can be seen from Figure 1, in the area of economics ASEAN’s activities have formed main informal “architecture”.
$16,213b
ASEAN
EU $1,051b AUS & NZ
SUGGESTIONS TO BE IMPLEMENTED IN STAGES
There are, no doubt, various options to implement ASEAN’s theme in the global community of nations. In the area of economics it is suggested to take the road to the global economic community through three stages as follows: • The first stage is to implement and strengthen the ASEAN Community concept by 2015;
World
GROWING “POWERHOUSE”
MYANMAR
it is of extreme importance that Indonesia should become a key player and not a reluctant participant (as people suspect); • To define in greater detail where East Asia should be going. Covering some 13 countries, namely the 10 ASEAN countries plus
China, Japan and South Korea, the key question is which road should East Asia take: to promote closer economic integration, in a rather loose fashion or would it be possible to establish at once an East Asian Economic Community composed of the
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13 countries? • When the times comes, to develop and implement in stages the larger regional East Asia Economic Cooperation concept; to include USA, Russia, India, Australia and New Zealand with ASEAN at center stage.
What is most astonishing is the fact that ASEAN as a grouping has grown in its economic GDP size coupled with high economic growth, one of the highest in the global economy. This should strengthen ASEAN’s position not only in East Asia but also in the global economy. ASEAN is certainly able to expand the numerous cooperation programs with its many dialogue partners. ASEAN combined (as one entity) has become the 5th larg-
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OFFICE Menara Batavia 25th Fl. Jl. K.H. Mas Mansyur Kav. 126 Jakarta 10220, Indonesia Phone : (021) 572 7337 Fax : (021) 572 7338 Email : ceo@thepresidentpost.com Web : www.thepresidentpost.com
Enhanced role of Indonesia
As can be seen from the statistical data Indonesia is the largest economy in South East Asia, followed by Thailand, Malaysia, Singapore and the Philippines (Figure 3). This position gives added strength but also added responsibility to Indonesia. There is the impression that the question of ASEAN does not receive the wholehearted support of the Indonesian society, including the business community. There is apparently the need for Indonesia to undergo a more positive mind-set towards ASEAN along the following lines: the strengthening of ASEAN would inevitably also enforce Indonesia’s position in the regional and global setting. (To be followed by Part 2) The writer is former ambassador to the EU
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On top of it ASEAN has gained strategic weight. It has attracted the increasing attention of global players. This is apparent by the fact that 55 countries have appointed their envoys to ASEAN and the number is growing. It shows that the world community looks at ASEAN as a growing powerhouse, not only economically but also politically and in a way also strategically as a stabilizing force in East Asia.
Menara Batavia 25th Floor Jl. K.H. Mas Mansyur Kav. 126 Jakarta 10220, Indonesia Phone: +62 21 572 7337 Fax.: +62 21 572 7338 Email: circulation@thepresidentpost.com
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est economic “powerhouse” in the global economy along the following order: 1. EU 2. USA 3.Japan 4. China 5. ASEAN 6. India 7. Australia - New Zealand (Figure 2).
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March 12, 2012 A3
Perspective Investment Flows to Indonesia Investment should become one of the key engines of growth for Indonesia. This should be done urgently to strengthen Indonesia’s “investment flows position” in the global and regional economy. By Atmono Suryo
I
CURRENT TRENDS
t is most encouraging for developing countries, including Indonesia, to observe that despite the turmoil in the global economy, global FDI (foreign direct investment) flows will be rising, estimated by UNCTAD to reach $1.5 trillion, surpassing the pre-crisis level to reach around $1.6-1.7 trillion in 2012 and $1.9 trillion in 2013. This upward trend will be beneficial for the developing countries, including Indonesia (Figure 1).
Changing trends
As it becomes urgent for Indonesia to achieve a greater inflow of FDI, it is important for the country (the government and the business society) to realize that global investment flows is in the process of change. During the years 2009-2010 some of the advanced countries are still in the top 20 host economies, namely United States, Belgium, United Kingdom, France and Australia. It is expected that they will continue to be among the main recipient countries, especially the US. But a number of developing economies are moving up fast such as China, Brazil, Singapore, Saudi Arabia, India, Mex-
ico, Chile and Indonesia. These emerging countries now belong to the top 20 host economies, composed of developed and developing countries. Developing and transition economies account for half of global FDI in 2011, estimated to have reached a new record high of $755 billion, with East Asia, including South East Asia, to be the best performers as recipients. But aside from East Asia, Latin America and the Caribbean economies are also making increasing flows. Also, the transition economies (of South-East Europe and the Commonwealth of Independent States (CIS). Africa, which is the region with the most LDC’s (least developed countries), continues its decline in FDI inflows. The top recepient countries (among the developing countries) are as follows: China, Hong Kong - China, Brazil, Singapore, India, Indonesia, Chile, Mexico, Colombia, Turkey, and Malaysia. It is important for Indonesia to continue to be among the top 10 host economies. It cannot afford to be pushed aside by other developing countries, which can provide better, more conducive investment climate.
INDONESIA NEEDS TO ENSURE LARGE INFLOWS
It is not only Indonesia which needs the inflow of FDI’s. In addition to portfolio investment,
Indonesia FDI USD bn 35 29 Realized FDI 22
Projected FDI 16
14.9
5
4.6
2004
10.8
10.3
8.9
12.6
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Source: BKPM
which is doing very well in Indonesia, more and more developing countries are in need of investment flows. Not only in East Asia, including ASEAN countries, but also Latin American countries and the Carribeans and the transitional countries of South East Europe as well. Competition among the developing countries to attract foreign investment will increase.
•
•
• It goes without saying that Indonesia needs to ensure the continuous large flows of FDI (foreign direct investments) for the following reasons: • FDI is a source of economic development and modernization, recognized increasingly by all developing countries, even among communist or former
•
communist countries such as China, Russia and Vietnam; It is an important driving force in the economic growth of the country, aimed by Indonesia to reach 6% and up; It has shown in practice that FDI provides job-creation for countries like, China, Brazil, Mexico and many other countries in East Asia and LatinAmerica; FDI brings transfer of technology and productivity gains which are needed by the developing countries, in particular countries like Indonesia which are still weak in those areas; Foreign investment provides additional capital on top of domestic investment, and gives additional income for the government;
• FDI assists in the development of employment opportunities (job creation), an issue which has high political-social ramifications, particularly in Indonesia; • FDI projects, which include the establishment of factories, services industries, infrastructure projects, processing plants, and others, will enlarge the country’s total GDP. The following data reflects BKPM estimates for the years 2010-2014. It shows the upward trend from $16b in 2011 to $35b in 2014.
NEED TO REMOVE ALL OBSTACLES
Although Indonesia is considered as one of the potential coun-
tries, it has its many weak points. Indonesia’s investment environment is facing a high number of hindering factors. This is happening in the following areas: a. In the area of “Infrastructure quality” Indonesia ranks one of the lowest among 133 countries. In the area of ports Indonesia ranks 95; electricity supply 96, roads 94. All this shows the incredible low position of the country’s infrastructure. b. In the area of “Ease of Doing Business” Indonesia also ranks one of the worst countries. It ranks 122 out of 133 countries (Thailand 12 – Malaysia 23 – Vietnam 93). It concerns the question of extremely low bureaucracy, weak law enforcement, enormous cases of grafts and corruption etc. c. With regard to global competitiveness Indonesia’s ranking is also among the lowest. Countries like Malaysia, Thailand and India have higher ranking than Indonesia. Among the ASEAN countries, only Vietnam and the Philippines are worse off. d. Another weakness hindering the inflows of FDI is domestic social-politics. Frequent political turmoils and violent mass demonstrations are on the increase and are considered as threats to foreign companies. d. In addition, political views on the increasing flow of foreign investments is recently hardening. There is the fear that foreign enterprises will be dominating the economic environment in the country. There is the risk that “anti-foreign”
sentiment is on the rise, with its adverse consequences. f. It becomes urgent to support to the fullest extent the development and growth of domestic investment and domestic business. Such policies deserve high priority. There is the urgency for Indonesia to solve the many problems and obstacles hindering the growth of investments: domestic and foreign investments with the objective to beef up Indonesia’s productive capacity.
CONCLUDING REMARKS
The global investment structures are in the process of fundamental changes. Being one of the potential economies in the global economy for the inflow of FDI’s, these new trends can open up new opportunities for Indonesia to boost the inflow of FDI’s. Indonesia should take full advantage of the new trends, as it is urgent for the country to ensure the big flow of FDI’s to complement and to serve as an addition to domestic investment which ought to be strengthened to the maximum. Indonesia, however, has an enormous task to solve the many factors and obstacles which can seriously hinder the growth of foreign and domestic investment. Investment should become one of the key engines of growth for Indonesia. This should be done urgently to strengthen Indonesia’s “investment flows position” in the global and regional economy. The writer is former ambassador to the EU
The President Post
A4 March 12, 2012
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Economic Highlights Rising Fuel Price and Inflation Uncertainty The parliamentary decision to postpone the BBM price hike might cost Indonesia from getting the investment grade upgrade by S&P. By Dian Ayu Yustina and Anton H. Gunawan
House Plenary Meeting’s Drama: A clash of political interests
T
he plenary meeting of the parliament (DPR) held on the last Friday of March and lasted more than 14 hours resulted in two main decisions: (1)No subsidized fuel (BBM) price hike in April 1st, and (2) a conditional right given to the government to change the subsidized fuel (BBM) price directly (without having to get approval from the DPR) this year if the last 6-month average of the ICP (Indonesia Crude Price) deviates more than 15% from its current budgetary assumption (US$ 105/barrel), listed in Article 7 Point 6a of the newly revised budget law. All nine fractions in the DPR at last agreed NOT to hike the BBM price on April 1st, but four factions (PDI-P, Gerindra, Hanura and PKS) rejected to give that conditional right to the government. The voting result was 356 votes for vs 82 votes against, and some members of parliament from Hanura, Gerindra and PDI-P walked out when the voting was on progress. Golkar party got what they wanted, while the Democratic Party/the government was the loser. What had originally been a debate on economic policy, the pro-
posal to hike the BBM price was transformed into a political issue, as tension rises between the political parties. The government’s plan to raise the subsidized fuel price to reduce its negative impact on the government budget and to reallocate spending into a more productive use quickly turned into a political issue. Just a few days before the DPR plenary meeting, the government and its coalition parties were still confident on the odds of the parliament agreeing on the subsidized fuel price hike, despite some doubts on few political parties (i.e. PKS, PPP) in the coalition. However, at the plenary meeting, Golkar Party (also in the coalition with a significant vote in the parliament) suddenly turned their back on the government and disagreed on the fuel price hike in April 1st. This step was also quickly followed by another smaller political party in the coalition, PKS, amid massive demonstration of labor unions and students demanding “no fuel price hike”, in several big cities (including and primarily in front of the DPR building during the plenary meeting), that mostly ended up in small and sporadic riots. Another sticky issue, clouded by political parties’ interest, is the distribution method of social compensation to accompany subsidized fuel price hike. There was
an indication that at the beginning, some political parties within the coalition (Golkar, PKS and PPP) objected to the method of delivering the temporary compensating cash transfer (BLSM) to the poor and near-poor households. The government wanted to channel it through the post office network in order to minimize possible leaks, but the Golkar party wanted to do it through the regional governments, as many Golkar’s cadres have positions in the regional governments. Meanwhile, the PKS thought that the social compensation had to be done through the social ministry, led by a PKS cadre. The disagreements between political parties on the method to deliver the cash transfer was never really solved, and the two parties have boldly defied the coalition by disagreeing the fuel price hike in the DPR plenary meeting. SBY’s response the night after the DPR’s decision was a little bit skeptical, with the president saying that the goverment will need to refer to some policies to maintain economic and budget sustainability under the circumstance of no BBM price hike. These include energy savings program, gasoline conversion to natural gas, optimizing revenue source (i.e. tax, mining industry), increasing the oil lifting, and reduction in some budgetary spending. All of the measures, except the latter, are hard to achieve in the near term, while the energy subsidy ballooning continues, threatening the fiscal health. Nevertheless, SBY accepted a total of Rp 225 trillion energy subsidies approved by the parliament, although the amount is based on the assumption of Rp
the Constitutional Court (MK) on the basis that Article 7 Point 6a of the newly revised budget law contradicts Chapter 28 Point 2 of the Constitution, that all the natural resources have to be managed by the state for the welfare of the people.
Policy and Market Implications
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1,500/liter BBM price hike and without electricity price hike. Previously, during the deliberation in the discussions with the parliamentary budget commitee, energy subsidies were estimated and proposed at Rp 266 trillion, if there is no subsidized fuel hike. Hence, there is still a big fiscal risk related to the fuel/energy subsidies, due to several unfavorable circumstances: (1) higher than $105/barrel but lower than the $ 120.75/barrel ICP threshold, (2) lower than 930,000 barrel per day assumption of oil lifting, and (3) bigger volume of subsidized fuel consumption (higher than 40 million kilo liter assumed in the budget). The volume may even go up to more than 45 million kilo liter due to hoarding, illegal reselling and exports, triggered by a big price-discrepancy (currently the subsidy to official price ratio has reached more than 100%).
As a consequence, we may expect fuel scarcity problem arise as the room for fuel subsidy is limited at Rp225 trillion while fuel consumption continue to edge higher than presumed. Of course, there is still a possibility for a fuel price hike this year, and we think that the possible earliest time to raise the BBM price, if the world oil price continues hovering at the current level, is in July 2012. Provided, of course, that SBY has the courage to do it, considering massive labor and student demonstrations. The last six-month average of ICP (Oct 11Mar 12) is only at $116.5/barrel, while to be able to hike the BBM price, the government needs to see the 6-month average ICP breaking above $120.75/barrel. However, there is also a risk that this conditional rights for the government to directly change the subsidized fuel (BBM) price to be nullified by
No significant impact on our year-end inflation forecast if the government still be able to hike the BBM price in the 3Q12, i.e. still at 7.29%yoy (the fiscal assumption of inflation is at 6.8%yoy). However, if the government won't be able or will not dare to raise the BBM price this year, the 2012 inflation rate is expected to be much lower, i.e. around or close to 5.0% yoy. This number already includes the rising inflationary expectation due to the uncertainty surrounding the BBM price hike. Bank Indonesia may just keep its policy rate intact at 5.75%, and will prefer to do more liquidity management instead. The hike in the banks’ statutory reserves (GWM ratio) is a possible option to control inflation, although it may not be across the board GWM ratio hike, but possibly a selective GWM ratio increase linked to the bank’s placements in BI. The parliamentary decision to postpone the BBM price hike might also cost Indonesia from getting the investment grade upgrade by S&P. However, if the government is able to come up with prudent and convincing policies in anticipating the impact of “no fuel price hike”, there are still chances that S&P may grant the investment grade rating to Indonesia by end of April 2012.
If the government in 3Q12 can hike the BBM price, the government budget will still be on track (as in APBN-P 2012 - the revised budget), and the additional bond issuance approved is Rp 25 trillion. However, if the government can't hike the BBM price, there will still be a need to add more financing through bond issuance (the amount of which will also depends on how deep the spending cut programs are), despite the cancelation of the social compensation program and a possible reduction in the increase of the infrastructure spending. Very rough estimate on the additional bond financing needed (on top of the Rp 25 trillion) is around Rp 25-30 trillion. This option will likely depress the IDR bond prices further, with the 10year bonds possibly weaken by 100bps or more. With the possibility of BBM price hike in 3Q12, and thus expectation of inflation going to 7.29% by year-end, some foreign bond investors will continue to go out. Thus we have to watch out for the possible sharp increase in the bond yield in the next few months, although BI may still be in the market to support the bonds market. This pressure on the bond market may also translate into a pressure on the IDR/USD. In the near term the Rupiah may be depressed towards 9,300 against the greenback, especially if some big bond investors pulling out. However, it may strengthen again towards the year-end. Currently we still keep our year-end forecast at 8,950, but with some upside risk towards 9,100.
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March 12, 2012 A5
The Economy ECONOMIC UPDATES
RI, China Trade Expected To Reach $80b in 2015
Fuel Price Hike Has Positive Impact: Fitch International credit rating agency Fitch Ratings said the government`s plan to increase fuel prices, will have a positive impact on the country`s sovereign debt rating. The policy would limit a fiscal impact due to spiraling global crude prices, Fitch said in a press statement issued on Monday. According to Fitch, the policy would increase fiscal flexibility and inflation rate in 2012. But the rising inflation rate induced by fuel oil price hike expected to take effect on April 1, 2012 would be temporary in nature, it said. "The inflation hike will be the worst possibility in the short run due to the increase in fuel prices," he said. The government is seeking to raise the price of subsidized fuel oils by Rp1,500 to Rp6,000 a liter by submitting a draft revision of the 2012 state budget earlier than scheduled. The government is also planning to increase a deficit of the 2012 state budget to 2.2% due to an increase in state spending on energy subsidy. Fitch also reminded Indonesia of the need to increase its foreign exchange reserves as part of efforts to overcome a sudden reversal of hot money that might weaken the capital market. Indonesia`s foreign exchange reserves fell by $0.9 billion in January 2012. Fitch said the needs for foreign exchange reserves were one of the crucial factors in rating state bonds.
Govt Raises Rp7.3t From Bond Auction The government raised Rp7.3 trillion in funds from the sale of five series of state bonds in an auction on Tuesday. The government will use proceeds from the issuance of state bonds to meet part of financing target in the 2012 state budget, the directorate general of debt management at the finance ministry said in a statement on Tuesday. The 7.3 trillion consists of Rp0.25 trillion from the bonds series SPN03120621, Rp1 trillion from the bonds series SPN12130307, Rp1.95 trillion from the bonds series FR0060, Rp2.05 trillion from the bonds series FR0061, and Rp2.05 trillion from the bonds series FR0058. The bonds series SPN03120621 due on June 21, 2012 will be issued at a weighted average yield of 3.08 percent and the bonds series SPN12130307 due on March 7, 2013 will be issued at a weighted average yield of 4.04%. Meanwhile, the bonds series FR0060 due on April 15, 2017 will be issued at a yield of 5.12 percent and a coupon of 6.25%, series FR0061 due on May 15, 2022 at a yield of 5.87% and a coupon of 7.00%, series FR0058 due on June 15, 2032 at a yield of 6.73% and a coupon of 8.25%. The five series of the state bonds will be issued on March 22, 2012.
In 2011 the value of trade between Indonesia and China was recorded at around $60 billion and it is expected to reach $80 billion in 2015.
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he total value of trade between Indonesia and China is expected to reach $80 billion in 2015. "In 2011 the value of trade between Indonesia and China was recorded at around $60 billion and it is expected to reach $80 billion in 2015," Chinese consul Lie Chuen said at the opening of
"Hong Kong-Guangdong Lifestyle Expo" here on Thursday. He said the expo on lifestyle products was very important because it involved three cities, namely Jakarta, Hong Kong and Guangdong whose population`s lifestyles are similar. Minister of Cooperatives and Small and Medium Businesses Syarifuddin Hasan meanwhile said Indonesia, China and India are three Asian countries that have recorded positive growth while the world is facing a financial crisis. The Council spokesman Joe Kainz said the event was aimed at bridging bilateral trade between Hong Kong and Indonesia. "We hold this expo to help Hong
Kong companies seek a new market and meet them with new buyers," he said. Lifestyle Expo has earlier been held in China, Budapest in Hungary, Mumbai in India and Warsaw in Poland.
Guangdong ready to intensify cooperation with Indonesia
Southern China's Guangdong Province is eager to expand cooperation with Indonesia especially in the trade and economic fields, a Chinese official said. "We are ready to intensify cooperation in the trade and economic fields with Indonesia," Li Jian, the Deputy Director General of the Guangdong Provincial Administration`s Foreign Affairs
Office, told several Indonesian journalists here, Monday. Twoway trade between Guangdong and Indonesia reached $12.4 billion last year. Guangdong`s imports from Indonesia include oil palm. He invited Indonesian businessmen to participate in a number of trade and economic exhibitions in Guangdong, which regularly organizes among other things China Import and Export Fair, also known as Canton Fair. The 111th Canton Fair will take place this year from April 15 to 19 and again from May 1 to 5, in Guangzhou. Last year, around 530 companies from 49 countries took part in the exhibition.
He said quite many Guangdong tourists visited Indonesia because geographically the Chinese province is not far from Indonesia. Historically, quite many Guangdong people had moved to Indonesia in the past. The Guangdong provincial government also offers cooperation in the agricultural sector with Indonesia, especially in seed and fruit cultivation. Guangdong, which has total population of around 100 million, has established sister city ties with North Sumatra Province, and once forged close cooperation with West Kalimantan. Its capital city, Guangzhou, has sister city cooperation with Surabaya, East Java.
RI, Japan to Develop Jakarta-Bandung High-speed Railway: Official The construction of the 144-km railway link would be funded under a public private partnership (PPP) scheme The Indonesian government, along with the Japanese ministry of land, infrastructure, transportation and tourism (MILT) will develop a Jakarta-Bandung high speed railway at a cost of
Rp56.108 trillion, an official said. The construction of the 144-km railway link would be funded under a public private partnership (PPP) scheme, Director General of Railway Affairs at the Transportation Ministry Tundjung Inderawan said on the sidelines of a seminar on the Pre-feasibility Study of the Jakarta-Bandung High Speed Railway PPP Project, here on Monday. MILT would appoint Japan Railway Technical Service and
Yachiyo Engineering to prepare the pre-feasibility study to be conveyed to the Indonesian government, he noted. The pre-feasibility study would cover a number of aspects including construction, land clearance, taxation, environment, railway routes, topographic conditions, and train fares, he added. Under the PPP scheme, the Indonesian government would finance the project using state budget funds by involving private
investors, he said. "The government must involve a third party because of limited funds. However, the government will work on other aspects such as land clearance," Tundjung said. MILT representative Kenji Endo said the railway link might use super express trains that go up to speeds of 210 km per hour. The first phase of the project, which will work out to Rp46 trillion or 90% of the total cost, will
cover railway tracks, railway stations, trains, operation and maintenance.The remaining 10% of the total cost will be used for consulting services and taxes. Director of Government-Private Cooperation at the National Development Planning Board (Bappenas), Bastari Panji, said the government would prioritize the project not only because it would cover a short distance but also because it would not burden the state budget much.
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A6 March 12, 2012
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Executive Highlights The government has proposed raising fuel prices by 33% to Rp6,000/liter THE GOVERNMENT HAS PROPOSED RAISING FUEL PRICES BY 33% TO RP6,000/LITER from Rp4,500/liter previously in a revised 2012 budget that was formally submitted to parliament this week. A number of macroeconomic assumptions have been adjusted in the draft budget revisions to reflect the planned fuel price hike and its impact on the economy. The government is now projecting mildly lower economic growth of 6.5% down from 6.7% previously. Finance minister Agus Martowardojo acknowledged that this was higher than the consensus of many analysts for 6-6.2% growth. The minister, however, said he was confident that a planned Rp25 trillion cash assistance package for low-income households, development spending and continued implementation of the MP3EI would help Indonesia achieve its growth target. Meanwhile, full year 2012 inflation is forecast to reach 7% from 5.3%, while the rupiah is projected to average Rp9,000/US$ versus Rp8,800/US$ in the current budget. Indonesian oil prices are expected to average US$105/barrel from US$90, while national oil production is expected to reach 930,000 bpd from 950,000 bpd. The budget deficit, meanwhile, is forecast to rise to 2.2% of GDP from 1.5% of GDP previously. To fund this, the government plans to raise its debt issuance this year to Rp160 trillion from an initial plan of Rp135 trillion.
Bank Indonesia kept its benchmark rate unchanged at 5.75% for March BANK INDONESIA KEPT ITS BENCHMARK RATE UNCHANGED AT 5.75% FOR MARCH FOLLOWING ITS MONTHLY BOARD OF GOVERNORS MEETING. Most analysts see this as a signal that the central bank is ending its monetary easing cycle after lowering rates by 100 basis points since last October, in anticipation of rising inflation pressures from the planned fuel price hike. The bank said it would optimize all monetary policies to mitigate the impact of the government’s fuel price policy. At the same time, it stated that the impact of the price hike on inflation would likely be temporary, with consumer prices likely to subsequently ease in line with fundamental economic conditions. On economic growth, the central bank said there were additional downside risks due to slowing global growth, declining prices for non-energy commodities and a likely slowdown in household consumption as a result of the fuel price bike. As a result, BI stated that growth would likely fall at the low-end of its 6.3-6.7% full year forecast.
A Presidential Decree has just been released requiring foreign miners to gradually divest their stakes to Indonesian entities A PRESIDENTIAL DECREE HAS JUST BEEN RELEASED REQUIRING FOREIGN MINERS TO GRADUALLY DIVEST THEIR STAKES TO INDONESIAN ENTITIES AND REDUCE OWNERSHIP TO LESS THAN 50%. The new regulations only apply to mining contracts or contract extensions approved after the decree’s adoption. The new rules are much more stringent than the divestment regimes of earlier mining contracts such as Newmont’s Batu Hijau gold and copper mine in West Nusa Tenggara signed in 1986. Under the latest decree, foreign miners will be required to divest 20% of their mines within six years of the start of production. At least 30% must be sold by the seventh year, 37% by the eighth year, 44% by the ninth year and 51% by the 10th year. The regulations give the central government first right of refusal for the divested shares, with priority subsequent-
ly given to regional governments, SOEs and finally Indonesian private investors. The latest decree comes following a series of regulations to overhaul Indonesia’s mining system. These include rules to refine minerals domestically, limit coal exports and renegotiate all mining CoW’s. The government is following a global trend by trying to capture a greater revenue share of a country’s mineral wealth. Analysts, however, warn the latest measures will reduce foreign investment in Indonesia’s mining sector and harm the country’s overall investment climate.
a five-year, US$300 million contract to Cipta Kridatama for mining services
the remainder to be delivered over the next two years. The deal includes collaboration with state aeronautics firm Dirgantara Indonesia for the manufacture of the C295’s tail empennage, rear fuselage and fuselage panels, as well as the creation of a service and delivery center and final assembly line in Indonesia. Airbus Military chief executive Domingo UrenaRaso said the deal highlighted the confidence the Indonesia military has with the C295 aircraft. Indonesian defense minister Purnomo Yusgiantoro said the C295 provided the ideal capacity to respond to the country’s current and future military and humanitarian transport needs in a very cost-efficient manner. He added that the aircraft would be used by the air force for a variety of roles including military, logistical, humanitarian and medical evacuation missions. Airbus Military is a unit of European aircraft maker Airbus.
COAL MINER RIAU BARAHARUM AWARDED A FIVE-YEAR, US$300 MILLION CONTRACT TO CIPTA KRIDATAMA FOR MINING SERVICES. Under the deal, Cipta Kridatama will provide land clearing, overburden removal and heavy machinery leasing over the period of the contract. Company president director Boedi Santoso said the deal would help boost the firm’s overburden removal by 25% this year to around 150 million bank cubic meters (bcm) and provide it with a steady cash flow over the next several years. The mining contract will be conducted in the Indragiri Hulu and Indragiri Hilir districts in Riau, where Riau Baraharum has a 25,000 hectare concession. The miner has an estimated 200-300 million tons of coal reserves with a calorific value of 6,100-6,200 kcal/kg. Cipta Kridatama is an affiliate of the Tiara Marga Trakindo Group owned by the Hamami family.
A consortium led by Japan’s Sumitomo has signed a 30year, power purchase agreement with state power utility PLN for two geothermal power Coal miner Riau projects Baraharum awarded A CONSORTIUM LED BY JAPAN’S SUMITOMO HAS SIGNED A 30-YEAR, POWER PURCHASE AGREEMENT WITH STATE POWER UTILITY PLN FOR TWO GEOTHERMAL POWER PROJECTS. The deal will allow development of the two facilities, located at Muara Laboh in West Sumatra and Rajabasa in Lampung. The Japan Bank for International Cooperation (JBIC) is slated to extend US$1.5 billion in project financing to help fund the two projects. The 220 MW Muara Laboh facility is scheduled to start commercial operations in early 2016, following the drilling of production wells this year and plant construction starting in 2013. The 220 MW Rajabasa facility is scheduled to start commercial operations in the second half of 2016. The two facilities are 35% owned by Sumitomo, 35% by France’s GDF Suez and 30% by local firm Supreme Energy. Sumitomo said Muara Laboh and Rajabasa are the first overseas geothermal projects in which a Japanese firm is participating from its inception.
Selected Instant Indicators GDP GROWTH (&) By Quarter 175 6.3 5.5
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BERAU COAL SOLD US$500 MILLION IN U.S. DOLLAR DENOMINATED, GLOBAL BONDS AT A YIELD OF 7.25% EARLIER THIS MONTH. Highlighting the strength of Indonesia’s bond market in face of sovereign debt uncertainties in Europe, orders for Berau’s debt totaled US$9.5 billion or nearly 20 times oversubscribed, a record for the Asian debt market. The deal was managed by Bank of America Merrill Lynch, Credit Suisse and JP Morgan. Proceeds from the bond issue will be used to refinance debt and fund capital expansion to boost coal production. Berau, which exports most of its coal to China, India, Taiwan and South Korea, produced around 20 million tons of coal last year. The company is looking to raise production to 23 million tons of coal this year and 33 million tons of coal in 2014. Berau Coal is run by London-listed Bumi Plc which is controlled by the Bakrie Group, mining investor Samin Tan and British financier Nathan Rothschild.
11 2011
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Airbus military has signed a contract with the Indonesian defense ministry to supply nine C295 transport aircraft in a deal worth US$325 million AIRBUS MILITARY HAS SIGNED A CONTRACT WITH THE INDONESIAN DEFENSE MINISTRY TO SUPPLY NINE C295 TRANSPORT AIRCRAFT IN A DEAL WORTH US$325 MILLION. The first plane will be delivered this year, with
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Thailand’s Siam Cement Group (SCG) confirmed plans to build a US$300 million cement factory in Indonesia THAILAND’S SIAM CEMENT GROUP (SCG) CONFIRMED PLANS TO BUILD A US$300 MILLION CEMENT FACTORY IN INDONESIA. Company chief executive Kan Trakulhoon said construction of the plant, to be located in Sukabumi, West Java, would begin later this June with commercial operations slated to start in 2015. He said the facility would have a production capacity of around 1.8 million tons of cement per year. Trakulhoon, who recently met with President Yudhoyono to discuss the group’s expansion plans in Indonesia, said the country has become SCG’s largest foreign investment destination due to its robust economy, long-term growth potential and relatively good business climate. Earlier this year SCG acquired concrete mix producer Boral Indonesia in a US$135 million deal. Last year it acquired a 30% stake in Indonesia’s largest petrochemical firm Chandra Asri. The group also acquired two ceramics manufacturers, Keramika Indonesia Assosiasi and Kokoh Inti Arebama, last year as part of its expansion into Indonesia’s construction sector.
Aircraft MRO firm GMF Aeroasia has recently signed new contracts with a number of airlines and leasing firms worth a total Rp1.2 trillion
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Berau Coal sold US$500 million in U.S. Dollar denominated, global bonds at a yield of 7.25% earlier this month
The group is the authorized dealer for Caterpillar heavy equipment in Indonesia.
Feb
2012
AIRCRAFT MAINTENANCE, REPAIR, AND OVERHAUL (MRO) FIRM GMF AEROASIA HAS RECENTLY SIGNED NEW CONTRACTS WITH A NUMBER OF AIRLINES AND LEASING FIRMS WORTH A TOTAL RP1.2 TRILLION. The airlines and leasing companies involved in the deals include local operators Travira Air and Sriwijaya Air, Bangladeshbased United Airways, India’s Jet Airways, Nigeria’s HAG LAG Inc., Thailand’s NOK Air, U.S.based CIT Leasing Corporation and Orix Aviation, Vietnam’s VietJet Air and Zimbabwe-based Avient. The contracts largely involve airframe, engine and component maintenance for aircraft made
by Airbus, Boeing and McDonnell Douglas as well as CFM56-3 engines made by GE. GMF AeroAsia vice president Jemsly Hutabarat said the deals reflected the ongoing shift for MRO services from Europe and the U.S. to the Asia-Pacific due to more competitive costs. GMF AeroAsia, which currently operates three hangars at Soekarno-Hatta international airport, is the largest MRO firm in Southeast Asia. The company is a subsidiary of national carrier Garuda Indonesia.
The IFC has acquired an 11% stake in Medco Power Indonesia THE INTERNATIONAL FINANCE CORPORATION (IFC) HAS ACQUIRED AN 11% STAKE IN MEDCO POWER INDONESIA in a bid to boost clean energy use in the country. The deal is part of a US$112 million equity investment arranged by a consortium of financial investors led by Saratoga Capital to provide growth capital to Medco Power. IFC Indonesia country manager Sarvesh Suri said the deal would help catalyze private sector investment in Indonesian independent power producers while demonstrating the viability of clean energy sources in the country. Sandiaga Uno, founder of Saratoga Capital, said the deal reflected Saratoga and IFC’s long partnership in improving Indonesia’s power structure. Medco Power currently operates gas-powered power plants in Batam and South Sumatra with a total capacity of 250 MW. The latest deal will help the power firm complete the construction of five additional power projects in Batam, Central Sulawesi and West Sulawesi that is slated to boost its total capacity to 390 MW this year and 1,000 MW by 2015. The IFC is the investment arm of the World Bank.
Thailand’s Indorama Ventures said it has reached an agreement to acquire the Polyethylene Terephthalate (pet) production facilities of local firm Polypet Karyapersada THAILAND’S INDORAMA VENTURES SAID IT HAS REACHED AN AGREEMENT TO ACQUIRE THE POLYETHYLENE TEREPHTHALATE (PET) PRODUCTION FACILITIES OF LOCAL FIRM POLYPET KARYAPERSADA. Financial details were not
provided. The facilities have a production capacity of more than 100,000 tons per year of PET, and are located adjacent to Indorama’s Indonesian unit in Cilegon, West Java that currently produces purified terephthalic acid (PTA). Indorama chief executive Aloke Lohia asserted that the acquisition was part of the firm’s strategy to integrate its Indonesian assets and achieve a leading market position in the country for its core business of PET and polyester. He said that Indonesia was a key component of Indorama’s long-term expansion plans given the nation’s fast-growing market, high potential for future growth and relatively low energy costs. Indorama Ventures is one of the world's largest polyester chain makers.
India’s Thermal Powertech Corp. has signed a contract with local coal producer Bayan Resources to buy one million tons of coal per year over a 10-year period INDIA’S THERMAL POWERTECH CORP. HAS SIGNED A CONTRACT WITH LOCAL COAL PRODUCER BAYAN RESOURCES TO BUY ONE MILLION TONS OF COAL PER YEAR OVER A 10YEAR PERIOD. Financial details were not disclosed. Bayan director Jenny Quantero said shipping would commence in 2014 when Thermal Powertech’s 1,300 MW coal-fired power facility in India starts operations. Thermal Powertech chief executive Atul Nargund said the deal would secure nearly half of the plant’s requirement for imported coal. He underscored the importance of the deal with Bayan as a reliable supplier of Indonesian high-grade coal. Bayan is Indonesia’s sixth largest producer and exporter of thermal coal, producing around 15 million tons of coal per year. It also owns Balikpapan coal terminal, one of the largest coal terminals in East Kalimantan with a handling capacity of 15 million tons per year.
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
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March 12, 2012 A7
Around Jababeka D’Java Residence: New Residential from Jababeka Located in the northern part of Jababeka city, it targets the upper middle class by offering prices in the range of Rp 380 million to Rp 1 billion.
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PHOTOS: The President Post/Heros Barasakti
ababeka has launched its newest residential product, namely D’Java Residence, a Javanese-nuanced cluster combined with a modern and classical concept. Located in the northern part of Jababeka city, it targets the upper middle class by offering prices in the range of Rp 380 million to Rp 1 billion. D’Java Residence will be built in limited quantity at only 200 units. "The target market we aim is established young professionals, which are in large numbers in the industrial area and are scattered in several locations, including Jababeka industrial area," said Suteja Darmono, VP Residential & Commercial PT Jababeka Tbk. Java D'Residence, which occupies an area of 10 acres, offers two types of houses, the Papandayan type and Tidar type. Papandayan is divided into two types, namely Papandayan A (162/240) and Papandayan B (90/136). Meanwhile, the type Tidar is also divided into two, namely Tidar A (59/105) and Tidar B (45/90). D’Java Residence is located in a very strategic location, close to President University, Medical
City, Cikarang Dry Port and Jababeka Golf & Country Club. Besides having an exclusive residential concept and strategic location, D’Java Residence also offers prime facilities such as Single Gate Cluster, Club House, Green Garden and Private Jogging Track. Suteja stated: "The facility is expected to be additional value for potential buyers.” Jababeka City has more than 1,400 hectares of land used as
Jababeka Innovation Center: Supporting Small Medium Industries PHOTOS: The President Post/Heros Barasakti
JIC will play the role as the center to develop human resources of companies from the industrial area or outside of it. PT Jababeka Tbk has launched the Jababeka Innovation Centre (JIC), which aims to synergize the industrial estate, the government, and researchers. JIC will play the role as the center to develop human resources of companies from the industrial area or outside of it. The advisor PT Jababeka, Tbk., Utama H. Padmadinata, stated that the initial idea to make JIC was to complement the needs of the industrial area. It will create new business opportunities as well as develop existing industries, he added. He said that the concept is based on existing industries in foreign countries, which are surrounded by top universities and researchers. ''We want Jababeka to have facilities related to the development and the needs of our tenants. That’s why we created JIC," he explained.
There are some priority sectors to be developed, such as motorcycle parts industry and creative industry, because there is another facility in Jababeka called ICT Training Center that can be used to support the creative industry. “We expect there will be clusters for the automotive and creative industries. We also expect that more than 3,000 industries in Cikarang need support, so our third priority is to open up new business opportunities in terms of small medium industries," said Utama. Utama explained that Jababeka is known as an industrial estate supporting small medium
industries which need breakthrough innovations in order to survive. JIC is the right place to create innovation for small medium industry players, he said. In addition, there is also a teaching factory, a place to train people in the company in order to develop the quality of human resources. Utama hopes the local government will also contribute in the development of innovation center, for instance by donating equipment for the teaching factory. “We want the local government to get involved by donating facilities, it is for the sake of the development of Berkasi,” he said.
residential area. There are over 30,000 housing units, which consist of various types of cluster housing for all social strata and to meet everyone's taste, from simple and practical up to grand and luxurious. Before D'java Residence, Jababeka had developed Tropicana Garden, Simprug Garden and Veranda Golf Townhouse. For families who require exclusive, simple, and modern homes as well as a perfect am-
bience to raise their children, Tropicana Garden and Simprug Garden, which are surrounded by green and peaceful Botanic Garden, is the most appropriate type of housing for them. For those who desire quality and lifestyle blended with nature, Veranda Golf Townhouse is an appropriate option. It lies right next to the Golf Course Jababeka, which allows occupants to enjoy the green nature all the time. The expanse of the
green golf course and the jogging track offer a unique concept of balance between health and lifestyle. Simple recreational activities and safe environment are only minor facilities offered by Jababeka City, as its residents will feel a strong sense of community life. Each individual and family will have access to facilities and quality services for a complete and comprehensive lifestyle.
The target market we aim is established young professionals, which are in large numbers in the industrial area and are scattered in several locations, including Jababeka industrial area."
Business BUSINESS BRIEFS Eight Foreign Firms Eager to Invest in Batam Eight foreign companies expressed interest in investing a total of $10.4 million in Batam, Riau Islands province, in February 2012, a local official said. The eight companies came from Singapore, Malaysia, India, the United States, Germany, and South Korea, Dwi Djoko Wiwoho, director of onestop integrated services and public relations at the Batam Management Board (BP Batam), said here on Friday. “Most of the companies are interested in the electronic industry. Only a few of them were eager to engage in the shipping industry,” he said. He said this year BP Batam was focusing on promoting its investment potentials to Asia, East Asia in particular after the European and US crises had shown no signs of recovery. “However, European and US companies are still interested in investing in Batam. This is encouraging,” he said. BP Batam has set itself the target of attracting 100 foreign investors this year. “Until February 12 investors have expressed keen interest in investing in Batam. And 10 of them have realized their investment commitment,” he said.
Two Subsidiaries of Pertamina to Go Public State oil and gas company PT Pertamina said its unaudited net profit reached an all time high of Rp24.6 trillion last year compared to Rp16.7 trillion in 2010. “The significant increase in the profit was fueled among others by an increase in global crude oil prices,” Pertamina Director of Investment Planning and Risk Management M. Afdal Bahaudin said after a hearing with the House of Representatives (DPR) Commission VII here on Tuesday. He said the increase in unaudited net profit was also driven by oil and gas production hike. According to data from Pertamina, the company`s income in 2011 reached Rp553.5 trillion compared to Rp417.9 trillion the year before. The 2011 income accounted for 231.45% of the target set by the company, he said. Earlier, Pertamina President Director Karen Agustiawan said the company applied aggressive strategy in the upstream oil and gas industry and profit strategy in the downstream oil and gas industry. Pertamina is planning to spend Rp52.8 trillion on investment this year. Nearly 80% of the funds will be used to develop the upstream oil and gas industry and 20% for the downstream oil and gas industry. The company is expected to produce 532,700 barrels equivalent to oil per day (boed), up from the realization of 465,300 boed.
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Sharp Indonesia to Build World’s Largest Refrigerator Plant www.tribunnews.com
The new plant in the Karawang International Industry City (KIIC) area would be located on 30 hectares and would have a capacity of producing 220,000 refrigerators per month or 2.64 million units per year and 140,000 washing machines per month, or 1.68 millions per year.
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T Sharp Electronics Indonesia (SEID) will build the world`s largest Sharp plant to manufacture refrigerators and washing machines in Karawang, West Java, at a cost of Rp1.2 trillion, Fumihiro Irie said. “Construction of the new plant will be started in July 2012 and is expected to finish in 2013,” the SEID president director said here on Thursday. He added that the plant is being built to anticipate the increasing demand of refrigerators and washing machines. He projected the ownership rate of refrigerators and washing machines in the country would reach, respectively, 45% and 15% in 2016, up from 35% and 15% in 2010. “Sharp wishes to main-
PT Sharp Electronics Indonesia (SEID President Director Fumihiro Irie (Right) at the Sharp One Million Washing Machine Production Anniversary, earlier this month.
tain its electronics market share above 25% in Indonesia,” Irie said. Right now, he added, Sharp controls 31% of the refrigerator market and 36% of the washing machine market. He said the new plant in the Karawang International Industry City (KIIC) area would be located on 30 hectares and would have a capacity of producing 220,000 refrigerators per month or 2.64 million units per year and 140,000
washing machines per month, or 1.68 millions per year. The refrigerator production capacity of the new plant is twice as large as the existing plant in Pulau Gadung, East Jakarta, while the capacity of its washing machine production is 2.5 times larger than the Pulau Gadung plant. “So, the new plant will be the largest household plant in Indonesia, even the largest Sharp plant in the world,” he said.
Irie said the new plant in Karawang would focus on producing small to medium refrigerators with a maximum capacity of 300 liters. “We will import larger refrigerators from Thailand for the Indonesian market,” he said. The plant will also produce twotube washing machines, he said, adding most of the plant`s products will be intended for the Indonesian market. “Exports will be minimum, as our concept is manufacturing products based on lo-
Sharp wishes to maintain its electronics market share above 25% in Indonesia. Right now, Sharp controls 31% of the refrigerator market and 36% of the washing machine market.”
cal demand for local consumption,” he said. He noted that after the new plant is operating in 2013, the old plant in Pulau Gadung would stop producing refrigerators and washing machines, but would continue to operate to produce CRT and LCD television sets, and as a service center. “SEID`s contribution to Sharp`s revenue in the ASEAN region will reach 5055%,” he said, without mentioning sales figures.
Chinese Investor Mulls Investing in W. Kalimantan’s Rubber Plantations A Chinese company is mulling to develop rubber plantations in West Kalimantan province at a cost of more than Rp10 trillion, a local investment official said. “They (the Chinese company) have invited the West Kalimantan provincial government and legislative body to visit China to show their seriousness in making investment (in the province),” Head of the West Kalimantan Provincial Investment Coordinating Board
(BPMD) Yoseph Alexander said here on Sunday. The Chinese investor planned to develop rubber plantations on 100 thousand hectares of land and a rubber processing plant, he said. He said most of rubber plantations in West Kalimantan had so far been developed on a small scale. A West Kalimantan investment delegation was expected to leave for China in April to meet the invi-
tation, he said. The planned Chinese investment has not been included in the local government`s target of attracting foreign investment totaling Rp6.5 trillion this year, he said. China remains on top of the list of foreign investors in West Kalimantan, followed by South Korea. The West Kalimantan provincial administration has set itself the target of licensing investment proposals to develop 1.2 million hectares of rubber plantations.
Pertamina Set to Operate Arun Terminal in 2013 Investment of the LNG conversion in Arun may reach $73 million in capital expenses and $4 million in operation costs. State oil and gas company PT Pertamina is set to operate a natural liquefied gas terminal following the conversion of the Arun plant in Aceh in June next year. Pertamina`s spokesman M Harun said in Jakarta Friday that he has become increasingly optimistic to build the LNG terminal in Arun following a strategic decision of the State Enterprises Minister on the utilization of the plant. “Based on the decision, Pertamina became committed to complete the project in June next year,” he said. He also said that the Finance Ministry has also issued an agreement in principle of the Arun project in September 2011. The State Treasurer Director General of the Finance Ministry is now intensively discussing a leasing agreement of the assets. Earlier State Enterprises Minister Dahlan Iskan decided that gas requirements in Medan, North Sumatra, will be supplied from the conversion of the Arun plant rather than building a floating
terminal in Belawan, Medan, because it is cheaper, quicker, and with a positive effect for the people of Aceh. It was planned to shift the floating terminal from Belawan to Lampung. Harun said that the conversion of the Arun assets will revive the apparent death of industries, such as PT Asean Aceh Fertilizer, PT Kertas Kraft Aceh, Regional Company of Aceh Administration, and the sustainable supplies to PT Pupuk Iskandar Muda (PIM). “This project will also supply gas to PLN and industries in Medan and its surroundings,” he said. Pertamina, he added, will develop the plant conversion project as a hub terminal for LNG and LPG increasing the national energy resilience. The LNG plant conversion in Arun will in its early stages have a capacity of 200 MMSCFD and later 320 MMSCFD following the development of the Arun-Belawan pipeline. Investment of the LNG conversion in Arun may reach $73 million in capital expenses and $4 million in operation costs. “These costs are actually lower than building a new floating terminal or leasing it in Belawan,” he said. Harun said the Arun conversion project has completed its front end engineering design (FEED) in
June 2011 and some other facilities and studies at a cost of about only $400,000. In addition to that, he added, he along with the Road Development Directorate General of the Public Works Ministry and the state railway company PT Kereta Api Indonesia will cooperate in using part of the roads and railroads in building the the pipeline. Under the cooperation scheme a pipeline no longer needs land clearance. He also said that Pertamina and the Aceh regional state enterprise have discussed a cooperation in utilizing the Arun plant. “Then PIM, PLN, and Pertamina were intensively discussing a scheme on gas utilization arrangements,” he said. Harun added that the Aceh governor and legislative assembly have given the necessary security guarantee to secure the smooth development of the gas pipeline. “We have reached agreement with representatives of the Aceh administration, community leaders, the youths and Malikussaleh University in November 2011,” he said. The House of Representatives, he added, has given a recommendation to the Vice Presidential Secretariat to realize the project soon for industrial revitalization and the maintenance of security in Aceh.
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Business Freeport Urged to Divest 51% of Shares to Indonesia www.westpapuamedia.info
Currently, the Indonesian government holds only 9.36% of Freeport shares, which it has held since the working contract with Freeport was first signed in 1967.
ing to Articles in the Government Regulation Number 24 of 2012, foreign companies holding mining licenses must divest their shares in stages after five years of production, thus after ten years, minimally 51% of their shares must be held by Indonesian parties. The divestment stages called for are 20% up to the sixth year of production, 30% by the seventh year or production, 37% in the eighth year, 44% in the ninth and 51% in the tenth year of production.
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he government will request PT Freeport Indonesia to divest 51% of its shares to the country, an official said. The director general of mineral and coal mining of the ministry of energy and mineral resources, Thamrin Sihite, said here on Thursday the request would be conveyed during the renegotiation of the mining contract with the company. “They (Freeport) have taken a lot of profits so far. We wish they would divest their shares,” he said. He added that the process of divestment, however, would not be based upon Government Regulation Number 24, 2012 which requires foreign mineral and coal mining companies to divest 51% of their shares to the country. The divestment regulation, signed by President Susilo Bambang Yudhoyono on February 21, 2012, is not retroactive and only applies to agreements with new mining companies. “The process of divestment in Freeport will depend upon the results of negotiations later,” he said.
Freeport’s Grasberg Mine, Papua. According to Articles in the Government Regulation Number 24 of 2012, foreign companies holding mining licenses must divest their shares in stages after five years of production, thus after ten years, minimally 51% of their shares must be held by Indonesian parties. Currently, the Indonesian government holds only 9.36% of Freeport shares, which it has held since the working contract with Freeport was first signed in 1967. When the contract was extended in 1991, Freeport was required to divest 51% of its shares. However, the clause was later dropped following the issuance of Government Regulation Number 20, 1994 on shareholding in
companies established within the framework of foreign investments. Based upon Article 24 in Freeport`s contract extension, the divestment obligation is divided into two stages. The first stage of the divestment reaches 9.36% during the first 10 years, from 1991-2001, while the second stage mandated turning over two percent of their shares per year until reaching 51% in 2001. Articles in the contract also re-
Bank Sarasin Aims to Lead in Islamic Wealth Management Over the last decades, Sarasin has become known for sustainable investment and private banking. The Sarasin Group, which has its roots as a Swiss private bank, launched its range of Sharia-compliant products and services in 2009. The move signified the Group’s entry into the world of Islamic finance. Now, in line with the success of their branches in Dubai, Doha and Manama it aims to repeat its stellar performance in Islamic finance on a global scale. Over the last decades, Sarasin has become known for sustainable investment and private banking. As an international financial service provider committed to sustainability, the Group is now represented in more than 20 locations in Europe, the Middle East, and Asia. In November 2009, the Sarasin Group introduced a comprehensive Islamic wealth management service offering the full spectrum of Sharia-compliant private banking products and services: estate and succession planning, financing and asset management, including money market and structured products such as Wakala, Murabaha and Maraya. “Converting a conventional business to a Sharia-compliant entity can increase the value of a company by 18-25% due to the scarcity of genuine Islamic investments, but the process involves various risks,” said Sarasin Group, in its 2012 Islamic Wealth Management Report. As Sarasin notes, the market potential is massive, with the global Muslim population expected to increase by 26% to 2030, to 2.2 billion, rivaling China and India in terms of market size. The Muslim market segments in India
investment approach, and we are extremely delighted that our complete range of products and services has been welcomed by clients,” said Fares Mourad, Head of Islamic Finance, Bank Sarasin & Co. Ltd.
Fares Mourad Head of Islamic Finance, Bank Sarasin & Co. Ltd.
Many of our clients have expressed an interest in this type of investment approach, and we are extremely delighted that our complete range of products and services has been welcomed by clients.” and China alone are larger than some countries' populations, estimated at 140 million and 40 million respectively. Demographics are also compelling, with 43% of Muslims under the age of 25. “Many of our clients have expressed an interest in this type of
The introduction of Islamic banking is part of Sarasin's strategy to strengthen its position in the Middle East. The Sarasin Group is already represented in the region by its Sarasin-Alpen subsidiaries, based in Abu Dhabi, Bahrain, Dubai, Muscat, Oman, and Qatar. Bank Sarasin also plans to launch Sharia-compliant products and services in Singapore. Previously they already had a trust company based in Singapore to provide in-house trust, estate and succession planning advice to clients in Asia, the Middle East and Europe. “Strategically located in Singapore, we look after discerning clients from all around Asia who seek to place their assets with a highly reputable private wealth management institution, in jurisdiction with a world-class regulatory environment. We are proud to be the first Swiss private bank to offer such a holistic range of opportunities in Islamic finance to the region and on a global scale,” said Fares.
quire Freeport to follow the rules that would to be published later. After the issuance of Government Regulation Number 24 of 1994, Freeport`s divestment obligation, based on the 1991 contract, were nullified. Meanwhile, Government Regulation Number 24 of 2012 is a revision of Government Regulation Number 23 of 2010 and only requires 20% divestment. Accord-
The Indonesian parties referred to in the regulation may be the Indonesian central, provincial, or district governments, state-owned companies, regional state-owned companies and national private companies. If the central government is not willing to purchase the divested shares, they would then be offered to provincial or district governments and, if the provincial or district governments chose not to purchase the shares, they would be offered to national or regional state-owned companies through an auction. Additionally, if the national or regional state-owned companies reject purchasing the shares, they could be sold to private companies during an auction. Foreign mining companies that violate the divestment rules would be given administrative sanctions ranging from written admonitions to temporary termination to revocation of licenses.
Telkom to Acquire StarOne State Enterprises Minister Dahlan Iskan has given the nod to PT Telekomunikasi Indonesia Tbk. to acquire PT Indosat Tbk.`s fixed wireless access unit, StarOne, for a synergy with Telkom Flexi. “So far it is good for the progress of the company and is accountable. There is no problem, so go ahead,” he said at his office here on Tuesday. Dahlan also said that his office allowed Telkom to carry out corporate actions aimed at spurring its organic growth. “I would not order nor prohibit. So long as it is for increasing the company`s performance and it is accountable please go ahead,” he remarked. He added that the acquisition plan is part of corporate actions so he would refer it to the management. “We will not intervene,” he said. Before the end of 2011, Indosat`s President Director Harry Sasongko revealed that he had received names of companies interested in buying StarOne. Indosat is still evaluating the plan with regard to regulatory aspects that would come with it, such as the license and assets in the business unit. Until the end of 2011 StarOne had around 229,000 customers, down by 58.4% from 550,000 in 2010. Telkom has been mentioned as one of the opera-
State Enterprises Minister Dahlan Iskan
tors interested in acquiring StarOne. The state-owned company is currently working on two options to develop Flexi involving Telkomsel, its subsidiary that operates cell phone services. Telkom Flexi Executive General Manager Mas`ud Khamid said the first option is using one infrastructure with two different trademarks. “This will be similar to the airline industry where one airline company may have two different brands that offer full service and no frills respectively,” he said. The second scenario is with one infrastructure and one trademark, he added. “We continue studying the possibilities. The first or second option must be consulted with the other owner from Telkomsel, which is SingTel,” Khamid noted. In 2012, Flexi is prepared to spend around Rp400 billion to build mobile broadband based Evolution Data Optimized (EVDO) and Code Division Multiple Access (CDMA) technology in 20 cities till the end of June. Flexi`s move needs limited natural resource support such as frequency. The acquisition plan is believed to ease Flexi`s move to operate broadband mobile services.
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Investment
This year’s forum featured 31 speakers and panelists from around the world, and more than 10 percent of the 600 audience members were from abroad, including ethnic-Chinese entrepreneurs from 15 different countries.
CommonWealth Economic Forum 2012 Assembles Asia’s Academic, Business and Political Elite CommonWealth Economic Forum (CWEF) was hosted by CommonWealth Magazine in Taipei in February, offered an international, forwardlooking stage on which to make sense of these developments and examine Asia’s transformation and growth opportunities.
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he 2012 CommonWealth Economic Forum (CWEF) gathered Asia’s academic and business elites to discuss the region’s future and explore the ideas of economic well-being and sustainability. CWEF, which was hosted by CommonWealth Magazine in Taipei in February, offered an international, forward-looking stage on which to make sense of these developments and examine Asia’s transformation and growth opportunities.
Sherwin concluded that sound fiscal policy (avoiding dependency on international capital markets and promoting tax fairness), strong monetary policy (targeted at price stability), credential policy (the sound regulation of banks and regulatory quality) and strong basic institutions (protection of property rights and rule of law) were all critical to the success of smaller economies. In Asia, countries in the region have outperformed those in Europe and the U.S., but the pace of growth is slowing, and they remain under pressure to transform and upgrade their economies – to evolve from efficiency-driven economies to innovation-driven economies. Companies worried that uncertain economic prospects will hurt their businesses are trying to figure out how to identify new growth opportunities amid the upheavals seen in their respective industries. As for Taiwan, its re-elected president and new Cabinet have laid out their vision of forging a “Golden Decade,” but significant challenges, such as the European debt crisis, industrial transformation, and income inequality, pose major obstacles.
For the past three years, the CWEF has assembled Asia’s academic, business and political elite in Taipei. This year’s forum featured 31 speakers and panelists from around the world, and more than 10 percent of the 600 audience members were from abroad, including ethnic-Chinese entrepreneurs from 15 different countries. Taiwan’s President Ma Yingjeou opened the forum and stated that the government will continue to expand Taiwan’s efforts to be a part of regional economic integration. It is aggressively pursuing opportunities for economic cooperation with the United States, the European Union, and ASEAN nations, which will help to create even greater liberalization of Taiwan’s economy. President Ma emphasized that the government will continue to work to build up Taiwan as a global center for innovation, an economic and
trade hub in the Asia-Pacific, a global headquarters for Taiwan companies, and a regional headquarters for foreign companies. The forum featured many other elite entrepreneurs speaking publicly in Taiwan, among others, Setyono
Djuandi Darmono, president director of Indonesia-based industrial estate developer Jababeka Tbk.; Wei Ying-chiao, group chairman of food company giant Ting Hsin International Group; Charles Chao, president and CEO of influential Chinese media company
Sina Corporation; Zhang Yue; Tom Sun, president and CEO of touch technology giant TPK Touch Solutions; and Oh-Seok Hyun, president of the Korea Development Institute, one of Korea’s leading think tanks. Another keynote speaker was Murray Sherwin, the
chairman of the New Zealand Productivity Commission, who talked about what was behind the strong performance of small economies, with 23 of 34 advanced economies as defined by the IMF having populations of less than 20 million people.
Other challenges that exist for Asia as a region were discussed at the forum, namely how to create a global reach and foresee the future; how to grab opportunities and plan strategically; and how to rekindle growth to stave off economic crises.
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Pictorial Events
International Networking Gathering EuroCham in cooperation with AmCham and Indonesia Canada Chamber of Commerce held the International Networking Gathering in Surabaya. The event was attended by Chamber members, professionals, business leaders, and invited guests.
PHOTOS: The President Post/Heros Barasakti
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March 12, 2012 B5
Pictorial Events
Google Launches Indonesian Office 2012 PHOTOS: The President Post/Heros Barasakti
Google announced its presence in Indonesia as well as introduced its Country Head of Google Indonesia, Rudy Ramawy. “I am grateful for the positive responses we received from our users and our partners in Indonesia,” said Rudy. “Our presence in Indonesia reinforces Google’s commitment to get closer to users, partners, and stakeholders in Indonesia,” he concluded. The ceremony was also attended by Google Southeast Asia managing director Julian Persaud, who expressed his hope that Google Indonesia could contribute to the development of Indonesian businesses, including small and medium-scale ones.
Lifestyle Expo 2012
Secretary Night PHOTOS: The President Post/Heros Barasakti
Hong Kong Trade Development Council held Lifestyle Expo 2012 to promote consumer products to overseas market. The exhibition was held at Jakarta Convention Center presenting various high quality products such as electronics, gifts & souvenirs, household products, electrical appliances, watches & decorative clocks, fashion & accessories.
PHOTOS: The President Post/Heros Barasakti
PHOTOS: The President Post/Rians Riuco
EducationUSA Fair U.S. Ambassador Scot Marciel gave opening remarks at EducationUSA Fair in Jakarta. The EducationUSA Fair, a free event targeting U.S. higher education students and coordinated by AMINEF/EducationUSA and the U.S. Embassy, was held in Jakarta, Surabaya (East Java) and Medan (North Sumatra). The Fair is part of the U.S. Government’s larger initiative to contribute to the goals set forth in the Comprehensive Partnership agreement between President Obama and President Yudhoyono in 2010 to double the number of Indonesians studying in the U.S. in the next five years. 59 American universities participated, representing a cross-section of American higher education, including public universities, private universities and community colleges. During the Fair, representatives of the US Embassy Consular Office provided detailed information about the visa application process.
Jababeka Secretary Club (JSC) held “Secretary Night”, an entertainment event on President Executive Club. Andre Hehanusa performed and entertained the guests, mostly the secretaries from various companies in the Jababeka industrial area. Attractions and entertainment such as dancers, fashion and makeup show, action humor were featured at the event.
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Breakfast Dialogue Indonesia - EU Unique Partnership through CEPA PHOTOS: The President Post/Alif Dagna
EU is a unique and complementary commercial partner of Indonesia, providing jobs for Indonesians through substantial investments in valueadding sectors and boosting Indonesia’s financial reserves through its substantial trade surplus. By Jeannifer Filly Sumayku
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n view of the importance at Indonesia and the European Union partnership through Comprehensive Economic Partnership Agreement (CEPA), The President Post and Financial Club Jakarta held a Breakfast Dialogue entitled “Indonesia and the European Union: A Unique Partnership for Prosperity”. Participants of the dialogue were Julian Wilson, Delegation of the European Union to Indonesia and Brunei Darussalam, and ASEAN, David O’Sullivan, Chief Operating Officer of the EU’s External Action Service, Airlangga Hartarto, Chairman of Commission VI DPR-RI, Sofyan Wanandi, Chair of APINDO, and Emirsyah Satar, CEO of Garuda Indonesia and Vice Chairman of Kadin. The dialogue discussed the commercial and investment relationship between Indonesia and the EU, specifically the start of negotiations of a Comprehensive Economic Partnership Agreement (CEPA) between two parties.
“We already are a major trading and investment partner of Indonesia. We believe it is very beneficial in terms of trade and investment to have an agreement with Indonesia. It is a win-win solution for both sides,” O’Sullivan said. If CEPA could be adopted soon, more European investors will come to Indonesia as pledged by EU Ambassador to Indonesia Julian Wilson. Airlangga Hartarto, Sofyan Wanandi, and Emirsyah Satar agreed that the EU is a unique and complementary commercial partner of Indonesia, providing jobs for Indonesians through substantial investments in valueadding sectors and boosting Indonesia’s financial reserves through its substantial trade surplus. Sofjan Wanandi said that he expected EU investment to provide benefits to small- and medium-scale enterprises (SMEs), a sector on which Indonesia relied heavily for growth. Aside of common terms in trade
FINANCIAL CLUB J AK AR T A
agreement such as market access and investment, the CEPA also consists of trade facilitation and capacity building. The agreement
would apply gradual tariff reduction within a period of nine years, eliminating 95 percent of tariffs and possibly even the remaining
5 percent. The capacity-building program would include a permanent forum for business-to-business and business-to-government
technical dialogue and joint financing for programs. Europe is the second largest investor in Indonesia, but gets only 1.6 percent of its total investment in Asia last year while the remaining 98.4 percent went elsewhere. In 2011, European investment in Indonesia was $2.2 billion, the second largest after Singapore of $5 billion. Meanwhile, trade value of both sides reached $32 billion with surplus for Indonesia of $8 billion. EU companies also em-
ploy over 500,000 employees in Indonesia. The dialogue was attended by ambassadors, prominent business leaders, among others Tomas Smetanka, Ambassador of Czech Republic, Jakob Friis Sorensen, Chairman of Eurocham, Haslam Preeston, Chairman of Britcham, Dr J Scott Younger, President Commissioner of Nusantara Infrastructure, FrancoisJoseph Ossude, President Director of CMA-CGM, and others.
Financial Club Jakarta & The President Post cordially invite you to:
Breakfast Dialogue “Antisipasi Pencegahan Kejahatan dan Terorisme di Lingkungan Usaha” (Conducted in Bahasa Indonesia)
Speaker Thursday, 12 April 2012 08:00 - 10:00 am (Registration & Breakfast start at 7:00 am) Registration Fee: Member: Rp 150,000 Guest: Rp 200,000
Jenderal (Purn) Prof. Tan Sri Drs. Da’i Bachtiar, SH, AO Ketua Presidium Lembaga Cegah Kejahatan Indonesia (LCKI)
Payment can be transferred to: The Financial Club BCA Cabang Sudirman 035 30 28437 Dress code: Business Attire RSVP: Financial Club Jakarta Lita Hidayati - 021 250 5090 lita@finacialclub.co.id The President Post Detia Hutami - 021 572 7337 detia@thepresidentpost.com
Financial Club Jakarta
Graha CIMB Niaga 27th Floor, Jl. Jend. Sudirman Kav. 58 Jakarta
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International The 3rd Pasar Malam Indonesia Promotes “New Indonesia” to Dutch Community PHOTOS: www.pasarmalam.indonesia.nl
Pasar Malam Indonesia 2012 attracts more than 8.500 visitors, both local Dutch and Indonesian to enjoy the authentic taste of Indonesian cuisine. By Jeannifer Filly Sumayku
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asar Malam Indonesia 2012 was held for the third time and aimed not only for the old sake romantics between Indonesian and the Dutch, but more as means to strengthen bilateral relations between both countries. Indonesian Ambassador for the Kingdom of the Netherlands Retno L.P. Marsudi stated this during her remarks at the opening ceremony of the Pasar Malam Indonesia 2012. Pasar Malam Indonesia 2012 which was held at Malieveld, The Hague, Netherlands is an integrated promotional event that is intended to bring the nuance of “New Indonesia” to the Dutch community. Indonesia, as emphasized by H.E. Mrs. Retno L.P. Marsudi, has progressively been transforming, which of course should be viewed as a level counterpart and an opportunity to be capitalized particularly in the interaction of trade, investment, and tourism with the Netherlands. Minister for European Affairs and Development Cooperation, H.E. Mr. Ben Knapen also delivered his appreciation upon Pasar Malam Indonesia 2012. “Pasar Malam Indonesia 2012 has brought a new chapter in bilateral
relations with Indonesia. It is not only a showcase of Indonesia’s diversity in art, culture and authentic culinary. It is also a display of Indonesia economic progress, showcasing Indonesia’s promotion on trade, tourism and investment,” he stated. H.E. Mr. Ben Knapen also noted that the current cooperation of Indonesia and Netherlands is now being focused on the issues of food security and water management. The opening ceremony was attended by the Chairman of the Hoge Raad der Nederlanden (Supreme Court of the Netherlands), H.E. Mr. Geert Corstens, with several others ambassadors from foreign countries, as well as other invited guests. Pasar Malam Indonesia 2012 was held for four days, from 29 March 2012 until 1 April 2012. With entrance fee for only 5 Euro, Pasar Malam Indonesia 2012 attracts more than 8.500 visitors, both local Dutch and Indonesian to enjoy the authentic taste of Indonesian cuisine, served at the Food Court area presenting Manado, Padang, Palembang, and also the Sunda cuisines. Culinary promotion will not only represent the image of Indonesian culture, but also will open up market opportunities for travel industry on tourism sector.
There were also special performances by Indonesian artists namely Denada, Ello, Edo Kondologit, and traditional dance performances from Toraja, Jambi, and West Java. As part of the campaign on “New Indonesia”, Pasar Malam Indonesia also showcases an architectural and design exhibition by Ikatan Arsitek Indonesia di Uni Eropa (Indonesian Architect Association – European Union), presenting 164 architectural display
from Indonesia and film promotion pavilion. 14 representatives of Indonesia’s Ministries and Local Government, consisting of; Ministry of Tourism and Creative Economy, Ministry of Cooperative Small and Medium Enterprise, Ministry of Communication and Information Technology, Indonesia Investment Coordinating Board, and several others Provincial Government such as; Bangka Belitung,
Central Java, Jambi, Batam, West Java, Surabaya, Sabang, Bandung, Pekalongan, Ambon, and also Indonesia’s Flag Carrier Garuda Indonesia. A number of small and medium enterprises also present. A forum of public dialogue was also held in the second day of Pasar Malam Indonesia 2012. Pasar Malam held this forum in cooperation with the Ministry of Communication and Informatics
of the Republic of Indonesia, taking topic of “Indonesia Baru dalam Perspektif Ekonomi dan Politik”. Three speakers attended the forum, namely: Firmansyah (Den of the Faculty of Economics, University of Indonesia), Malik Gizman (Lecturer of the University Paramadina), and Suprawoto (Expert Staff of the Ministry of Communication and Informatics). The dialogue mainly discussed about the current development of political situation, economy, and
democracy in Indonesia that recently central heated-up with civil commotion protesting the hike of gasoline price. The speakers also mentioned that this situation is a part of the process toward transparency, marking a “point of no return” in the democratization of Indonesia. Pasar Malam Indonesia 2012 was ended on 1 April 2012, with an estimated 9000 visitors at its closing ceremony.
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Technology www.techinasia.com
Instagram for Android Finally Released Instagram just announced that it’s making an Android version and the application is already available on Google Play Store for free. Since its launch in 2010, the app has been an iOS exclusive, and today after years of waiting, it’s finally up as a free public download. Instagram was launched by co-founders Kevin Systrom and Mike Krieger. Instagram allows users to capture photos and edit them using a number of filters that give images a unique retro look. Pictures can then be shared with other Instagram users, and also shared on Twitter, Facebook or via email.
Microsoft Indonesia and the U.S. Embassy launched iMulai 4.0, a nation-wide business innovation competition sponsored by the U.S Agency for International Development (USAID) and Microsoft Indonesia.
iMulai 4.0
Raising Indonesian IT Startups
The event is in its fourth year, and intends to encourage Indonesian startups to submit their ideas for new products or new services that can help entrepreneurs do business.
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icrosoft Indonesia and the U.S. Embassy launched iMulai 4.0, a nationwide business innovation competition sponsored by the U.S Agency for International Development (USAID) and Microsoft Indonesia. The event is in its fourth year, and intends to encourage Indonesian startups to submit their ideas for new products or new services that can help entrepreneurs do business. The ten winners will receive $300,000 from Microsoft’s BizSpark platform for IT startups (instead of fifteen winners and $250,000, as occurred at last year’s iMULAI 3.0), also hardware to support their businesses, and free participation n a special boot camps to help them develop their business innovation. Besides, the winners will have the opportunity to present their products to a group of local and global venture capitalists.
USAID mission director Glenn Anders said, “We know that technology innovation stimulates improvement in business productivity. By giving entrepreneurs the tools they need to succeed, we are also promoting economic growth and prosperity in Indonesia and the global market.” Unlike other competitions, IMULAI has a vision of not only helping the winners bring their ideas to fruition, but also to provide evidence to the business community at large that innovation is key to Indonesia’s future economic development. This is part of the commitment made by Microsoft Indonesia and the U.S. Embassy to foster Indonesia’s development as a competitive, knowledge-based economy. One of last year’s winners, Shieny Aprilia, co-founder of Agate Studio, a game developer stated “IMULAI is a place for startups to learn how to create a great business.” Shieny added, “This competition helps connect startups with
“IMULAI is a place for startups to learn how to create a great business. This competition helps connect startups with the real business world, which includes business experts, venture capitalists, and investors.” the real business world, which includes business experts, venture capitalists, and investors.” After the launching at Jakarta, it held workshops in other four cities namely Makassar, Samarinda, Palembang and Surabaya. The submission period will close on May 7th. Interested applicants please visit www.imulai.org for additional information.
The Resolutionary iPad 3 The new iPad 3 is not revolutionary, it’s evolutionary, and according to Apple it’s even “resolutionary”. The new third-generation iPad, comes packing a new high-resolution Retina display. “Until you see it you can’t understand how amazing it is”, said CEO Tim Cook. The Apple Retina Display smoothes out edges and renders text pin-sharp so eBooks, websites and documents are so much easier on the eye. There’s better contrast, greater definition with still and moving images, and better color saturation – an improvement of 44 per cent over the iPad 2, Apple reckons.
There is also a brand new feature in the iPad, an iSight camera on the front and a new rear camera that runs at 5MP, with a backside illuminated sensor, 5 element lens and a hybrid IR filter. It looks to be the same camera equipment shipped in the iPhone 4S, aside from the slightly lower resolution sensor. This allows the new iPad to record HD movies at 1080P. The device ships with iOS 5.1, the latest version of Apple’s software. The new iPad also has quadcore LTE 4G capabilities, allowing for much faster network access and download speeds. The new chip is dual-mode and includes 3G HSPA+ for up to 21Mbps, and dual-carrier HSDPA for up to 42Mbps.
This allows for technologies beyond simply LTE on both Verizon and AT&T, which will carry separate versions of the iPad. This way the new tablet can be even faster than the current LTE technologies allow for. Initial LTE partners include Telus, Rogers, Bell, Verizon and AT&T. In a very nice new addition, the new iPad will also act as a 4G hotspot, something that the current iPad does not do. Apple also introduced the brand new iPhoto for iPad, a basic photo editing,
photo-beaming from device to device and a new Photo Journals (collages) feature. The new version of iPhoto offers a host of gesture-focused photo editing options including automatic horizon straightening as well as more detailed information about the images you’ve imported from other cameras. Images up to 19 megapixels in size are supported. The new iPad is priced at $499 for 16GB, $599 for 32GB, $699 for 64GB, and $629, $729, and $829 for 4G.
www.apple.com
Instagram announced during the annual South by Southwest conference that its Android app would be better than Instagram for the iPhone in a number of ways, and now Android users can find out exactly how the new build stacks up. What took the startup so long to bring what’s clearly an extremely popular app to Android? “I don’t think it took us so long. We just had priorities. Had we tried to be both on Android and iPhone at the same time, it would’ve been tough to innovate in the way that we have,” co-founder Kevin Systrom said on the launching.
The app features the same array of hipsterfriendly filters, which helped to make the app a gigantic success with over 30 million users on the iPhone and the iPod touch. Instagram will output a maximum resolution of 2048x2048, limited by the manufacturer’s camera and available application memory. However, features like Tilt Shift / Blur, Share to Flickr, Share from Feed and Live Preview haven’t been included in the first version of the application. The app, which has been responsible for over a billion photos uploads at a rate of five million a day, is a free download for any handset running Android 2.2 and above. It is not, however, compatible with tablets at this time. Instagram for Android is available for download in every country and is translated into English, Chinese, French, German, Italian, Japanese, Korean, Portuguese and Spanish. On the day of launch there were over 430k people who signed up on the waiting list.
SECTION
The President Post
Infrastructure
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C
RI Needs $70b a Year For Infrastructure The President Post/Heros Barasakti
Indonesia must improve its infrastructure and interconnectivity to attract big investment to the country.
I
ndonesia will need to spend $70 billion a year on infrastructure for the next five years in order to keep economic growth at an annual rate of 6 to 7% or higher, said a global publishing, research and consultancy firm in Jakarta recently. “The weakness of Indonesia’s economy is the infrastructure. This is a daunting task for Indonesia, to connect the urban and rural areas in this vast archipelago,” Paulius Kuncinas , the regional editor of Oxford Business Group (OBG) told the press during the launch of Report Indonesia 2012. Kuncinas urged the government to increase investment through public-private partnership scheme. He said the government needs to give guarantee and provide assurance to investors who pour their money in Indonesia’s infrastructure sector. “If one or at least three PPP projects worked out well, it will definitely be followed by the others,” Kuncinas said. He said Indonesia must improve its infrastructure and interconnectivity to attract big investment to the country. Kuncinas said Indonesia’s strong economic growth during the global economic crisis, an upgrade to investment grade, has a prospect to draw more direct investment.
“Indonesia is positioned as a save haven to investors who seek safe place for their capital investment,” Kucinas said. “Another challenge is that Indonesia has to reduce red tape in a bid to attract investment for its major projects,” he added. According to the OBG report, during President Susilo Bambang Yudhoyono’s first five-year term in office, just 125 kilometers of highway were built. In comparison, China added 4,710km of highway in 2009 alone. Economic researcher of the Indonesian Science Institute (LIPI) Latif Adam said infrastructure facilities in Indonesia are still inferior to those of India and China. “In the 2005-2011 period, Indonesia`s infrastructure had increased by 25.5%, still far from the infrastructure spending ratio against the Gross Domestic Product (GDP) of five pct,” Latif said in “Indonesia Infrastructure Outlook 2012” in Jakarta recently. Latif said the 2011 infrastructure spending amounted to Rp141.0 trillion with a 2.1% ratio, while in 2012 it amounted to Rp161.4 trillion with a ratio of 2.2%. “It increased indeed, but it was actually still far from the ideal infrastructure spending ratio of 5%,” Latif said. Latif added that the infrastructure spending elasticity coefficient reached only 0.17% of the Indonesian growth rate of one pct. In the
meantime, China has reached 0.33% and India 0.21% against the 1% economic growth in these countries. “This means that our infrastructure sector is still lacking in efficiency,” Latif said. Latif hoped the government would be able to optimize its infrastructure sector not to become behind those of other countries. The publication, which marks OBG’s fifth year of operations in the country, also analyses the country’s efforts to strengthen its role on the regional and international stage during its term as chair of ASEAN in 2011. Trade Minister Gita Wirjawan said he was optimistic that Indonesia could resolve the infrastructure problem. “We are currently working on the 2x10,000 megawatt Central Java coal fired power plant, the Soekarno-Hatta International Airport-Manggarai railway, Kuala Namu Airport, the Umbulan spring water supply system and the Tanah Ampo Cruise Terminal. I am sure we can handle the infrastructure problem,” Gita said. He also said that the National Development Planning Board (Bappenas) had 13 projects at the top of its priority list worth $27.5 billion.
Better Infrastructure May Boost Tourism: Minister The development of tourism in Indonesia is hindered by three problems, namely problems associated with hygiene, security and infrastructure despite the vast potential the country has to offer, a minister says. Speaking at a national working conference of the Indonesian Hotel and Restaurant Association (PHRI) in Makassar, South Sulawesi recently, Minister of Tourism and Creative Economy Mari Elka Pangestu said: “Security is improving, but hygiene and infra-
structure still constitute big handicaps for tourism in Indonesia.” Mari said that at a number of tourism facilities, including airports, railway stations, seaports, bus terminals, hotels and restaurants, hygiene had not been well-maintained, thereby affecting convenience for tourists and visitors.
Security is improving, but hygiene and infrastructure still constitute big handicaps for tourism in Indonesia.” Mari Elka Pangestu Minister of Tourism and Creative Economy
At present, Indonesia is in 125th position out of 139 countries surveyed in terms of hygiene. “We have to rectified this for ourselves — we will surely feel inconvenienced whenever we visit places without proper hygiene. So do tourists as they come here to enjoy beauty and relaxation,” she said. Mari invited PHRI and all stakeholders to jointly improve hygiene and beauty in public places, especially at tourist destinations.
The President Post
C2 March 12, 2012
www.thepresidentpost.com
Property CUSHMAN & WAKEFIELD’S Global Property Investment Outlook
Hike in Investment Activity Expected in H2 to Give Strong Finish to 2012
“A return of better economic growth is key to the strength of the recovery but the most crucial point for the timing of that recovery will be the confidence in growth rather than the growth itself” commented Greg Vorwaller, head of global Capital Markets at Cushman & Wakefield. “Sustained job growth will be a vital boost to absorption but ahead of that, a rally in sentiment should be enough to trigger a steady release of pent up occupier demand for effective, modern space as stalled business plans are put back into action, helping investment, banking and development markets. However even if confidence stays low or a new crisis emerges, property is still going to remain high on the agenda even as tenant demand falls– for investors as they look for secure incomes and for occupiers as they look to cut costs and utilize their asset base to its fullest extent.” Potential growth and changes in occupier demand are a particularly dynamic area of the market, with tenants seeking space to better meet their business objectives not just to house more staff. Demand is emerging to tackle new markets and to cut occupational costs but also to address changing structural issues such as energy costs, sustainability, technological change, demographic and working practice changes and of course e-commerce
Regional investment opportunities
With investors seeking securi-
gateway capitals of Singapore and Hong Kong but capital will also take advantage of the growth in Seoul of sophisticated modern retail centres which have been in very short supply.
Global Commercial Property Investment Volumes (excluding multifamily) Prime Yield
700
8.2%
600
8.0%
500
7.8%
400 7.6% 300 7.4%
200
7.2%
100 0
John Stinson, Head of Asia Pacific Capital Markets, Cushman & Wakefield, said, “While we expect the first half of 2012 to continue last year's trend of a move back to core product in gateway markets, from mid year on we anticipate an increase in activity in the emerging markets. Strong local conditions, unprecedented numbers of opportunities and favourable investor sentiment will see more international capital deployed in India for example, initially in residential and then in office products in Bangalore and around NCR.
All-Sector average prime yield
Investment Volume
Annual Investment Volumes (US$n)
G
lenn Rufrano, Global President & CEO of Cushman & Wakefield said: “We are witnessing increased risk tolerance in the securities and real estate markets. As the economic news firms, particularly in the sovereign debt and banking markets, these trends are expected to accelerate in the second half of the year.” Cushman & Wakefield anticipate volumes for the year to be little changed overall on 2011, at $710-720bn, ($805-815bn including multifamily) but within this total, a potential 20% increase between the first and second halves of the year is expected, with activity picking up due to stronger demand as well as increased investment supply resulting from bank loan sales and recapitalizations.
0 7.0% H1 07
H2 07
H1 08
H2 08
H1 09
H2 09
H1 10
H2 10
H1 11
H2 11
H1 12
H2 12
Source: Cushman & Wakefield, RCA, KTI and Property Data
In China, the global investor community is now differentiating and seeing markets within markets, with the key cities of Shanghai and Beijing being the pick for office exposure. Strong turnover will continue to drive excellent fundamentals for investment in mid to high end retail malls in either high street Tier 1 locations or strong Tier 2 cities such as Chengdu.”
Global Commercial Property Investment by Region (ex-multifamily) APAC
EMEA
North America
Latin America
1200
Annual Investment Volumes (US$n)
‘Despite the currently cautious mood in most global property investment markets, a stronger second half of the year is expected with a potential 20% hike in activity levels forecast, driven by increased confidence and a release of pentup investor and tenant demand.’ according to Cushman & Wakefield’s latest research, the International Investment Atlas 2012, released today.
1000 800
Handa Sulaiman, Head of Indonesia Capital Markets, Cushman & Wakefield, said, “Indonesia has obtained a stronger focus for investment, either for expansion or new entrance by both foreign and domestic investors. We foresee that Office, Hotel and Industrial are the three property sectors that shall continue to improve during 2012. Strong growth of economy has also led to a healthy demand level for both leasing and sales in the apartment sectors. This trend has caused substantial increase in land price in Jakarta and some favorite residential estates in major cities.”
600 400 200 0
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Source: Cushman & Wakefield, RCA, KTI and Property Data
ty and liquidity, gateway cities will be in strong demand in all areas of the globe, according to the report. David Hutchings, Head of European Research, Cushman & Wakefield, said, “London will continue to stand out due to the sheer depth of its market as well as the long term growth it offers but despite it being an Olympic year, it may have to put up with a silver medal for investment, with New York likely to again take gold, benefitting as it does from not just scale but also pent up recovery potential which will be released at some point.” Investors are also set to look
ing to emerge as investors look beyond the region or country that a market lies in to better understand its true risks and growth potential.
Office, Hotel and Industrial are the three property sectors that shall continue to improve during 2012.
The Americas set to lead the recovery
Asia Pacific – strong interest to continue with renewed activity in emerging markets in H2
more widely for opportunities this year, some taking on more risk, other re-evaluating what risks they are ready to face. In fact, a new hierarchy of targets is start-
Commenting on the America’s, Greg Vorwaller, Global Head, Capital Markets, Cushman & Wakefield, said “The Americas look likely to see the fastest growth in investment activity again this year, focussed on the US. However for those willing to look behind the headlines, Mexico presents some compelling opportunities in prime retail, office and industrial for premium risk adjusted yields. The industrial sector in particular should benefit from the on-shor-
Last year Asia saw a 42% increase in industrial investment and a 26% rise for retail, with no significant change for offices or hotels. These trends will continue in 2012 with a focus on Japan, Hong Kong and Singapore for industrial, mainly in logistics. In retail, Cushman & Wakefield expect to see continuing interest throughout China as well as the
ing and near-shoring of manufacturing. Brazil remains a place where truly global investors must take a position given the relative growth of the economy and absolute growth of its middle class. Industrial and retail continue to offer attractive opportunities for those seeking stable growth with capital appreciation in mind, providing tax and currency risks are accounted for. In the US, beyond prime assets in prime markets, investors should begin to focus on prime assets in secondary cities that have historically performed well on a supply/ demand basis through economic cycles. Also, they will continue to pursue well located industrial and retail properties, extending the rally that began in these sectors in 2011. Lastly, in view of the growing book for loan maturities, recapitalizations of well positioned but over-levered properties could provide investors with solid current returns, plus upside.”
EMEA – choice of markets widens for low risk investors in 2012
Michael Rhydderch, Head of EMEA Capital Markets, Cushman & Wakefield, said, “In Europe, low risk investors will continue to have a wider choice of markets than they realise with the focus on Germany and the Nordics, particularly for retail. France and the UK are perhaps a little riskier now – with slower economic growth and more recent property price appreciation – but they offer good medium term growth and higher return potential in development and refurbishment in London and Paris.” He continued: “Elsewhere, Poland is an easy pick to make but a crowded market to buy in and one that really has to be seen as more core than value-add these days. Indeed, for those seeking higher returns, they will need to look towards the fringe – with Russia a very exciting market at present and Turkey set to perform well – or towards what are currently less favoured segments of the market. In particular investors need to look at where distress is likely to emerge but can be married with attractive long term fundamentals – be that from repositioning retail space in a range of markets, from an undersupply of modern retail or offices in some Italian cities or a shortage of modern logistics to rent in Spain and Portugal.”
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The President Post
C4 March 12, 2012
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Tourism Tourist Attractions Support Visit South Sulawesi 2012 The province is rich in marine, natural, cultural, historic and agro tourism destinations that will make Visit South Sulawesi 2012 a great success.
T
he `Visit South Sulawesi 2012` tourism campaign is touted to be a great success as it is supported by many tourist attractions in the province of South Sulawesi. The province is rich in marine, natural, cultural, historic and agro tourism destinations that will make Visit South Sulawesi 2012 a great success, according to officials. In a bid to facilitate the success of this campaign, the South Sulawesi provincial government`s tourism office is promoting various tourism destinations, particularly the Taka Bonerate Marine Park. Located at Takabonrate Island in Selayar district, it is famous for having the third largest coral atoll in the world after Kwajifein in the Marshall Islands and Suvadiva in the Maldivian Islands. Swimming, diving, snorkeling, and fishing are some of the fun activities at Taka Bonerate Marine Park. “With beautiful tourist attractions such as Tana Toraja and Taka Bonerate Marine Park, we are going to make Visit South Sulawesi 2012 a success,” South Sulawesi Tourism Office Chief Syuaib Mallombassi said in the provincial capital of Makassar over the weekend. He noted that Taka Bonerate Marine Park has the world`s third largest coral atoll, along with beautiful, healthy coral reefs and marine fauna in Selayar district. Syuaib further said that to increase the number of tourists visiting Taka Bonerate, the South Sulawesi provincial government will cooperate with Express Air to provide daily air transportation
destinations, such as Rotterdam Fort, Somba Opu Fort, the tomb of Syech Yusuf, the tomb of Prince Diponegoro, the tomb of Tallo King, Mandala Monument, Losari Beach and Paotere harbor to see traditional Pinisi schooners.
to the tourism attractions in Selayar. “Besides, we will also provide tourists with speed boats from Selayar to Taka Bonerate every day,” Syuaib said, adding that an airport would soon be built on Selayar Island to support the tourism campaign.
Taka Bonerate Marine Park
Bantimurung Waterfall
Meanwhile, Suriadi Mappangara, an academician from Hasanuddin University, admitted that although Taka Bonerate is known for its beautiful marine park, the area`s supporting infrastructure remains inadequate. “Therefore, both the district and provincial governments should immediately manage the infrastructure in Selayar, which is the gateway to Taka Bonerate Island, to support Visit South Sulawesi 2012,” Suriadi said. In Maros district alone there are natural, historic, and agro tourism destinations that are being developed to support the campaign. Maros district head Hatta Rahman said in Makassar re-
cently that the district has at least 8 natural tourism attractions and most of them have been developed. “The natural tourism attractions that have been developed in the district include Bantimurung Waterfall, Pattunuang Natural Caves, Bulu Sipong Hill with its caves, Bonto Somba Waterfall, Lerang Pannige, Kuri Beach, and Karaenta Natural Preserve,” Hatta Rahman said. As for historical tourism sites, he said that the district has Leangleang prehistoric park, Leang Akkarrasa Rammang-rammang historic site, Kassi Kebo cemetery, Karaeng Simbang cemetery, Japanese fort, and Karaeng Loe Ri-
Indonesia Sees 10% Increase in Number of Malaysian tourists Indonesia is targeting an increase of 5-10% in the number of Malaysian tourists coming to the country in 2012 from 1.03 million last year. “We have set three kinds of target for tourists from Malaysia,” deputy director for tourism promotion for ASEAN region, Chrismiastutie, when met at the Matta Fair Tourism Exhibition here. She said the optimistic target is set at 1.3 million people, the moderate one is around 1.25 million and the pessimistic is around 1.2 million. “Seeing the enthusiasm of Malaysian people who came to the Matta Fair we hope the increased target would be achieved,” she said. She said the presence of the Indonesian stand at the fair had been waited for by visitors who wish to know more about Indonesia. Visitors have inquired about tourism objects in Aceh, Padang, Medan, and other places in Su-
A bigger number of visitors to the Indonesian stand certainly shows how big is their interest to our country.” matra as well as places in Java such as Bandung, Garut, Solo, Semarang, Yogyakarta, Surabaya and Bali, Lombok and Makassar. The ministry of tourism and creative industries has provided booths in the stand for tourism businessmen from a number of regions. “We provided 100 booths and almost all of them are fulfilled,” she said. Business meetings have been held among travel agents from the two countries. “The results are
encouraging as 4,500 tour packages have been agreed with a total value of around Rp15,750 billion for objects in Sumatra, Java, Bali and Sulawesi,” she said. “A bigger number of visitors to the Indonesian stand certainly shows how big is their interest to our country,” she added. Yogyakarta has opened a stand of its own with around tourism businessmen. The chief of the Yogyakarta chapter of the Association of Indonesia Tours and Travel (Asita), Edwin Ismedi, said his office had participated in the exhibition six times and the results were good as the number of tourists from Malaysia to Yogyakarta is increasing. In 2011 Malaysian tourists are the four biggest after those from the Netherlands, Japan and France totalling around 17,500 compared to 26,000 from the Netherlands. “The number is still small compared to that for Bali and Bandung,” he said.
Hotel Association Wants Govt Control Over Tourists to Bali Bali`s Chief of Hotel and Restaurant Association (PHRI), Tjokorda Oka Arta Ardhana Sukawati, suggests that the government controls the number of tourists coming to Bali. “The development of tourism in Bali during the past few years has emphasized quantity instead of quality of tourists coming to the island,” he said. Tjokorda gave the example of cheap accommodation
in Bali that attracts many tourists but, consequently, increases the density of population in the island.
group) without being disturbed by the public transportation and private cars flocking the area,” he explained.
He said the large number of tourists coming to Bali also had a negative impact on the local culture. “People in Ubud (north of Bali), for example, can no longer conduct cultural activities such as Mapeed (walking together in a
He hoped that the government would give PHRI the authority to control the tariffs of star hotels in Bali. He also suggested that the government impose sanctions on hotels that do not meet required standards.
With beautiful tourist attractions such as Tana Toraja and Taka Bonerate Marine Park, we are going to make Visit South Sulawesi 2012 a success.”
pakere traditional houses. Hatta Rahman added that Maros also has agro-tourism attractions such as the Pucak Safari Garden and various types of typically traditional food. About
For marine tourism, Ilham said Makassar would offers islets such as Khayangan, Lae-Lae, Samalona, Kodingareng, Barang Lompo, Barang Caddi, and resort areas like Akkarena Beach, Tanjung Bayam Beach and Tanjung Bunga Beach. He noted that the city would also offer religious tourist destinations, including the old Katangka Mosque, Raya Mosque, Al Markaz Al Islami Mosque and La Galigo Museum.
Tana Toraja
Bantimurung`s natural tourism, the Maros district head noted that it would be developed as per international standards with hotels, golf courses, and other facilities. Bantimurung Waterfall is a destination in South Sulawesi that tourists should not miss, as it can be reached in an hour’s drive from Makassar and a 30-minute drive from Hasanuddin Airport. Situated at the valley of a limestone hill with its fertile tropical vegetation, Bantimurung Waterfall is a government protected natural reserve that houses a beautiful waterfall and 1000 ha of surrounding forest. There are also several caves around the waterfall, which make this area an ideal habitat for many
types of butterflies and rare birds. Bantimurung also has a reservation of rare butterflies. Hatta Rahman said the naturalist Alfred Wallace collected specimens here in the mid- 1800s. Among the butterflies that he caught was the Papilo Androcles, one of the rarest and largest, with a tail like a swallow. According to Rahman, the best time to see butterflies is when the sun appears after a shower, as the butterflies form a riot of color while flying from one shrub to another. As for Makassar, the city will rely on its cultural and marine tourism to support the Visit South Sulawesi 2012 campaign. Makassar Mayor Ilham Arif Sirajuddin said tourists would be able to choose many attractive
For accommodation, Ilham said, “Our hotels will provide guests with up to 5,000 rooms, not to mention hostels for budget travelers and convention centers for national, as well as international events.” He pointed out that Makassar and the districts of Wajo, Maros, and Bulukumba dan Tanatoraja have been set as tourist destinations for Visit South Sulawesi 2012. Known for its unique culture and ancient traditions, Tanatoraja is one of the districts with beautiful hills and valleys stretching side by side along the slopes of the mountains in South Sulawesi. The center of tourism is Rantepao, around 328 km away from Makassar city.
Central Sulawesi to Host Sail Tomini 2014 From the tourism point of view, Sail Tomini would be an important event for the province to promote its potential in order to attract as many domestic and foreign tourists as possible. The Central Sulawesi province of Indonesia will host the international marine event, Sail Tomini in 2014, which it had been planning to organize since 2010. This development follows a decree issued by President Susilo Bambang Yudhoyono. According to the Presidential Decree No. 4/2012, Central Sulawesi will be hosting another marine event, Sail Morotai, this year in September. Sail Morotai 2012 will be followed by another event, according to a proposal made by the East Nusa Tenggara provincial administration to the central government. The proposed international marine event will be called Sail Komodo 2013, because Komodo has become well-known after being added to the list of finalists in the New7Wonders of Nature competition. It is only after having hosted Sail Morotai 2012 and Sail Komodo 2013 that Central Sulawesi’s plan to organize Sail Tomini will materialize in 2014. The preparations, however, began two years ago in 2010. The province has many beautiful places that attract both domestic and foreign tourists. One of them is the Gulf of Tomini, after which the international marine event, Sail Tomini, has been named.
I N D O N E S I A CENTRAL SULAWESI
The bay is rich in fish and other marine resources, and is expected to emerge as a popular tourist destination thanks to its biodiversity and natural beauty. Speaking about the province’s plan to host Sail Tomini, the Chief of the Central Sulawesi Maritime and Fisheries Office, Hasanuddin Atjo, said in the provincial capital of Palu on Tuesday that Coordinating Minister for People`s Welfare, Agung Laksono, supported their efforts to host the marine event in 2014. “The minister fully supports Sail Tomini 2014, and has promised to help process the issuance of the Presidential Decree on the international marine event,” Hasanuddin added. Meanwhile, Governor Longki said that during a workshop on Sail Tomini in 2011, it was decided that Central Sulawesi would host the international marine event in 2014. To host the event, the governor said, he had formed a regional committee, proposed funds from the regional budget, and also prepared Sail Tomini 2014 brochures to be distributed in various countries. “We hope the central government will support the Sail Tomini 2014 after Sail Morotai 2012 and Sail Komodo 2013,” the governor said, expressing hope that the Presidential Decree on Sail Tomini 2014 would be issued together with the proclamation on Sail Komodo 2013. Longki noted that Central Su-
lawesi was famous for its underwater habitat and creatures, such as Gobi Fish (Bryaninops erythrops), Salvador Dali reef (Petrosia lignose), Ikan Behang (Plectorhinchus chaetodonoides), Cardinal Fish, Damsel, Platax pinnatus, Scorpaenopsis, Oxycephala, Goropa Fish, Butterfly Fish, Cockatoo Fish, Randal Fish,Parapterois hetururus, Bothus Sp, Half Face Fish, Frog Fish, and others. As part of Central Sulawesi’s efforts to host Sail Tomini 2014, the Tojo Una-Una district began preparations for the international marine event in 2010. Made up of the Togean Islands group, Tojo Una-Una is a major tourist destination in Central Sulawesi, owing to its beautiful underwater park across the Gulf of Tomini. The Togean Islands, located a few kilometers east of Palu in the Gulf of Tomini, have been named by the government as a national park with an ecosystem covering an area of 70,000 hectares. “We have started to prepare supporting facilities and infrastructure for Sail Tomini,” Tojo Una-Una district head Damsyik Ladjalani said. Damsyik noted that the construction of a ferry port at Ampana town on the Wakai Islands and a harbor in Togean, as well as an additional ferry ship to connect Ampana-Wakai-Togean and Gorontalo, were some of the preparations that had begun for the international marine event.
Meanwhile, Central Sulawesi Culture and Tourism Office spokesman Suaib Djafar said that from the tourism point of view, Sail Tomini would be an important event for the province to promote its potential in order to attract as many domestic and foreign tourists as possible. “We had previously planned to call the event “Sail Togian” but in our effort to involve the provinces of Gorontalo and South Sulawesi at the Gulf of Tomini, we changed our mind and decided to call it “Sail Tomini”, Djafar said. Sail Tomini 2014 is also supported by cellular phone operator PT Telecomsel, which will be investing Rp129 billion in the construction of a telecommunication infrastructure for the event. “The funds amounting to Rp129 billion will be spent on the construction of 43 Base Transceiver Stations (BTS) around the area where Sail Tomini 2014 will take place,” the company spokesman, Asbullah, said in Palu in December 2011. “We will fully support all district heads in Central Sulawesi in making Sail Tomini 2014 a success,” Asbullah said, expressing hope that all public groups in the districts and the province would do the same.
The President Post
www.thepresidentpost.com
March 12, 2012 C5
Travel Ambon Now Cruise Ships’
Regular Port of Call www.wecruise.co.uk
Between January 26 and February 23, 2012, Ambon saw the arrival of two luxury American cruise ships, the MV Discovery and the MV Spirit of Adventure; later a German cruise liner, the MV Amadea, also docked at the scenic bay of Ambon.
O
nce torn by a threeyear period of sectarian violence from early 1999 to 2001 that tarnished its image and the area?s tourism, the Maluku provincial capital city of Ambon is now becoming a regular port of call for foreign cruise ships. Between January 26 and February 23, 2012, Ambon saw the arrival of two luxury American cruise ships, the MV Discovery and the MV Spirit of Adventure; later a German cruise liner, the MV Amadea, also docked at the scenic bay of Ambon. Skippered by Captain Neil Broomhall, the MV Discovery, with 440 tourists from the United States, Canada, England, Australia, and New Zealand on board, was the first to have the luxury of coming alongside the wharf at Ambon`s Yos Sudarso Port in the
man Pieter Ohman said in Ambon that tourists from the United States, Canada, England, Australia, New Zealand, and Germany enjoyed their visit to many local tourist attractions. Pieter said the tourists also visited the World Peace Gong Monument at the Ambon city center, Victoria Fort, Pattimura Park, and also saw the Martha Christina Tiahahu monument on the slopes of Karang Panjang hill, overlooking the Bay of Ambon.
MV Discovery. Skippered by Captain Neil Broomhall, the MV Discovery, with 440 tourists from the United States, Canada, England, Australia, and New Zealand on board, was the first to have the luxury of coming alongside the wharf at Ambon`s Yos Sudarso Port in the early morning hours of Sunday, January 26.
early morning hours of Sunday, January 26. A week later, this was followed by the MV Spirit of Adventure with 213 tourists from various countries, which arrived in Ambon on the morning of Wednesday, February 1. The latest to dock there was the MV Amadea with 600 tourists on board on Thursday morning, Feb 23. The arrival of the three luxury cruise ships into Ambon Bay is not the last, because they will soon be followed by the MV Orion from Australia.
Because of the arrivals of those cruise ships, Maluku Governor Karel Albert Ralahalu has said that the city was ready to become a national and international tourist destination. In his welcoming address to greet 600 foreign tourists who arrived on the MV Amadea at Yos Sudarso Port on Thursday, Governor Ralahalu said Ambon was ready to take its place as a domestic and foreign tourist destination in Maluku. Meanwhile, the captain of the MV Amadea, Hurbert Flohr, said
tourists on board his cruise ship were deeply impressed by the hospitality of the people of Ambon and the greetings by Governor Ralahalu. Flohr agreed that Ambon had very interesting and beautiful scenery, unlike anything the tourists had seen during their 138-day voyage around the world. “Our visit to Ambon will be a lasting memory and we hope we can come here again next time,” said the Amadea captain. Maluku Tourism Office spokes-
Next, they tried to discover the history and culture of Ambon with a visit to the Ambon War Cemetery, where more than 1,000 Australian and 800 British soldiers had been laid to rest. Pieter said the tourists continued through the countryside for another visit to the village of Waai, known for its crystal clear freshwater spring that is home to a population of large eels, and then on to Suitela clove farm at Suli village. The tourists also witnessed the unique processing and traditional baking methods used for sago before tasting a little, and finally stopping at Liang Beach, where they could see the peculiar Crazy Bamboo dance as they viewed handicrafts made of wood, shells and mother-of-pearl.
Heart of Borneo Designated As “World’s Lungs” Kalimantan Island or also known as Borneo is host to a vast area of the country`s remaining tropical rainforests where various endemic flora and fauna can be found. Rainforests in the Heart of Borneo also have a crucial function as the lungs of the world because they produce oxygen needed to help overcome the impact of climate change. Given the important role of the rainforests, President Susilo Bambang Yudhoyono on January 5, 2012, signed a regulation authorizing the use of 45% of Kalimantan island as biodiversity conservation and tropical rainforest vegetation reserves to make the island the world`s lungs. “At least 45% of Indonesian Borneo will serve as the lungs of the world, with the plan ensuring that local ecosystems are protected and the biodiversity of the island is allowed to flourish,” a presidential press release said last month. Theremaining55%ofKalimantan island, however, can be used to support the government`s program to achieve energy selfsufficiency and the creation of national energy barns for electricity production and develop the island into a mineral, coal, oil and gas mining center, the regulation said. The forestry ministry`s secretary general, Hadi Daryanto, said “We hope with the decree, Indonesia will be able to meet its target of reducing gas emissions by 26% by 2020.”
At least 45% of Indonesian Borneo will serve as the lungs of the world, with the plan ensuring that local ecosystems are protected and the biodiversity of the island is allowed to flourish.”
Welcoming the signing of the presidential regulation on Kalimantan`s rainforest, Adam Tomasek, head of the WWF`s Heart of Borneo Initiative, said the new decree offers a fantastic opportunity to secure the future of Borneo as a place where sustainable development exists in balance with a practical and beneficial conservation regime. “WWF has been working for a long time with both National and local governments to develop spatial plans, and engage businesses and communities to drive conservation and sustainable development in Borneo. The decree is a leadership statement from the President of Indonesia that will help ensure the previous commitments on the Heart of Borneo will be met,” Tomasek said in a press release posted on the website of WWF Indonesia. Kalimantan`s tropical rainforests are the habitat of endemic animals such as orangutan, Rhino and Pygmy Elephant.
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C6 March 12, 2012
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Living
Who Gets More Vacation Days?
www.healthytravelblog.com
Germany, France, Spain and Denmark top the list with 30 paid vacation days, while the Netherlands, Sweden, Norway and the UK come in second with 25 days.
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arlier this week, voters in Switzerland went to the polls and said “no” to an additional two weeks vacation a year. In a national referendum, 66.5% opposed the chance to put Switzerland in line with its neighbor Germany, where employees enjoy six-week paid vacation every year. The Swiss apparently considered previous warnings of the government and business representatives who claimed that an additional fortnight of paid holidays increase labor costs and put their economy at risk. “In rejecting the initiative, citizens have kept a sense of reality,” says Hans-Ulrich Bigler, director of the Swiss Union of Arts and Crafts, which represents about 300,000 businesses, in a statement. The two weeks could have cost the economy 6 billion Swiss francs ($6.53 billion) a year, he says. Federal Councilor Jean-Francois Rime told the Telegraph that “the Swiss are reasonable enough” in saying no. But Travail Suisse disagreed. The Swiss trade union launched the “6 weeks vacation for all” campaign after it found that a third of Swiss employees suffers from stress at work and blamed the “no” faction of using scare tactics amid the eurozone crisis. Travail Suisse argues that, according to an estimate of the State Secretariat for Economic Affairs Seco, health problems as a re-
sult of the work load will cost the country 10 billion francs ($10.8 billion) per year. The Swiss vote touches a topic that has long triggered debate: Does total vacation time enhance or hurt a country’s economic performance? According to Bloomberg, countries with long vacations are not necessarily lacking strong economic performance. In a 2009 survey it revealed that although the U.S. was the world’s most competitive country, if you factor the GDP per hours worked each year some countries with higher vacation levels outperformed the U.S. Based on data from the Organization of Economic Co-Operation and Development, Belgium and the Netherlands, with 30 and 28 vacation days per year, respectively, were 2% more productive in 2009 than the US. Luxemburg was 27% more efficient while mandating 32 days vacation per year. Europe’s leading economies France and Germany were only 2% and 7%, respectively, behind the U.S. in terms of GDP per hours worked. A study by the American Economic Journal examined whether the elimination of a summer break influences student achievements. The results show that year-round schooling does not improve students’ academic success. In a vacation study between September 19 and October 9, 2011, by the online travel compa-
ny Expedia, 7,083 respondents across 20 countries were asked how many vacation days per year they receive and how many of them they actually use. Germany, France, Spain and Denmark top the list with 30 paid vacation days, while the Netherlands, Sweden, Norway and the UK come in second with 25 days. European respondents also turn most of it into holidays. German respondents said they use 28 of 30 days, while France, Spain, Sweden and Denmark use all of them. American respondents earn 14 days, from which they use 12. Asia, however, is more vacation averse. According to the survey, Japan is the most vacationdeprived nation in the world, with respondents saying they receive 11 paid days each year but only use five of them. South Koreans take seven out of their 10 days. Hard working employees can also be found in India, where five days from a total of 20 are not used, respondents said. “In India, vacations tend to be viewed as a guilty habit,” marketing head of Expedia India, Manmeet Ahluwalia, said in a press release. “As many as 54% Indians spend vacations usually secretly checking emails.” Besides economic performance, vacation levels might have an impact on the employees’ temper. Top scorers in the recent Legatum Institute’s list of the world’s happiest countries have many things in common. One of them, however, is a high number of vacation days. (CNN) www.v3im.com
The soaring popularity of smartphones and tablets is eroding the distinction between our business and personal worlds
Smartphones and Tablets Transforming Workplace The soaring popularity of smartphones and tablets is eroding the distinction between our business and personal worlds, says the head of British telecoms giant BT. Ian Livingston, BT’s chief executive officer, told Marketplace Europe the “consumerization” of business -- the trend for personal consumer devices such as smartphones and tablet computers to be used in the workplace -- was redefining the way we do business. “One of the things that we are seeing is the barrier between business and consumer is beginning to come down,” he said. “What was assumed in the past was very much [that] your business life is over here and your personal life is over there -- that is not true, certainly not true for most of your business people.” The consumer sector was now taking the lead when it came to innovations in communication technology, giving workers the opportunity stay connected on their personal device around the clock --
whether in the office, at home or traveling. “People are going to become networked all the time,” he said. “I think we are just at the beginning of this revolution.” While there were clear benefits for businesses to be had from the new reality, it also raised challenges around security. “It used to be that the IT department would say: ‘How can I stop people from using it on our corporate network?’” he said. “Today it is ‘How can I help people use it securely on the corporate network?’” Through initiatives such as the company’s “First Time Right” program, it had managed to reduce its cost base by £3 billion ($4.7 billion) over three years -- and halved the number of complaints received. “Take the failures out of the business -- and we have done a lot of that -- and the costs fall out automatically,” he said. “That cost transformation has got more to go, and it also frees up money and people to invest in the future of business.” (CNN)
According to Bloomberg, countries with long vacations are not necessarily lacking strong economic performance. In a 2009 survey it revealed that although the U.S. was the world’s most competitive country, if you factor the GDP per hours worked each year some countries with higher vacation levels outperformed the U.S.
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March 12, 2012 C7
Health RI to Have More International Hospitals by 2014: Minister www.infopublik.org
It seems that for many upper-class Indonesians, the country`s medical services are not satisfactory enough, so they seek medical treatment in foreign world-class hospitals. Their decision is partly understandable, given that only five out of 1,800 hospitals in Indonesia are internationally accredited, and all five are privately-owned.
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here is no doubt that only the haves could afford placing obituary ads in newspapers. And from these obituaries, it becomes obvious that most of these people died in overseas hospitals. Many wealthy Indonesians spend trillions of rupiah each year on medical treatment abroad, such as in Singapore, Malaysia, United States, Australia and Germany, despite the fact that Indonesia has some 1,800 hospitals. It seems that for many upperclass Indonesians, the country`s medical services are not satisfactory enough, so they seek medical treatment in foreign world-class hospitals. Their decision is partly understandable, given that only five out of these 1,800 hospitals in Indonesia are internationally accredited, and all five are privately-owned. In February, Health Minister Endang Rahayu Sedyaningsih said that 65 to 66% of the country`s 1,800 hospitals were nationally accredited, and of the total number, one-third were privately owned. She provided these figures during her opening remarks before the Indonesian Professional Medical Recorders Association (PORMIKI) in Pontianak, West Kalimanan.
No public or state-owned hospitals have yet to be internationally accredited because they had not met the required standards for quality, including in medical record services, she said. But the health ministry is now preparing seven state-owned hospitals to qualify for international accreditation. “We are honing them for international accreditation,” she said. The minister said maintaining medical records is a very important part of hospital services and one of the requirements to be internationally accredited. The seven state-owned A-class hospitals expected to receive international accreditation by 2014 are Cipto Mangunkusumo Hospital (Jakarta), Sanglah Hospital (Denpasar, Bali), dr. Sardjito Hospital (Yogyakarta), Fatmawati Hospital (Jakarta), H. Adam Malik (Medan, North Sumatra), dr. Wahidin Sudirohusodo (Makassar, South Sulawesi), and the Central Army Gatot Subroto Hospital (Jakarta). The health ministry`s Director General of Health Development, Supriyantoro, said in Jakarta in early March, on the sidelines of a workshop on International-Standard Hospital Accreditation, that in the health ministry`s strategic plan 2010-2014, one of the indicators that have to be met is at least
RSCM President Director Akmal Taher also confirmed that the state-owned general hospitals private services are targeting those seeking medical services abroad. The new units have inpatient VIP and Presidential Suite rooms, offer health service clusters, general medical checkups, in-vitro fertilization procedures, treatment of tumors, integrated breast clinic, aesthetic services, rehabilitation services, dental services, eye care center, and neuroscience services.
Health Minister Endang Rahayu Sedyaningsih. Maintaining medical records is a very important part of hospital services and one of the requirements to be internationally accredited.
five cities must have world-class hospitals. “Hopefully, two hospitals will be internationally accredited by JCI in late 2012 and five more hospitals in 2013,” he said. In the second phase, the government hopes that international accreditation will also be received by Kariadi Hospital in Semarang (Central Java), Hasan Sadikin Hospital in Bandung (West Java), Jantung Harapan Kita in Jakarta, Harapan Kita infant and maternal hospital in Jakarta, Persahabatan in Jakarta, and dr. Mohammad Hoesin in Palembang (South Sumatra). The Joint Commission International (JCI) will judge the hospitals based upon, among other criteria, patient-centered services, with the safety of patients being a main criteria in the judgment. “This accreditation will add ben-
Scientists Identify Protein Contributing to Symptoms of Parkinson’s Disease Scientists found that a protein called RGS4 is required for dopamine to regulate brain circuits during learning. But when dopamine levels drop dramatically, as in Parkinson`s, RGS4 becomes overactive and disrupts these circuits -- thereby leading to Parkinson`s symptoms.
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Scientists at the San Francisco-based Gladstone Institutes, an independent and nonprofit biomedicalresearch organization, have identified a protein that exacerbates symptoms of Parkinson`s disease. It is a discovery that could one day lead to new treatments for people who suffer from this devastating neurodegenerative illness. In a paper published online Wednesday in Neuron, Gladstone Investigator Anatol Kreitzer and Pand Lerner describe how a protein called RGS4 normally helps regulate the activity of neurons in the striatum -- the part of the brain that controls movement. But in experimental models of Parkinson`s disease, RGS4 does the opposite by actually contributing to problems with motor control. The result is a deterioration of movement and motor coordination, which are the hallmark symptoms of Parkinson`s. Scientists have long known that a drop in dopamine -- an important chemical in the brain -- is associated with Parkinson`s. And for decades patients have taken a drug called Levodopa to boost the brain`s dopamine levels. Unfortunately, Levodopa`s efficacy begins to fade as the disease progresses. So scientists have begun looking for other targets for which they can develop new therapeutic strategies. Kreitzer and Lerner found that RGS4 is required for dopamine to regulate brain circuits during learning. But when dopamine levels drop dramatically, as in Parkinson`s, RGS4 becomes overactive and disrupts these circuits -- thereby leading to Parkinson`s symptoms. Therefore, they tested whether removing RGS4
could prevent these symptoms. They treated mice lacking RGS4 with a chemical that lowers dopamine levels, mimicking the effects of Parkinson`s. They then monitored the mice`s motor skills -- including their ability to move freely in an open arena and traverse a balance beam -- and compared them to Parkinson`s mice in which RGS4 remained intact. As expected, Parkinson`s mice with RGS4 intact exhibited major problems with movement. They lacked coordination and often remained frozen in place for long periods of time. When attempting to cross the balance beam, many had repeated slips and falls, while others could not even attempt the task. But Parkinson`s mice without RGS4 performed fluid, coordinated movements with no major problems, even though they also had lower dopamine levels. The vast majority crossed the balance beam without any missteps. Many of the physical traces of Parkinson`s had disappeared. “We are optimistic that our work could pave the way for a much-needed alternative to Levodopa -- such as a drug that has the ability to inactivate RGS4 in Parkinson`s patients.”
efits to hospital services. The patient safety procedure will include more details, such as concerning hand washing. After receiving accreditation, even security personnel must know how to wash their hands properly,” he said. One of the challenges in implementing the international standard procedures is to change the mindset of hospital personnel, he said. In May 2010, Minister Sedyaningsih inaugurated a new building housing a world-class private
health service unit at the Cipto Mangunkusumo General Hospital (RSCM) complex, named the RSCM Kencana Integrated Service Unit. The newly integrated and improved medical service unit is expected to attract patients who have previously sought medical treatment abroad, she said. “According to Singapore`s National Health Group survey, around 50% of foreign patients seeking medical services in Singapore are Indonesians, or roughly 12,000 people annually,” the minister said.
“Services in all clusters are given in integrated ways by teams, and there is no departmental service,” he said. Also, several RSCM services, such as the Cardiology Unit, Perinatal Unit, and Radiotherapy Unit, have acquired ISO 9001 Certificates. Of note, President Susilo Bambang Yudhoyono expressed his concern in July 2011 about the flow of wealthy Indonesians who seek medical treatment overseas. He emphasized the importance of a partnership between the government, the private sector and universities to develop modern hospitals providing higher levels of medical care to stem the tide of rich Indonesians who seek medical services overseas. “If our people go abroad to seek medical help every chance they get, those countries will receive the bene-
fit, not us, but unfortunately we cannot stop them from doing so,” Yudhoyono said. “We should be able to provide hospitals with beautiful environments that will complement the capable doctors and high-tech medical equipment,” he said when speaking at the launch of the first private cancer hospital in Indonesia, the Mochtar Riady Comprehensive Cancer Center. Earlier in May, Yudhoyono also expressed his concern that many middle- and high-income Indonesians choose to go elsewhere in Southeast Asia for treatment. Indonesia needs more internationally accredited hospitals to stop the flow of patients to such countries as Singapore and Malaysia, he said, adding that he always receives medical services at local hospitals. “We need to boost the capacity of the country`s health care providers,” he said at a National Health Development seminar in Jakarta in May, hosted by the University of Indonesia`s School of Medicine. The government enacted Law No. 44 of 2009 on Hospitals in October 2009, noting that there was an increasing need for improved healthcare and medical services throughout the country, which includes servicing the growing population of approximately 237 million people, with a growth rate of approximately 1.12% per year.
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C8 March 12, 2012
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Photo Essay Museum Nasional, Historical or History?
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TEXT AND PHOTOS BY HANDHY REZANGKA
useum Nasional, or Museum Gajah as many Indonesians would like to call it because of the elephant statue in front of the building, is house to 1,400 pre-historic, archeological, overseas ceramics, numismatic/heraldic, colonial ethnographic and geographic items. The bronze elephant statue was a gift from Thai King Raja Chulalongkorn (Rama V) to President Soekarno. The museum is located a few meters away from the capital’s national monument Monas and is surrounded by historical buildings that now function as government offices. The museum building itself was established during the Dutch colonial era on 24 April 1778 for an institution that housed a group of Dutch intellectuals called Bataviaasch Genootschap van Kunsten en Wetenschappen. The institution was set up to promote arts and sciences studies and to publish their discoveries. To support the purpose, the Dutch government built a library to accommodate collections of books and cultural items that they received from various donators. When I visited the museum, there was a group of school children who received a grand tour from a guide who told them about history and the museum’s collections. I saw mixed reactions from their faces, from confusion to amazement to see so many items that they’ve probably never seen in their lives and not even in history books. Other visitors were foreigners who came individually without a guide. Once in a while they would stop to look closer at certain items or to read information about the items. As I walked out of the museum, I saw several workers painting the museum’s gate. But that’s not surprising as the building has been around for more than two centuries but is still standing nicely and strong.
I saw mixed reactions from their faces, from confusion to amazement to see so many items that they’ve probably never seen in their lives and not even in history books.