The President Post December 2013

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The Network Diplomacy Millennium – Page A2

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December 2013 Vol. 2 No. 12 www.thepresidentpost.com

SPECIAL REPORT

Pertamina, Chevron, Star Energy to Develop Geothermal Projects

Developing Tourism, Developing the Nation – Page C1

– Page B2

Mari Elka Pangestu Minister of Tourism and Creative Economy (Menparekraf)

RI Economic Growth 2013-2014 Designed to Slow Down bloomberg.com

JAKARTA (TPP) – Finance Minister Chatib Basri has said that Indonesia’s economic growth in 2013 and 2014 has beeen designed to slow down to overcome the deficit in state budget revenues and expenditure. One of the ways is by reducing imports of luxury goods consumption.

“T

he figure will be below 6%, between 5.5% to 6%, at the most 6.1% in 2014. Higher economic growth may be achieved in 2015 by the new government, “ he said at the Investor Summit and Capital Market Expo 2013 held on November 27-28 in Jakarta.

He added that Indonesia’s economic growth has been stable in the last five years at an average rate of 5.9%, ranked second after China with 7.8%.

He said Indonesia’s econom­ic fundamentals are strong, but the country is included in the ‘Fragile Five’ (together with India, Turkey, South Africa and Brazil) be­ cause of “perception”.

The tapering off by the U.S. on the monetary stimulus known as Quantitative Easing (QE) drove foreign investors to sell their stocks and has put pressure on developing countries, including Indonesia.

Indonesia’s current account

deficit is quite large at $8.4 billion in the third quarter of the year but is estimated to decline to $3.1.

According to Budi Hikmat, an economist at PT Bahana Securities, the deficit is mainly due to the increase of consumption of the middle-class whose number has increased significantly.

“For example, in property now people use lightweight steel roofs while domestic production is not sufficient. So it must be imported,” he said.

To reduce imports of consum­ er goods, the government has recently raised the tax on the sales of imported luxu­ry goods by 150%. Meanwhile, to encourage the improvement of domestic production, the government has launched a number of packages of fiscal incentives.

Until now, consumption is still the dominant element in supporting economic growth in Indonesia. Ideally, to sustain growth export-based investments should be the main pillar, said Ito Warsito, President

Various step have been taken to increase domestic investment, especially in the stock market, through education and socialization by ways of seminars, exhibitions and gallery investments in campuses; facilitating the engagement of individual investors with intensified online selling stock; simplification of trading rules such as the size of one lot, which will be reduced to 100 from 500.

Finance Minister Chatib Basri said that to reduce imports of consumer goods, the government in the near future will raise tax on imported luxury sales goods by 150%. Meanwhile, to encourage the improvement of domestic production, the government has launched a number of packages of fiscal incentives.

Director of Indonesia Stock Exchange.

“At this time, only a third of investment is accounted for the rate of economic growth.”

Various step have been tak-

en to increase domestic investment, especially in the stock market, through education and socialization by ways of seminars, exhibitions and gallery investments in campuses; facilitat-

ing the engagement of individual investors with intensified online selling stock; simplification of trading rules such as the size of one lot, which will be reduced to 100 from 500.

Tycoons, Experts Take on Revitalization of Kota Tua The renovation of Kota Tua is gaining momentum as Jakarta Governor Joko Widodo has issued an instruction to form a consortium to revitalize Jakarta’s historical district.

Setyono Djuandi Darmono, President Director of PT Jababeka, has invited national figures in the fields of business and culture to take part in the effort by forming PT Pembangunan Kota Tua Jakarta (PEMKOT).

Together with the experts on architecture and art history under the Jakarta Endowment for Art and Heritage (JEFAH), PT PEMKOT will has up three shortterm targets. First, to revitalize Fatahillah Square. Second, implement the re-usage of the Fatahillah Post Office –to serve as a visitor center—and the Jakarta Museum of Contemporary Art. Third, to hold Kota Tua Fiesta at the Fatahillah Square in the form of performing arts, culinary festivals and community gatherings.

The program is supported by PT Pos Indonesia as corporate sponsor.

In the Kota Tua area as many as 134 Dutch colonial buildings are found. Only five buildings are owned by the Jakarta Provincial Government, namely the Jakarta History Museum, Maritime Museum, Conservation Center, Puppet Museum and the Museum of Fine Arts and Ceramics.

To attract more tourists to Kota Tua, the area will also feature various facilities such as ho-

In the Kota Tua area as many as 134 Dutch colonial buildings are found. Only five buildings are owned by the Jakarta Provincial Government, namely the Jakarta History Museum, Maritime Museum, Conservation Center, Puppet Museum and the Museum of Fine Arts and Ceramics. tels, restaurants, and galleries.

Street vendors (PKL) and Small and Medium Enterprises (SMEs) will be given a place to develop their businesses.

JEFAH is chaired by Goenawan Mohamad, with Advisor on Institutional Relations Sofyan Djalil (Former Minister of SOEs), Advisor on Fine Arts and Museum Oei Hong Dijen, and Architecture and Heritage Advisor Han Awal as members. Meanwhile, President Director of PT

PEMKOT is Lin Che Wei, who is concurrently Director of JEFAH, and Teten Masduki (Indonesia Corruption Watch) as Deputy Director JEFAH. In the Board of Trustees (stockholders) are SD Darmono (Jababeka), Edwin Soeryadjaya (Saratoga), Hendro Gondokusumo (Intiland), Trihatma K. Haliman (Agung Podomoro), Harun Hajadi (Ciputra), Alexander Kusuma (Agung Sedayu), Boyke Gozali (Plaza Indonesia), Murda-

ya Poo (Central Cipta Murdaya Group) and others.

In the Board of Advisors of JEFAH representing the Jakarta government are Deputy Governor for Tourism and Culture Sylviana Murni, Head of Jakarta Disparbud Arie Budiman, and Deputy Governor of the Spatial Planning and Environment Sarwo Handayani.

SD Darmono said, “This group was formed to ease the burden of the government of Jakarta to

handle Kota Tua, which is complicated and time-consuming.”

He added that revitalization of Kota Tua is a joint effort and is supported by the private sector, State-Owned Enterprises (SOEs) and the Provincial Government of DKI Jakarta.

“In addition, in the future we also hope to form working groups involving stakeholders and community groups who care for Kota Tua,” said Darmono.

Regarding funding, Governor Joko Widodo separately said that the government will provide funds up to Rp 150 billion.

“The renovation of Kota Tua will be funded entirely by the city’s budget. Private and state-owned buildings will be repaired by separate budgets. And for this project Jakarta Provincial Government will spend approximately Rp 150 billion to revitalize Kota Tua as an exclusive region,” he said.

Meanwhile, President Director of PT PEMKOT Lin Che Wei said that each shareholder will spend $10 million on PT Pengembangan Kota Tua Jakarta. So far, at least ten entrepreneurs have signed up.

“The government budget will be channeled through local work units,” said Head of Tourism Arie Budiman.

Investment in the Stock Market

All this time, investment in the stock market is known to be ‘high risk, high return’.

“High risk is basically caused by ignorance of investors concerned, “ said Lo Kheng Ho, an individual investor who has been on the trading floor for 24 years and now has assets worth trillions of rupiah, making him the largest individual investor today.

“There is no investment instru­ment that can match returns provided by stocks. For example, I bought Charoen Pokphand’s stock at Rp400 per sheet in 2002. Now the price is Rp5.200. Due to the stock split several times before, the total stock value becomes 6000 times higher than the original one.

Which investment instru­ment can give such big benefits? We seem to have a moneymak­ing machine,” he said.

Key success in investing in the stock market, according to Kheng Ho, is “do not buy a cat in a sack. Learn about the company’s stocks by reading the news, financial reports and prospectuses. Then look for stocks that are cheap but from good companies.”

In addition to that, Giring Ganesha (a member of the band Nidji) said, also look at the management of the company concerned.

“If the people are qualified, most likely the company will grow well.”

If Kheng Ho focuses in investing on the trading floor, Giring prefers to diversify by investing not only in shares but also in mutual funds, gold and property. The habit of investing is supposed to be a lifestyle of Indonesians today, he said.

“This makes future more secure and our lives will be happier.”

Quotes and Thoughts Mochtar Riady, Founder of Lippo Group

“A tree planted in pots or in houses will never grow higher, but it would be otherwise if they are planted in large areas.”

Liem Sioe Liong, Founder of Salim Group

“If you only listen to what people say, you will go crazy. You have to do what you believe in.”

Bradley Sugars, Founder ActionCoach

“As an entrepreneur, it is dangerous when you make decisions based solely on perspectives.”

A2

December 2013 Vol. 2 No. 12

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Opinion

The Network Diplomacy Millennium The information revolution and emergence of new Internet technologies has changed both public and official diplomacy, which at present is conducted through mobile phones, e-mails and social networks in addition to traditional telephones and teletypes. However, the WikiLeaks incident as well as NSA former contractor Edward Snowden’s revelations about methods of American intelligence-gathering operations, indicate that the problem of information security remains prominent. change of data by both satellite and fiber optic cables.

By Hendra Manurung

O

n August 30, 1963, the Moscow-Washington hotline became operational as a response to the October 1962 Cuban missile crisis. Its primary purpose was to prevent a nuclear conflict that could result from a misunderstanding between the Soviet Union and the United States. It also offered a fast, secure channel of communication in case of other emergencies.

The first hotline used teletype and encryption and wasn’t actually a telephone at that time, but it was considered revolutionary and more reliable and less prone to interception than a regular transatlantic phone call.

The connection established in 1963 was for written communications only. A voice component was added decades later as the system evolved from an undersea telegraph cable to today’s ex-

By 1990, U.S. presidents had used the text-only hotline more than fifteen times. President Lyndon B. Johnson notably used it during the six-day Arab-Israeli war in 1967 in order to prevent internationalization and escalation of the conflict.

Then-U.S. President Ronald Reagan and his Soviet counterpart Mikhail Gorbachev were the last leaders who exchanged messages via the hotline. In 1991, the Kremlin and the White House established a direct telephone line, which was often used

by George H.W. Bush and Boris Yeltsin. Since then, telephone calls have replaced written messages as the preferred mode of communication between the nations’ leaders. The line proved helpful in the improvement of bilateral relations. Vladimir Putin’s call to Bush after the events of September 11, 2001 became famous as a step towards coop-

eration and trust. Today, U.S. and Russian leaders prefer to communicate by telephone.

In 2008, an e-mail line was also established. It uses a dedicated and encrypted computer line, based on modern technologies such as satellite and fiber optic cable. This line provides chat facilities for coordination among users as well as e-mail for text messages. There’s no information whether this e-mail connection among leaders has ever been used, and according to the media, the telephone line seems to be much more convenient and frequently used.

U.S. and Russian leaders continue to make telephone calls in extraordinary situations when they arise, while foreign ministries are responsible for the routine process of dialogue between countries. Typically, the hotline is necessary in cases that require personal communication, such as in the aftermath of large-scale terrorist attacks and tragedies, when the leaders are committed to personally express condolences. For example, Putin and his American counterpart Barack Obama spoke on the telephone after the terrorist attacks in Boston.

Hotlines also exist among major nuclear powers, such as the U.S. and China, the U.S. and UK, China and France, India and Pakistan, etc. Originally, hotlines were intended for the exchange of information and

consultations in case of crisis.

The Moscow-Washington hotline is a classic example of Cold War diplomacy, and its purpose was to provide a channel of communication for the leaders of states locked in conflict, mistrusting each other and with only limited interaction. But since then, the diplomatic practice has changed.

ingly proposed that he and thenRussian President Dmitry Medvedev abandon the hotline in favor of communication by Twitter.

hotline is still operational. Its advantages include safety and reliability, as well as the possibility of written communication, which is particularly important in times of crisis, when stakes are high and every word needs to be chosen with care.

Most of the operating hotlines exist among major nuclear powers because they provide a direct and secure communication channel in relations where every mistake or delay could be fatal.

However, with technical progress new options for the use of hotlines appear. The U.S. and Russia plan to establish a direct link in order to prevent a potential conflict in cyber space. On the one hand, this indicates the importance of securing cyberspace and resolving the information security problem. On the other hand, it emphasizes the importance of direct communication between the states and the creation of special and secure channels.

So, in the dynamic, complex and highly interconnected international political system of today, hotlines remain an effective diplomatic instrument. In many ways, they complement the possibilities offered by Internet diplomacy. Moreover, new problems that gain prominence on the international agenda of Asia Pacific, such as information security, require hotlines and direct communication links of their own in order to stabilize interstate relations.

The information revolution and emergence of new Internet technologies has changed both public and official diplomacy, which at present is conducted through mobile phones, e-mails and social networks in addition to traditional telephones and teletypes. However, the WikiLeaks incident as well as NSA former contractor Edward Snowden’s revelations about methods of American intelligence-gathering operations, indicate that the problem of information security remains prominent. E-mails and telephone calls can be intercepted, resulting in reputational as well as strategic costs. Thus, in the era of wide information access through the Internet, a way to conduct secure diplomacy is still relevant.

The reliability of communication channels is especially important if national and international security issues are discussed.

That’s why most of the “hotlines” established back in the Cold War are still in use. Moreover, in 2011 the United States offered to host such a hotline with Iran in order to stabilize the relationship between the states and prevent the escalation of conflict in the Middle East.

With the end of Cold War at the end of the twentieth century and the increased interdependence of states, the diplomatic practice has changed, reflecting the transformation of contemporary international politics. International relations in the twentyfirst century are multilevel and multifaceted, the number of international actors has increased and new channels for communication have appeared. Such forums as the G8, G20, BRICS, and APEC provide an opportunity for leaders to discuss bilateral and global problems face-to-face.

The new term “networked diplomacy” was included in the official Concept of the Foreign Policy of Russia for such high-level diplomacy.

Moreover, public diplomacy, aimed at citizens of other states, has emerged as an effective practice. Presently, diplomats and even heads of states use social networks and the Internet in order to communicate with the wider public. This practice is called ‘e-diplomacy’ or ‘digital diplomacy’. In 2010 Obama jok-

The

Moscow–Washington

in the dynamic, complex and highly interconnected international political system of today, hotlines remain an effective diplomatic instrument. In many ways, they complement the possibilities offered

by Internet diplomacy.

Moreover, new problems that gain prominence on the international agenda of Asia Pacific, such as information security, require hotlines and direct communication links of their own in order to stabilize interstate relations.

Hendra Manurung is currently is Permanent Lecturer of International Relations at Faculty of Business and International Relations, President University, City of Jababeka, Cikarang, West Java, Indonesia. He graduated from Sankt Petersburg State University, the Russian Federation.

RI and Strategic Partnership Challenges in Africa The new strategic partnership with Africa offers many challenges and opportunities.

Globalization has provided alternative options in developing the relations level and intensity between Indonesia and Africa. However, to optimize the new strategy options, a high political commitment is needed.

By Prof. Anak Agung Banyu Perwita, PhD

T

he values in the Dasasila Bandung, which were the strategic output from the 1955 AsiaAfrica Conference, still have important meaning and are still contextual in the current regional and global interactions. These values became the foundation of cooperation between Asian and African nations in their fight against neo-colonialism in the political, economic and socialculture sectors. Ties with African nations are deemed a high priority as evident with President Susilo Bambang Yud-hoyono’s recent visit to Africa.

In the ever changing dynamics of international relations, Asian-African nations are faced

with three major challenges: economic development, security and global peace, and global political restructuring.

In the efforts to enhance economic and trade interactions between Asian and African countries, especially with Indo¬nesia, there are at least two agenda that need to be addressed.

First, Asian-African nations have to strengthen their information networks on trade and investment in order to understand the market dimensions of both continents more comprehensively. Indonesia also needs to strengthen its information network to improve its competitiveness among several neighboring countries that are aiming to expand their markets in Africa.

Secondly, institutional regu-

lations between both continents should also be improved in order to strengthen strategic dialogs between Asian and African nations to build a new awareness about business opportunities for Asian-African entrepreneurs.

High economic cost, limited infrastructure and insufficient number of trained human resources and the complicated legal system in many African countries will become the main obstacles in enhancing trade and investment volumes between Indonesia and several big African countries.

consensus to reach a common stance. In many cases, NAM has proven to be “a house divided” when handling matters related to multilateralism, including the UN. Given the developments mentioned above, the chance to build a new Asia-Africa strategic partnership is still open wide. However, the increase of level and interaction intensity will not only rely on the traditional “G to G” relations but it will also involve “G to Business”, “B to B” and even “People to People” relations.

The globalization phenomenon with its multidimensional element needs to function as the motor to create a more systematic intersociety interaction that offers mutually beneficial interactions between Indonesia and Africa. The interactions between the Asian society, including In-

In the political sector, the demand to reform the United Nations’ Security Council, especially from the Non-Aligned Movement (NAM) nations, will depend on the willingness of developing countries to reach a

donesians and Africans were relatively still limited.

That’s why the need to enhance and improve dialogs among groups in various formal and informal meetings must also involve various community groups, including academicians both in Asia and Africa. Such dialogs could lead to the establishment of some kind of center for African studies in various universities across the country.

In other words, community groups in Asia and Africa and non-governmental organizations in their respective communities have to play a role as “agenda initiators” and as “agenda con¬trollers” to boost interactions among them while at the same time complement the official interactions in the government level.

The new strategic partnership with Africa offers many challenges and opportunities. Globalization has provided alternative options in developing the relations level and intensity between Indonesia and Africa. However, to optimize the new strategy options, a high political commitment is needed.

Indonesia is expected to make this as one of its foreign policy priorities in order to enhance interactions with African nations so that the new strategic partnership can be implemented realistically to promote economic, social and political developments in the new international relations era.

The writer is head of the International Relations Studies program, President University, Jababeka, Cikarang.

ENGLISH EDITION

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December 2013 Vol. 2 No. 12

A3

International ASEAN, EU Meet for Maritime Cooperation Dialogue deplu.go.id

The dialog was held with the purpose of giving opportunities to related stakeholders to exchange views to strengthen maritime cooperation between ASEAN and the EU.

Maritime issues were always critical and had many challenges which were necessary to handle through regional cooperations. The EU involvement was further seen as inspiration not role model to ASEAN. The forum could create holisticintegrative-comprehensive perspectives and contribute to the solutions which were beneficial to all parties.

Maritime cooperation issues included many traditional and non-traditional issues, among others were illegal fishing; sea security; navigation security; piracy and robbery at sea; efforts of maintaining sea environment, conservation of sea biodiversity sources, sea tourism, and maritime connectivity.

“A

s an archipelago country, Indonesia has huge interest in strengthening maritime cooperation especially to handle illegal fishing issues (IUU Fishing) and maritime connectivity development nationwide or in ASEAN”. This was confirmed by Jose Tavares, the Director of ASEAN PoliticsSecurity, Directorate General of ASEAN Cooperation (KSA), the Indonesian Ministry of Foreign Affairs, in the opening ceremony of ASEAN-European Union (EU) Summit Dialog on Maritime Cooperation in Jakarta (18/11).

According to him, further handling on both issues could make use of the existing regional mechanisms, including ASEANEuropean Union cooperations.

Also giving opening speeches were Le Luong Minh, ASEAN Secretary General, and Ugo Astuto, Director of South and Southeast Asia, European Union External Action Service (EEAS).

Also present was Olof Skoog, Head of EU Delegation to Indonesia, Brunei Darussalam, and ASEAN. The dialog was held in cooperation between Directorate General of KSA, the Indonesian Ministry of Foreign Affairs and EEAS as well as Regional EU-ASEAN Dialogue Instrument (READI), which was held by the Habibie Center.

The dialog was held in cooperation between Directorate General of KSA, the Indonesian Ministry of Foreign Affairs and EEAS as well as Regional EU-ASEAN Dialogue Instrument (READI), which was held by the Habibie Center.

The dialog was held with the purpose of giving opportunities to related stakeholders to exchange views to strengthen maritime cooperation between ASEAN and the EU. The dialog participants were government officials, academicians and researchers from the think-tank institutions of Indonesia and all other ASEAN countries, as well as the EU. M.I. Derry Aman, Acting Director of Speaking Partner and Inter Region, Directorate General of KSA, the Indonesian Ministry of Foreign Affairs, especially pointed out the importance of following up the results and recommendations of the dialog in order to get acknowledgement and approval either in Senior Official Meeting (SOM) or ASEAN and the EU Foreign Ministers.

Hence, the discussion results might be used as official reference and benefited as advancing maritime cooperation of the two parties in the field of maritime cooperation.

As part of the Dialog, a Public Forum was also held in Jakarta on 19 November 2013. This Public Forum took the theme of “Towards an Integrated Maritime Cooperation: Exchange of Lessons and Experiences between ASEAN and the EU”. This Public Forum was an open discussion forum which involved stakeholders and society as well as the media.

In the Public Forum, Ambassador Agus Sriyono, Deputy in the Coordination of Foreign Politics, the Indonesian Coordinating Ministry of Politics Human Rights and Security, gave the remarks which basically pointed out the need of implementing

concrete maritime cooperation between ASEAN and the EU. This was as mentioned in Bandar Seri Begawan Plan of Action to Strengthen the ASEAN-EU Enhanced Partnership 2013-2017 where both parties were expected to be able to share knowledge and experiences.

Dewi Fortuna Anwar, the Deputy Secretary of Vice President in Politics, the Secretariate of Indonesian Vice President, who is also chairman of the Institute of Democracy and Human Rights, the Habibie Center, said that maritime issues had two important aspects, source of income as well as source of conflicts.

Indonesia, Poland Sign Cooperation in Environmental Field

standing is expected to be the basis to strengthen cooperation between the two countries in terms of environmental protection and improvement, particularly in terms of climate change, environmental technologies, sustainable environmental development, as well as the protection of the ozone layer.

Based on Indonesian Embassy’s notes, Indonesia-Iran trade value grew significantly in the last five years.

However, 2012 saw a decrease caused by a wrong mindset and excessive concern from the stakeholders in Indonesia following the unilateral sanction on Iran. nesian Chamber of Commerce, and the Indonesian Joint Business Council to the Chamber of Commerce of both nations.”

In addition, the Indonesian Embassy also managed to facilitate the visit of hundreds of Iranian business people to Indonesia, primarily to the Trade Expo Indonesia (TEI) 2013 event, and the biggest foreign trade mission visit in the history of the Chamber of Commerce, which was to Iran.

During dinner with the Indonesian Embassy’s “Big Family” at Wisma Duta, Indonesian Ambassador to Iran Dian W. said that each trade negotiation will bring actual benefit to stakeholders in Indonesia, and not just to fulfill a political commitment.

“So that our efforts to cash-in on good sustainable diplomatic relations can also be enjoyed by the people in the homeland,” said Ambassador Dian.

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According to Indonesian Ambassador to Poland Darmansjah Djumala, the MoU is the basis for the development of IndonesiaPoland cooperation in the field of the environment and as a followup and results of the Indonesian president’s visit to Poland in early September this year.

“The two countries agreed to implement the MoU in the form of cooperation in the field of waste management and water treatment in the various regions and provinces in Indonesia,” he said in a release to the Foreign Affairs Ministry’s portal.

The signing of the MoU in the field of environment, said Ambassador Djumala, was timely because in recent years there have been a number of Indonesian and Polish companies signing cooperation agreement in the field of green technology, such as wind turbines, biomass production, and waste management plant. kemlu.go.id

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Minister of Environment Balthasar Kambuaya and the Minister of Environment of Poland, Marcin Korolec, signed an MoU on cooperation in the environmental field (20/11). The MoU was signed by both parties on the sidelines of the 19th COP held in Warsaw, Poland.

The Memorandum of Under-

Darmansjah Djumala Indonesian Ambassador to Poland

Indonesia and Iran once again sat at the negotiating table to continue discussions on efforts to increase market and trade access. The discussions were made in Ahad (11/17), at the Iranian Central Office Trade Organization.

“This meeting is very important with the aim to consolidate perception and form a common ground for the next negotiation stage,” said a release by the Tehran Indonesian Embassy to the Foreign Affairs Ministry’s website.

This meeting is also important for showing goodwill of both parties in efforts to advance bilateral cooperation in the sector of trade, after this meeting had been postponed several times since 2010.

In this meeting, the Indonesian Delegation was led by Syamsul Bahri, Director of Bilateral Cooperation of the Indonesian Ministry of Trade, comprising representatives of the Ministry of Trade, Ministry of Industry, and the Tehran Indonesian Embassy.

Based on Indonesian Embassy’s notes, Indonesia-Iran trade value grew significantly in the last five years. However, 2012 saw a decrease caused by a wrong mindset and excessive concern from the stakeholders in Indonesia following the unilateral sanction on Iran.

Recorded in 2012, besides the decrease in value, bilateral trade surplus was on Iran’s side.

“The Tehran Indonesian Embassy, in line with its function, will continue to advance bilateral cooperation for national interest. In 2013, the Indonesian Embassy succeeded in pushing for the founding of the Iran Permanent Committee to the Indo-

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According to Indonesian Ambassador to Poland Darmansjah Djumala, the MoU is the basis for the development of IndonesiaPoland cooperation in the field of the environment and as a follow-up and results of the Indonesian president’s visit to Poland in early September this year.

Other important issues were efforts of overcoming border bilateral or regional disputes, including peacesettlement efforts in relation to South China Sea. The participants of the Dialog and Public Forum thought that the efforts of strengthening maritime cooperation should be carried out by realizing the nature of maritime issues which were complex and crosscutting involving many other areas.

“Therefore, the handling shall and need to be conducted through more holistic and comprehensive approaches by involving the related stakeholders”.

Indonesia, Iran to Increase Market and Trade Access

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The MoU was signed by both parties on the sidelines of the 19th COP held in Warsaw, Poland.

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December 2013 Vol. 2 No. 12

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ASEAN Review

Asean Position In The Global Economy With all its many shortcomings, ASEAN has slowly but surely become a regional grouping of 10 nations with a sizeable aggregate economic size. ASEAN has developed to become the 5th largest economy in the global economy. After the European Union, USA, China and Japan.

By Atmono Suryo

I

t will be recalled that ASEAN was established some 46 years ago on 8 August 1967 by Indonesia, Malaysia, Thailand, the Philippines and Singapore.

Since then ASEAN’s membership has expanded to include Brunei, Cambodia, Laos, Vietnam and Myanmar. It has now become the well-known ASEAN 10.

With all its many shortcomings, ASEAN has slowly but surely become a regional grouping of 10 nations with a sizeable aggregate economic size. The following comparative GDP data shows that ASEAN has developed to become the 5th largest economy in the global economy.

After the European Union, USA, China and Japan.

No.

Country

GDP ($ billion)

1 European Union 27

17,578

2 USA

15,094

3 China

7,298

4 Japan

5,869

5 ASEAN

2,178

6 Russia

1,850

7 Canada

1,737

8 India

1,676

9 Australia-New Zealand

1,650

10 South Korea Source: ASEAN Sec, IMF

1,116

With a total population ASEAN is among the largest and attractive market in the region, after China and India. It has a very fast increasing middle class with rather high purchasing power.

In addition ASEAN has a huge, but still less-developed group of SME’s (small & medium enterprises).

While in terms of economic growth, until 2011 ASEAN has been rated to be among the fastest in the world with an average growth of more than 5%.

ASEAN economic development has thus far shown an upward trend, particularly in the areas of GDP growth, GDP per capita and increased trade. Current account balance and inflation has been under control.

ASEAN is strategically located in East Asia which is becoming the center of gravity of the global.

ASEAN Trade

Since the year 2000 ASEAN trade statistics shows that the trade performance has been quite remarkable. Total trade was only $576 million in 2000 but went up immensely to $2.3 trillion in 2011 and went slightly up to $2.4 trillion in 2012. The 2013 figure is expected to be lower because of the uncertain developments in the global economy affecting most countries in the world.

The main trade partners in 2011 are: Intra-ASEAN 25%; China 12%; Japan 11%; EU-27

ASEAN Trade, 2011 - 2012 (as of July 2013) value in US$ million; change in percent Country Brunei Darussalam

2011 Exports 12,362.3

Imports 2,460.0

2012 Total trade 14,822.3

Exports 13,182.2

Imports

Year-on-year change Total Trade

Exports

16,856.3

6.6

49.4

13.7

3,674.1

Imports

6,710.6

6,133.6

12,844.1

7,434.9

11,228.8

18,663.7

10.8

83.1

45.3

Indonesia

203,496.7

177,453.6

380,923.3

190,031.8

191,689.5

381,721.3

(6.6)

8.0

0.2

Lao PDR

1,746.5

2,209.4

3,955.9

2,655.2

3,503.5

6,158.8

52.0

58.6

55.7

Malaysia

226,179.1

187,542.8

415,721.9

227,387.3

196,615.5

424,002.8

(0.3)

4.8

2.0

Myanmar

8,119.2

6,805.9

14,925.1

7,509.8

6,525.9

14,035.7

(7.5)

(4.1)

(6.0)

48,042.2

63,709.4

111,751.6

51,995.2

65,386.4

117,381.6

8.2

2.6

5.0

Singapore

409,443.5

365,709.1

775,152.6

409,772.1

380,986.8

790,758.9

0.1

4.2

2.0

Thailand

228,820.7

230,083.6

458,904.4

229,524.2

247,777.7

477,301.9

0.3

7.7

4.0

Vietnam

95,365.6

104,216.5

199,582.1

114,510.7

113,282.5

227,703.3

20.1

8.7

14.1

1,242,266.4 1,146,305.9 2,388,592.3 1,254,003.6 1,220,670.7 2,474,674.3

0.9

6.5

3.6

ASEAN

Source: ASEAN MerchandiseTrade Statistics Database (compiled/computed from data submission, publication and/or websites of ASEAN Member States’ national, ASEAN Free Trade Area (AFTA) units, national statistics offices, customs departments/agencies, or central banks)

The cumulative FDI net inflow to ASEAN 2006 - 2011 Notes: 2011 data are preliminary figures and exclude Myanmar’s data and Singapore’s data on inter-company loan for 2011 with intra/extraASEAN breakdown shown are estimated by the ASEAN Secretariat since the data are presently not available.

Source: ASEAN FDI Database

by major source country

Indonesia 13.1%

ASEAN 16.5% USA 9%

Japan 12%

China 4%

The top 10 ASEAN exports by products show that electronics, electrical machinery contributes the largest share, followed by mineral fuels and oils and also machinery, applianc-

Lao PDR 0.4% Malaysia 9.9% Myanmar 0.8%

Others 39%

10%; USA 8%; and ROK (South Korea 5%). The Intra-ASEAN trade figure is considered too small; it is important to boost up Intra-ASEAN trade. Especially for countries like Indonesia which is one of the smallest contributor of intra-regional trade.

Exports

by receiving country

EU 19.5%

Philippines 2.6% Singapore 50.9% Thailand 11.3% Vietnam 9.3% Brunei Darussalam 0.7% Cambodia 1.0%

es and nuclear reactors. It is not clear why they are included and which countries are the exporting countries. Rubber & appliances are among the 10 largest export products.

FDI (foreign direct investment)

In addition to trade foreign direct investment (FDI) is of crucial importance to ASEAN. The cumulative FDI net inflow to ASEAN, during the period 20062011 is as follows: Until 2011 the major FDI source countries are: EU, ASE-

Electronics, electrical machinery (20.2%) Mineral fuels, oils (18.4%)

Total Trade

Cambodia

The Philippines

Top 10 ASEAN exports by products (2011)

AN, Japan, USA and China, while the main receiving countries are Singapore, Indonesia, Thailand and Malaysia

ASEAN Economic Community

A strategic step was taken

by ASEAN with its decision to move towards regional integration and in particular to establish the ASEAN Community by 2015, underpinned by three pillars: the ASEAN Political-Security Community, the ASEAN Economic Community (AEC) and the ASEAN Socio-Cultural Com-

Nuclear reactors, machinery & appliances (10.9%) Rubber & articles (4.2%) Business services & misc. repairs (4.1%) Animal/vegetable oils & products (3.8%) Plastics & articles (3.0%) Organic chemicals (3.0%) Vehicles & parts (2.5%) Source: ASEAN Stats, ASEAN Secretariat

munity. Basically ASEAN aims to provide peace, security, economic growth and social progress for its member countries.

The ASEAN Economic Community aims to establish the following goals: a) a single market and production base b) a highly competitive economic region c) a region of equitable economic development d) a region fully integrated into the global economy ASEAN single market concept includes the Free flow of goods – services – investment and skilled labor. The question is whether the single market and the free flow concepts will also be able to increase sufficiently intra-ASEAN trade and investment and strengthen ASEAN’s collective and integrated economy in facing the challenges of the global economy.

Tasks ahead

• ASEAN has achieved consid-

Precious stones, jewelery (2.1%)

erable progress. But it is realized that the tasks ahead in the area of regional economic development are still enormous. They are manifold and in a way very complex; • The immediate task for ASEAN, however, is to beef up its efforts to establish the ASEAN Community by 2015; • The ASEAN community, (including the political community, which is not eager to promote economic integration) must be fully aware that ASEAN will be facing a very competitive external economy in the Asia-Pacific region and in the global economy; • Through closer cooperation and economic integration ASEAN has the potentials to become another powerhouse in the Asia-Pacific region. And to play an increasingly active role in the global economy.

The writer is former ambassador to the EU.

www.thepresidentpost.com

December 2013 Vol. 2 No. 12

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Law & Regulation

The Use of Stamp Duty in Documents Not all documents need a stamp duty stamp and please bear in mind that there is no requirement to have a stamp duty on a letter of agreement in order to make it lawful.

By Paulus Khierawan

The use of stamp duty is regulated under Law No.13/1985. The regulation stated that the customs imposed on the stamp duty is treated as tax for the document. Article 1 clause 2 of Law No.13/1985 stated that a document is a paper that contains a writing that has a meaning or intention of an action, or that explained a situation or reality of an individual and/or parties concerned.

A

lmost every individual has used a stamp duty stamp on letters or documents that contain sales-purchase agreements, leasing agreements, contracts of work and others. Many consider that an agreement without a duty stamp is invalid and thus take the trouble to renew their agreement with a stamp duty.

But is an agreement without a stamp duty really invalid?

The validity of an agreement has been stipulated under Civil Code (KUHPdt) Article 1320 KUHPdt, which requires one to meet these four conditions: • That they made a binding agreement; • They have competence to make an agreement; • It contains a certain issue; and • There is cause that makes it valid.

It is clearly stated that an agreement that had met the requirements under article 1320 of KUHPdt is valid even with the absence of a stamp duty. The next question is, is it necessary to have duty stamps on documents?

The use of stamp duty is regulated under Law No.13/1985.

The regulation stated that the customs imposed on the stamp duty is treated as tax for the document. Article 1 clause 2 of Law No.13/1985 stated that a document is a paper that contains a writing that has a meaning or intention of an action, or that explained a situation or reality of an individual and/or parties concerned. Article 2(2) explained the types of documents that need to use stamp duty:

Many consider that an agreement without a duty stamp is invalid and thus take the trouble to renew their agreement with a stamp duty. a. A letter of agreement and other letters that were needed as evidence of an action, reality or situation; b. Documents from notary public, including the copies; c. Documents made by an official who had been given the authority to issue land certificates (Pejabat Pembuat Akta Tanah) including the copies; d. A letter that involved money worth more than Rp1,000,000,- (one million): • Which stated that the money had been received;

• Which stated a financial statement or saving in a bank account; • Which contains information of a savings balance in a bank; • Which contains a confession about a total amount of debts or that some of them had been repaid or were being calculated; e. Valuable notes such as promissory notes and checks with nominal worth more than Rp1,000,000,- (one million rupiah);

f. Securities under whatever name or form if the nominal is worth more than Rp1,000,000,- (one million rupiah).

Aside from regulating the types of documents that need to have a stamp duty, it also regulated documents that didn’t need a stamp duty related to internal corporate transactions, related to tax payment and state documents such as: • A document that serves as evidence on the storage of goods,

• •

• •

evidence on the delivery of goods for sale that were paid by the sender and other letters.

Any form of certificate.

Salary receipt, waiting fee, pension fund, allowance and other payments related to works and letters that were submitted to get the payment.

Receipt related to the state money, regional money and from banks.

Receipt on any tax and other state, regional and bank income.

• Receipts issued for internal organization needs.

• Documents about savings, payment by a bank, cooperatives and other bodies in the related sector to the bank account holder.

• A pawn letter issued by the state-owned pawnshop company Perum Pegadaian.

As such it is clear that not all documents need a stamp duty stamp and please bear in mind that there is no requirement to have a stamp duty on a letter of agreement in order to make it lawful.

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December 2013 Vol. 2 No. 12

www.thepresidentpost.com

Property

Property as a Favorite Investment in 2013 www.atlant-invest.ru

The constant increase of Indonesia’s property value in line with regional economic growth showed that property investment in Indonesia is one of investors’ favorites, for both local and foreign investors, aside from capital market investments.

By Andri Marsetianto

O

ur national media often run advertisements on property in Australia, Singapore, Malaysia, New Zealand and others.

This shows that Indonesian investors are highly potential targets in line with the growth of our middle-income class that have reached 50–60 million people. We are given property investment options in our neighboring countries, but this can also be seen as an indicator that property markets in those countries are stagnant. On the other hand, property investment options (in Jabodetabek) no longer offer plots of land but rather residences, apartments, and commercial spaces with all their supporting facilities The good news is that some of our major property developers such as Bumi Serpong Damai, Agung Podomoro, Lippo Karawaci and Alam Sutera managed to post corporate earning growths of more than 50% on average and net profit growth of more than 100% in the first quarter of 2013. The income growth was contributed by sales growth in the development of areas (houses, shop-houses, plots of land), increasing hotel occupancy rate, higher leasing price and occupancy of commercial properties and joint property development with foreign investors.

Such condition is also contributed by the stable macro-economic condition and a relatively stable benchmark banking rate at 5.75%.

The constant increase of Indonesia’s property value in line with regional economic growth showed that property investment in Indonesia is one of investors’ favorites, for both local and foreign investors, aside from capital market investments. Developers and schools overseas have expressed their readiness to build cooperation with Indonesian developers to develop property projects in potential areas. Toyota Group and Lippo Karawaci in Cikarang, Bekasi developed apartmentshouses, AEON-Bumi Serpong Damai (BSD) built a shopping center in BSD city, Tangerang and Lotte Group with Ciputra in Jakarta, furniture retailer (IKEA with Alam Sutera in Tangerang, premium houses

by BSD with Land at BSD city, Tangerang and an education park in Jababeka.

However, our property investors’ optimism will be loomed by inflation risks which will increase in line with the government’s plan to increase subsidized fuel price. The policy will bring impacts on the houseownership/apartment-ownership (KPR/KPA) loan rate and it will increase prices of staples and building materials. Property sales will be affected in the

short term to medium term and developers will anticipate subsidized fuel price adjustments.

Bank Indonesia will likely adjust the BI rate to curb inflation rate caused by the price increase and the public’s weaker purchasing power, especially ahead of Idul Fitri.

That’s why amid the optimism of foreign investors, developers and retailers about our country’s economic and property prospects we should have more confidence to start mapping several potential areas before the condition changes after the government adjusts the subsidized fuel prices in the near future. The value in property investment is not determined internationally as in the prices of other investment commodities (such as gold). The prices are local, based on property demand and offer in the areas and based on the property project development concept on whether it would develop a city or whether the orientation was merely as the main supporting facility.

“Know Your Value, Know Your Property”

Amid the optimism of foreign investors, developers and retailers about our country’s economic and property prospects we should have more confidence to start mapping several potential areas before the condition changes after the government adjusts the subsidized fuel prices in the near future.

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December 2013 Vol. 2 No. 12

A7

Infrastructure

Oil and Gas Infrastructure: Master Plan Prepared donggisenorolng.co.id

The government is preparing a master plan for the development of oil and gas infrastructure to link the producing regions with consumers that are spread throughout Indonesia.

I

GN Wiraatmaja, Expert Staff to the Minister of Energy and Mineral Resources on Institutional Relations and Strategic Planning, said the issue of infrastructure is a very serious matter for connecting producers and consumers of gas. All this time, the oil and gas infrastructure is still inadequate and it often becomes an obstacle to the optimisation of the use of gas.

“Our effort is to map the problems, then make a development

Donggi Senoro, with a total investment of $1.7 billion, is targeted to operate in 2015.

master plan. So we will create a master plan that is integrated from the upstream sector, infrastructure, and demand,” he said.

Wiraatmaja said that currently the proven reserve of natural gas is mostly located in the region of Eastern Indonesia and the deep sea, whereas the biggest number of consumers is in Western Indonesia. This requires infrastructure capable of linking the two regions.

The government itself has five oil and gas projects with great potential, and these have become the government’s foothold to meet domestic demand; these include the East Natuna Block, which has gas reserves of up to 46 trillion cubic feet (TCF) with an estimated total investment of US$ 41 billion, and which will start producing after being developed for 10 years.

Then, there is Donggi Senoro, with a total investment of $1.7 billion, which is targeted to operate in 2015. Next is Tangguh Train 3, with an investment amounting to $ 12 billion and a target production in 2018.

Subsequently, there is Masela project with total reserves of 9.18 TCF and total investment of

$ 4.99 billion and a production target from the second quarter of 2018. The last one is the Cepu project with its 609 million barrels of reserves, and an estimated investment of $ 6.6 billion, as well as production target in 2014 and capacity of 165 million barrels per day.

Currently, the government is also encouraging the development of a gas pipeline that is integrated from the West of Sumatera to the East of Java. In addition, the government also continues to encourage the development of gas infrastructure in order to get it completed on time, such as the revitalisation of Arun LNG, construction of Arun - Belawan pipeline and development of Lampung FSRU.

Ministry of Finance to Establish PPP Center Ministry of Finance will realise the formation of PPP Center in 2015, which will be in charge of determining financial support for public private partnership projects.

Special Caretaker of Director General of Debt Management of the Ministry of Finance (Kemenkeu), Robert Pakpahan, said that the public private partnership (PPP) Center will assist with the preparations of projects, deter-

mine the forms of financial support, as well as evaluate progress of the projects in question.

The financial support being referred is provided via PT Penjaminan Infrastruktur Indonesia (Infrastructure Guarantee Fund/IIGF) or through viability gap funding (VGF).

All this time, determination of financial support for public-private partnership (PPP) projects

has taken more than one year because of the length of licensing process that must be passed to obtain funding approval from the Finance Ministry.

“Its preparations can take up to one year, even more if calculated with the tender,” he said on the sidelines of the launch of the PPP Book 2013.

He explained that the purpose of the PPP Center is to ascertain and evaluate, as well as to make

a decision or recommendation for a project. “Of course all this is done in collaboration with Bappenas, Coordinating Ministry for Economic Affairs (Kemenko Perekonomian) and other ministries/agencies,” he said.

Ministry of Finance has established a PPP (KPS) assessment centre, but it has not been focused enough because [the task] does not fall into the main duties

under the Fiscal Policy Office. In due course the PPP Center will be under Directorate General of Debt Management.

Realisation of PPP projects faces several challenges in the next year, including the increase in BI Rate to 7.5 percent, which can put the brakes on construction loans.

Previously, Forum of AsiaPacific Economic Cooperation (APEC) during APEC summit in

2013 agreed to set up a PPP Center in Indonesia to identify bankable PPP project plans and to resolve problems through project-based domestic coordination.

In the same place, Bastary Panji Indra, Director of Public Private Partnership Development of the Ministry of National Development Planning/ Bappenas, said that establishment of

the PPP Center is quite a pressing issue in relation to the implementation of infrastructure projects through the PPP mechanism.

“The target is for the PPP Center to have been established by the end of next year and the Committee for the Acceleration of Priority Infrastructure Development (KPPIP), which exists today, will be the embryo of the PPP Center,” he explained.

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December 2013 Vol. 2 No. 12

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Education PRECEDENT 2013:

Nationalism Spirit in Preserving Indonesian Culture TPP/Yudis

For the second time President University held “PRECEDENT”, an English competition for senior high school students at 16th to 17th November 2013 in the Ballroom President, Cikarang. The event was organized by PACT (President of the Association of Critical Thinkers), an English club at President University in collaboration with Marketing President University.

T

he event was held in order to commemorate World Heritage Day with the theme “Nationalism Spirit in Preserving Indonesian Culture”. It offers a total prize of up to Rp 4 billion, including scholarship category 2 of President University, trophies, certificates and amount of cash. This event has managed to become an annual event of the President Univer­sity that shows fairly impressive results, seen from the number of schools that participated in the competition.

This year, Precedent consists of five competitions such

as debates, Scrabble, writing speeches, and news casting. Participants who followed the competition were from high schools in Jabodetabek area and Bandung, reflecting the more extensive coverage of the competition compared to last year’s.

Starting from writing competition, the winner is Sendika Gegyan Tuhu of SMAN 19 Bandung, who successfully eliminated the nine other participants. Newscasting competition that puts the focus as a professional news anchor was won by Andre Gaga Suwanto of Mutiara Nusantara International School, who man-

aged to lead among 13 other contestants. The winner of the speech competition is Aussie Nurul Anisa of SMAN 3 Bogor.

The victors in Scrabble competition are from Tangerang, namely Andre Jonathan and Hardiyanti Citrawatisteal with a total of 329 points. And after arguments that earned the admiration of the audience, an open debate was held between SMAN 5 Tangerang represented by Deborah Ruth Lambok, Rismala Sari and Aprisha Z. Putri and Pelita Harapan Sentul City School’s Tiffany Valeska, Jennifer Sanantha and Makhijani Sherni. The latter eventually prevailed.

Four Indonesian Students Receive IELTS Scholarship 2013 Unisadhuguna Testing Center (UTC) working with the British Council are hosting the IELTS Scholarship Ceremony, Monday (25/11) at Graha CIMB Niaga.

This year is the first IELTS Scholarship programme in Indonesia; it will be a yearly event for both UTC and British Council. The IELTS Scholarship is given to students in the form of educational financial aid in the amount of Rp 25,000,000, which will be used for tuition payment for the bachelor or masters programme studies at an Australian, English, American or other educational institutions in other countries.

For 2013, the scholarship is awarded to four students, namely, Ashok Awinash Dulip, Azalia Primadita Muchransyah, Mawin Mahen, and Daniel Joseph Gunawan.

“IELTS is a globally recognized qualification that helps students achieve their ambitions for studies overseas. This scholarship further helps those ambitions by providing support in a tangible way through a financial grant.

This is an excellent scheme and one which the British Council is delighted to partner UTC with. I congratulate the winners, hope that they have a wonderful educational experience wherever they study and encourage others to go for the scholarship in the years to come,” Sally Goggin, Country Director, British Council.

“The objective of this financial aid is to help with the university tuition fees for those who will

Mariam Kartikatresni Unishaduguna Testing Center (UTC) Director

The IELTS test is developed by some of the world’s leading experts in language assessment.

It has an excellent international reputation, and is accepted by over 8,000 organisations worldwide, including schools, universities, employers, immigration authorities and professional bodies.

IELTS is the most widely accepted English language test that uses a one-on-one speaking test to assess your English communication skills. This means that you are assessed by having a real-life conversation with a real person. This is the most effective and natural way of testing your English conversation skills.

start studying in 2014/2015 and have taken the IELTS test which is held by UTC and British Council,” Unishaduguna Testing Center (UTC) Director, Mariam Kartikatresni stated.

This award ceremony is the main event of a series IELTS Scholarship event 2013 which will be attended by scholarship recipients, parents and representatives of educational institutions.

The UTC and British Council would like to congratulate the recipients and wish them all the best in their studies.

The international English language testing system (IELTS) is the world’s most popular English language proficiency test for higher education and global migration, with over two million tests taken in the last year.

UTC is one of UniSadhuGuna’s educational bodies, which administers international testing and examinations in Indonesia. They provide examination services for public, schools, universities and institutions.

UTC also administers examinations for United Kingdom universities and institutes which cover a wide range of academic, vocational subjects and distance learning courses. They also administer testing & assessment for English language, such as IELTS ™, Cambridge ESOL, and TOEFL®.

UTC offers and guarantees the security of the administrations of the examinations and also provides a qualified international standard testing room for conducting test or examination supported by a clean and quiet environment.

The objective of this financial aid is to help with the university tuition fees for those who will start studying in 2014/2015 and have taken the IELTS test which is held by UTC and British Council.”

“No Culture, No Future” “Culture is the driving factor to achieve sustainable development,” said Minister of Education and Culture Moh. M. Nuh at the opening of the 1st World Culture Forum (WCF) in Nusa Dua, Bali.

In his report to the Indonesian President, the Minister of Education and Culture also said that the character of culture is not stiff; it can move in any direction and can adapt quickly so that culture can be used as the right tool to achieve welfare.

“With culture, a virtual connection can be achieved between global communities, who will support one another so that a Cultural Convergence will be created leading to all cultures in various parts of the world to develop in harmony.”

The World Culture Forum itself emerged from the thoughts of President Susilo

Moh. M. Nuh Minister of Education and Culture Bambang Yudhoyono in 2005.

At the time, the President came up with the idea that if the world has a World Economic Forum and a World Social Forum, then the world should also have a World Cultural Forum, where all culture activists in the world can get together and share ideas and exchange experiences on culture and abstract the goodness of culture to promote welfare.

“No culture, no future,” said

Nuh in his speech.

Minister Nuh said with the blurring of boundaries and the narrowing distance, cross-cultural flow is increasingly torrent. This fact, he said, would cause the intersection of culture thatcausing two possibilities.

“First is cultural domination Of course, we do not want it to happen because it won’t bring peace and harmony,” he said.

The second possibility is the convergence of culture, which is built on the principle of mutual understanding and mutual respect. To realize cultural convergence, dialogues and cultural cooperation involving all elements of culture in the world are needed.

The World Culture Forum I, held in Nusa dua, Bali, November 24-27, 2013, saw 800 participants from 65 countries.

This year, Precedent consists of five competitions such as debates, Scrabble, writing speeches, and news casting. Participants who followed the competition were from high schools in Jabodetabek area and Bandung, reflecting the more extensive coverage of the competition compared to last year’s.

President University Rector, Dr. Chandra Setiawan, Ph.D

Minister Syarif Hasan Receives Honorary Professorship From Fukui Preferctoral University Minister of Cooperatives and Small and Medium Enterprises Syarif Hasan has received an Honorary Professorship from the Fukui Prefectoral University (11/18).

On the occasion, Minister Syarif also gave a pub-

lic lecture which was attended by business people, representatives of the Fukui Regional Government, Indonesian observers and academics.

The Minister explained about the potential and development of cooperatives and small and medium enterprises in Indonesia,

especially to support Indonesia’s economy.

This matter is on the agenda of activities of the Ministerial Working Visit Delegation to Japan, November 16-22, 2013.

During the working visit in Japan the Minister of Cooperatives and Small and Medium Enter-

prises had a dialog with the association of technology graduates who work in Japan, Enjina Nusantara in Osaka, visited the Tempe (soybean cake)Factory owned by Rustono in Shiga, had a meeting with Governor Toyama, and continued his visit to Tokyo.

The President Post

BUSINESS BUSINESS BRIEFS Petrochina Increases Gas Supply For Tanjung Jabung Power Plant PT PetroChina Jabung Ltd finally agrees to increase gas supply for the gas-fired Tanjung Jabung Power plant in Tanjung Jabung Barat District in Jambi.

Additional gas is needed by the power plant to increase its power supplying capacity, Field Administrator of PetroChina Riza Firmahendra said in Kuala Tungkal, Tanjung Jabung Barat municipal city.

The agreement on the addition of 2.5 MMFD of gas for the power plant had been signed between Petrochina and the Tanjung Jabung Barat district administration, Riza said on Thursday.

He said the additional supply is expected to solve problem of shortage in power supply in that district, which has experienced inconvenience due to frequent blackouts so far. “Hopefully the problem could be sorted out this week,” he said.

He said the power plant already has enough gas but the use of power is

SECTION B December 2013 Vol. 2 No. 12 www.thepresidentpost.com

too much at night in the district. He said there is no shortage of supply in daytime, adding “the problem comes only at nighttime.”

If the gas supply is increased, there would be oversupply of power at daytime, therefore addition of gas supply has to be well calculated, he said.

Head of the district energy and mineral service Yon Heri said the addition to be provided by Petrochina would bring the total gas supply to 4 MMFD for the power plant.

reduce imports by 6.8 million tons a year, Hidayat said. He said the joint venture project is expected to be completed and to be commissioned by the president on Dec. 23 this year.

“We are confident that the factory will boost development of downstream industries in related sector such as shipbuilding, infrastructure and machinery industries, he said.”

PT Krakatau-Posco Now Less Dependent on Steel Imports

PT Garuda Indonesia Tbk (Garuda) said it will launch a rights issue by selling 10 percent of rights shares in the first half of 2014.

“The underwriter for the rights issue will be announced next week,” Emirsyah Satar, the president of the nation’s flag carrier, said here on Tuesday.

The right issue plan has been approved by the shareholders, Emirsyah said without giving details about the fund to be earned from the share sales.

He only said that the fund would be used for business expansion such as opening new domestic and international routes and to strengthen capital. “Next year we will serve direct flights to London,” he said, adding the funds would not be used to buy new aircraft.

Funds for aircraft shopping has been available from banks and lessor, he said. Currently , the airline has 131 units of aircraft and next year there will be an addition of 27 units, he said.

Construction of the integrated steel factory by PT Krakatau-Posco is aimed at reducing dependence on steel imports , which reach 9 million tons a year.

PT Krakatau-Posco in Cilegon, Banten, is a joint venture between the state owned steel maker PT Krakatau Steel and the South Korean steel giant Posco.

“PT Krakatau-Posco, which will have an annual production capacity of three million tons and investment in nine other base metal industries, would contribute considerably to steel supply in the country ,” Industry Minister MS Hidayat said in Cilegon on Thursday.

The factory of Krakatau-Posco and nine other base metal factories will

Garuda To Do Rights Issue

infobanknews.com

HSBC: RI Remains Top Investment Destination HSBC Indonesia predicted that Indonesia will still chalk up positive investment growth in 2014 despite discouraging trend of economic slowdown.

H

SBC Indonesia predicted that Indonesia will still chalk up positive investment growth in 2014 despite discouraging trend of economic slowdown.

The investment would continue to grow because of good handling of inflation and trade balance by the government, HSBC Indonesia Managing Director of Global Markets Ali Setiawan said in a seminar on “HSBC Global Economic Outlook 2014” here on Wednesday.

“Bank Indonesia has taken a series of steps and the government has been consistent in its policy in dealing with structural problem and redressing trade balance,” Ali said.

He said foreign investors are still interested in doing business

in Indonesia, notably Japan. He added Japan still places Indonesia on top of its investment destination list.

“Indonesia has done good job in the eyes of the international community. Indonesia is most interesting not only for Japanese investors. European and US investors also are similarly interested,” he said.

The investment market is still big in Indonesia, he added, citing Java is still open for new investments such as infrastructure. “In the infrastructure sector we are still lagging behind neighboring countries.

Fundamentally, the Indonesian economy is still growing. Therefore, there is much concern,” he said.

The government, however, needs to be more transparent

and consistent in carrying out its policies, he added.

HSBC Economist Su Sian Lim said Indonesia and other ASEAN countries have basically shown strong economic performance.

“Huge domestic demand and relatively low unemployment rate are an advantage from the point of retail and household shopping as well as business sector,” Su San said.

She said steps taken by Bank Indonesia followed with fiscal policy of the government through the finance ministry aimed at narrowing current account deficit, controlling exchange rate, curbing inflation and maintaining foreign reserve have worked well.

“It has to be acknowledged that oil fuel price adjustment in June 2013 had helped reduce current account deficit,” she added.

SOE Minister Wants N. Sumatra Steam Power Plant Project Completed Soon State-Owned Enterprises (SOE) Minister Dahlan Iskan has asked the technical team to settle various problems and accelerate the development of the Pangkalan Susu-Langkat steam power plant (PLTU) project in North Sumatra.

Head of SOE Ministrys Public Relations and Protocol Affairs Faisal Halimi said here on Monday that in response to the ministers call, it was important for the technical team and other related elements to conduct a test and evaluation on the Pangkala Susu-Langkat PLTU project .

Faisal said that minister Dahlan on Sunday night held a meeting at the PLTU Pangkalan Susu-Langkat Hall, which lasted until the wee hours on Monday.

The meeting was also attended

by Hamansyah Purba (the PLTU project manager), Said (the projects mother transmission general manager), Dyananto (general manager for North Sumatra area) and Lin of GPACK. The minister expressed his hope that the meeting would provide a clear picture about the problems being faced in the development of the project.

“All need to be assessed to see the obstacles being faced and

SOE Minister Dahlan Iskan

be evaluated to know what have to be done. For that we need to work fast to catch up the target,” Minister Dahlan said.

The meeting lasted in a friendly atmosphere and was interspersed with a dialog in the Mandarin language between the minister and Lin. Dahlan was seen impressed with the meeting results where the technical team expressed its readiness to complete certain works in certain deadlines such as the work on pier, water installations, water treatment, coal handling, boilers, turbines, switch yard and transmission.

“What else, what urgent problems are there that need to be handled soon. If all can already

be tested, just do it immediately. Regarding transmission, just report it immediately to me if there are towers which enter the plantation areas of a state firm (BUMN). If need be, just send me a text message or call me directly,” the minister said.

The minister also asked the team to write on the whiteboard all details of the obstacles such as transmission problems and a number of towers which had been pulled down by the local people. He also asked the details of problems with regard to locations whose land had not yet obtained a license and had not yet received power supply, thereby delaying the testing works.

On a number of areas considered difficult to obtain land clearance for tower construction sites, Minister Dahlan asked the project executors to make approaches as well as possible, including efforts to ensure that the local people would not be disadvantaged.

“It should not happen that the people whose affected plantations or lands become disadvantaged by the project. I do not agree with it (if the interest of local people is harmed,” the minister stressed.

“HSBC Global Economic Outlook 2014” seminar. HSBC Indonesia Managing Director of Global Markets Ali Setiawan said the investment would continue to grow because of good handling of inflation and trade balance by the government.

December 2013 Vol. 2 No. 12

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Business

Pertamina, Chevron, Star Energy to Develop Geothermal Projects elshinta.com

PT Pertamina Geothermal Energy (PGE) has signed principles of agreement (PoA) with Chevron Geothermal Indonesia Ltd and Star Energy Geothermal Pte Ltd to develop six geothermal power plants in the country.

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GE spokesman Hendi Suhendi said on Wednesday that the agreement was signed in Jakarta on Tuesday. “With the PoA, all sides have agreed to cooperate to develop a financial model and work schedule for the geothermal projects,” he added.

He said four of the six projects – Hululai, Tambang Sawah, Sungai Penuh and Semurup – will be developed in cooperation with Chevron.

Star Energy will develop units 1, 2 and 3 of the Karaha Bodas geothermal power plant, he added. “Chevron and Star Energy were earlier PGEs joint operation contract partners,” he noted.

Star Energy was PGEs joint operation partner for the Wayang Windu project, while Chevron was the partner for the Gunung Salak and Darajat projects, Hendi said. The Hululais project in Bengkulu, the Sungai Penuh project in Jambi and the Karaha Bodas project in West Java are part of the second phase of the fast track program (FTP-2), he pointed out.

According to Energy and Mineral Resources Ministry Regulation No. 21/2013, the Hululais project will have a capacity of 2x55 MW, while the Sungai Penuh project will have a capacity of 2x55 MW. Unit 1 of the Karaha Bodas project will have a capacity of 30 MW, while units 2 and 3 will have a capacity of 55 MW each.

The FTP-2 projects cover 76 units with a combined capacity of 17,918 MW. Seventeen units with a capacity of 5,749 MW will be developed by state electricity company PLN, while 59 units with a capacity of 12,169 MW will be developed by independent power producers (IPP). Unit 1 of the Patuha geothermal power plant, with a capacity of 55 MW in West Java, is expected to become the first FTP-2 project to start operations.

Pertamina Developing Arun Gas Terminal

Pertamina has meanwhile begun constructing the Arun liquefied natural gas (LNG) in Aceh Province and is expected to be completed at the end of 2014.

Pertamina Director for Gas Affairs Hari Karyuliarto said in a press release here on Sunday that the gas project was expected

to meet the need for gas of Aceh and North Sumatra provinces. “The gas terminal is the first LNG refinery conversion into regasification project,” Hari said.

The groundbreaking ceremony was conducted on Saturday

by Hari at the LNG Plant site in Arun, Lhokseumawei, North Aceh. President Director of PT Rekayasa Industri Mochammad Ali Harsono, President Director of PT Pertagas Indra Jaya and President Director of PT Pera Arun Gas Teuku Khaidir also attended the groundbreaking ceremony.

LNG conversion of LNG refinery project into regasification was first decided by the government in 2012. The Arun Terminal has a capacity of 400 million metric standard cubic feet per day (MMSCFD) or three million tons per annum.

Hari said that at present the terminals gas commitment was still 120 MMSCFD for stateowned power firm PLN. The Arun terminal will be integrated with Arun-Belawan transmission pipes which stretch 340 km long. At present, the construction of pipes with an open access scheme is underway and is scheduled for completion in 2014.

It is expected that about 50 percent of the project would be completed at the end of 2013.

The project is worth $570 million, of which $80 million for the construction of the terminal.

Pertamina, Thai company to acquire Hess oil and gas block

Pertamina and PTTEP, a Thai oil company, have agreed to acquire oil and gas blocks of Hess Corporation in Indonesia at a price of $1.3 billion.

Pertamina spokesman Ali Mundakir said here on Monday Pertamina and PTTEP would split the acquired assets of the US company paying the price 50 percent each. “The deal would be settled in line with a number of conditions set in the sale and purchase agreement,” Ali said.

Pertamina will be represented by its subsidiary PT Pertamina Hulu Energi and PTTEP by PTTEP Netherlands Holding Cooperatie UA. With the acquisition, Pertamina and PTTEP would have 75 percent participating interest in the Pangkah block and 23 percent in the Natuna Sea A block.

Both Pangkah and Natuna Sea A are offshore blocks.

Pangkah is located northeast of Java with a production rate of 7,000 barrels of oil per day and 33 million cubic feet per day (MMSCFD)of gas. The Pangkah block has a proven reserve of around 110 million barrels of oil equivalent. Pertamina and PTTEP will jointly operate the Pangkah block.

The Natuna Sea A block is located in the West Natuna sea with gas production rate of 220 MMSCFD including 145 MMSCFD from the Anoa field and 75 MMSCFD from Gajah Baru, and oil production rate of 2,350 barrels of oil per day. The Natuna Sea A block has a proven reserve of around 209 million barrels of oil equivalent.

Other shareholders of Natuna Sea A block are Premier Oil as the operator with a 28.67 percent share , Kufpec as a 33.33 percent owner and Petronas holding a 15 percent stake.

Ali said the acquisition plan is part of Pertamina’s ambition to become a dominant player in upstream oil industry in the country in 2015. “In 2025, Pertamina’s oil production is to be pushed up to 2.2 million barrels of oil equivalent per day including from its production units in the country and abroad,” he said.

Recently Pertamina wrapped up the process of acquiring oil blocks in Algeria and Iraq. In Algeria it acquired the 405a block from ConocoPhillips Algeria Limited at a price of $1.75 billion, adding 23,000 barrels of crude oil to its daily output and more than 100 million barrels to its oil reserves.

In Iraq, Pertamina completed the acquisition of a 10 percent stake in the West Qurna I block from ExxonMobil Iraq Limited.

West Qurna I, which is located near the city of Basra, southern Iraq, has a production rate of 500,000 barrels of oil per day.

With the 10 percent stake acquisition, Pertamina will have a share of 50,000 barrels of crude oil per day from the block.

The share is expected to increase as oil production of the West Qurna 1 block is expected to rise to more than 1 million barrels per day in the near future. The West Qurna block has reserves of around 9 billion barrels of oil .

With the ambitious expansion abroad, Pertamina hopes to break into the ranks of world class oil companies in the next several years. The company’s president director, Karen Agustiawan, said in a press statement here on Saturday that the acquisition was part of the company’ss efforts to achieve its vision of becoming a world-class company. “The corporate action is a strategic stepping stone to expand its business abroad, especially in countries with abundant oil and gas resources such as Iraq,” she said.

She noted that Pertamina’s expansion overseas was aimed at supporting the government’s program of sustainable energy resilience. The acquisition of a 10 percent share, or a participating interest in West Qurna I Block, was carried out by PT Pertamina Irak Eksplorasi Produksi as Pertamina’s subsidiary.

Besides Pertamina, ExxonMobil also sold 25 percent of its shares in the block to PetroChina Co. ExxonMobil will later only control 25 percent of the shares in the block but it will remain as the operator. The remainder of the shares belong to Iraqi stateowned company South Oil Company (25 percent) and Shell West Qurna BV (15 percent).

Pertamina is also now involved in acquisitions of shares in Block 405a belonging to ConocoPhillips Algeria Limited in Algeria, valued at $1.75 billion, or about Rp20 trillion. With the acquisition of Block 405a, Pertamina would have an additional supply of 23,000 barrels per day.

Pertamina’s additional reserves from Block 405a are more than 100 million barrels of oil.

Pertamina officially has three main oil fields, namely Menzel Lejmat North (MLN), Ourhoud, and EMK in Block 405a, which was initially controlled by Conoco.

After the acquisition, Pertamina will control 65 percent of the participating interest in MLN and act as the operator. In Ourhoud and EMK, meanwhile, Pertamina will have 3.7 percent and 16.9 percent participating interest, respectively, but it will not be the operator of the fields.

Oil production from Block 405a is to be processed at Pertamina’s refineries.

SOEs Profit to Reach Rp150t in 2013 SOEs in sectors such as telecommunications, banking and construction were the major profit contributors.

State-Owned Enterprises (SOE) Minister Dahlan Iskan on Thursday has said that the net profit of Indonesian SOEs will hit Rp150 trillion (around $136 billion) in 2013, increasing 15.3 percent from last years Rp130 trillion.

“Amid the global crisis in 2013, the fact that net profit of all SOEs can grow by Rp30 trillion is remarkable,” Minister Dahlan said after a meeting with the SOE Ministrys top brass in Jakarta on Thursday.

The net profit growth of 141 SOEs is higher than the estimated growth rate of five to six percent for the national economy in 2013, Dahlan added.

SOEs in sectors such as telecommunications, banking and construction were the major profit contributors. However, not all SOEs posted a profit in 2013, Dahlan noted. Enterprises in

the plantation and mining sectors struggled amid the global crisis as some commodity prices dropped in the international markets. Therefore, SOEs are being urged to set new efficiency standards and work together to develop their potential, he said.

Pertagas-PGN Merger Possible

Dahlan has meanwhile called on leaders of PT Perusahaan Gas Negara (PGN), PT Pertamina and its subsidiary PT Pertagas for a meeting to find a solution to a war of words about the idea of merger between the state gas companies.

“I call them to hear their respective arguments. There would be no emotional debate. Everyone will speak proportionally,” Dahlan said on Thursday.

The conflicting statements spread by the mass media came after the idea of merger between PGN and Pertagas, a gas subsidiary of Pertamina. PGN said it could acquire Pertagas, but Pertamina claimed it is in a better position to acquire PGN to be merged with Pertagas.

The idea of merger followed the governments scheme of open ac-

Amid the global crisis in 2013, the fact that net profit of all SOEs can grow

by Rp30 trillion is remarkable.”

Dahlan Iskan State-Owned Enterprises (SOE) Minister

cess under which Pertagas is allowed to use PGNs infrastructure of gas pipelines. The share price of publicly listed PGN fell after the merger row, but Dahlan said,”I dont believe the share price fall was caused by the acquisition issue.”

He said the open access scheme is “good for the state although it may not be very good for PGN.” Earlier he suggested Pertamina acquire PGN. On Thursday he said in implementing the open access scheme the government will be fair to both sides but most important

is the interest of the state. “The government seeks to combine ideas that no party would be harmed,” he added.

Pertamina said a merger between Pertagas and PGN would strengthen its oil and gas business. Pertamina’s vice president in charge of corporate communications, Ali Mundakir, said Pertamina is stronger than PGN in gas business fundamentals. “Therefore, PGN should be placed under Pertamina,” Ali said, adding, “However, it is for the government to decide.”

He said Pertamina has finished studies on possible merger between PGN and Pertagas and the result was already submitted to the government late last year.

A PGN director Wahid Sutopo said PGN should be the one to acquire Pertagas to integrate gas pipelines. “We have prepared the concept. It needs only a decision from the shareholders,” Wahid said PGN controls the largest network of gas distribution in the country but it produces no gas.

Pertamina produces gas with distribution handled by Pertagas.

According to Energy and Mineral Resources Ministry Regulation No. 21/2013, the Hululais project will have a capacity of 2x55 MW, while the Sungai Penuh project will have a capacity of 2x55 MW. Unit 1 of the Karaha Bodas project will have a capacity of 30 MW, while units 2 and 3 will have a capacity of 55 MW each.

Merpati Nusantara Debt To be Converted into Shares The debt of PT Merpati Nusantara Airlines to a number of other state companies would be converted into shares in order to save the debt-ridden state owned airline, an official said.

“We agree with the conversion of the debts,” Coordinating Minister for Economy Hatta Rajasa said here on Tuesday after a meeting to save the airline .

In addition, the debt in the form of sub-loan agreement (SLA) to the government would be converted into non-cash state capital participation, Hatta said According to Hatta, currently Merpati ran up a total debt of Rp6.7 trillion to 20 creditors. Debts to state companies including airport operators Angkasa Pura I and II, Bank Mandiri, energy company Pertamina and insurance company Jasindo totaled Rp2 trillion.

The rest includes Rp2.5 trillion in SLA to the govern-

Hatta Rajasa ment and around Rp3.2 trillion in tax and to other creditors.

Hatta said the government decided to restructure the debts of Merpati as it believes the airline could still rise from its financial woes. “Merpati is still needed to serve pioneer flights in a number of provinces especially in eastern part of the country,” he said.

Merpati would be given one month to submit its business plan to the government and other loan providers. “Merpati is also allowed to look for funds for the procurement of aircraft,” he said.

Looking for partners, Minister for State Enterprises Dahlan

Iskan said he agreed with the decision of the government to give Merpati more opportunity to resume operation. “Actually, based on a conclusion of the state asset management company PT Perusahaan Pengelola Aset (PPA), Merpati should be closed down, but the government found a way out by converting debts into shares,” Dahlan said.

He said after the process of debt conversion has been wrapped up Merpati is allowed to look for partners. “So far Merpati may not have partner as it has a big deficit. Now with the book cleaned of debts, Merpati could invite investors to jointly develop its business,” he said.

He did not rule out Merpati merging with Garuda, the nation’s flag carrier. However, the conversion plan still needs approval from the Commission VI of the House of Representatives, he said.

PT Pertamina EP Gets New President Director The management of the states oil and gas company, PT Pertamina, has appointed President Director of PT Pertamina Geothermal Energy Adriansyah to replace Syamsu Alam as president director of PT Pertamina EP. A Pertamina EP press release received here on Thursday said Syamsu had subsequently become the senior vice president (exploration) for the Pertamina Upstream Directorate, replacing Rony Gunawan.

Meanwhile, Rony will be appointed as president director of Pertamina Geothermal Energy to replace Adriansyah. Pertamina also appointed Sigit Raharjo as the VP Upstream Technology Center director to replace Richard H. Tamba.

Meanwhile, Sigits position as Pertamina Geothermal Energys director of operations has been handed over to Richard. The entire handover was conducted in Jakarta on Wednesday, Nov. 20.

Pertamina believes Adriansyah is the right person for the

position of president director of Pertamina EP as he has had a long career in the development of the Upstream Oil and Gas Industry Technology Center under the Pertamina Upstream Directorate.

Adriansyah said he would bring improvements to Pertamina EP with a view to enabling Pertamina to emerge as a worldclass energy company by 2025. “The production target should continue to increase,” he remarked.

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December 2013 Vol. 2 No. 12

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Investment

Divesting in the Stock Market

By Wawan Hendrayana (Research & Investment Analyst)

Investors with longterm perspectives are not worried about the bourse’s volatility. History showed that long term investment is very profitable provided that domestic economic fundamentals are stable.

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istorically the end of the year is an interesting time for investors in the stock market because listed companies normally issue their third quarter financial report in these last months, which could serve as the barometer to assess their 2013 performance. Listed companies usually report higher income in line with the country’s sustainable economic growth. Such a condition would fuel investors’ optimism to purchase shares of listed companies that posted positive performance. Such trend is evident in the past 10 years where the composite index (IHSG) performed better compared to other months every December with gain probability up by 100%.

Historically, the probability of the IHSG to book positive returns in November over the past 10 years is only 80%. It’s true that there is no guarantee that historical data will repeat itself, the probability that the IHSG would book a negative performance may be derived from various factors such as inflation, interest rate which continued to show an increasing trend and the weakening rupiah exchange against the US dollar following companies’ needs to pay out dividends and loan interest.

As for this year, the impact of the government’s decision to raise the price of subsidized fuel will be reflected in the inflation rate at the end of the year which will unlikely lower bank loan rate. Such a condition could add to the negative sentiments in November.

The orientation on the stock investment should be long term, but to optimize the yields investors should have the courage to take profit as well as to perform cutloss.

Investors with long-term perspectives are not worried about the bourse’s volatility. History showed that long term investment is very profitable provided that domestic economic fundamentals are stable.

Despite Indonesia’s sound economic fundamentals and many analysts’ optimism that the IHSG would return to the 4,800 mark at the end of the year, it’s inevitable that the index movement is still influenced by overseas sentiments. The correlation between IHSG and DJIA (Dow Jones Industrial Average) reached 0,1

in the past three months. This means, the movements of these two bourses are relatively not going in the opposite direction. The Indonesian bourse didn’t enjoy the US bourse’s positive rally.

The movement in the opposite direction is believed to have started since the Fed announced the possibility of cutting the economic stimulus in the United States. As a result, many foreign capitals parked in our capital market were pulled out by investors over liquidity problem worries. Fundamentally, the United

States is observing several major issues such as its efforts to strengthen its domestic economy, minimizing unemployment rate and the tapering development. Improvement in its economy in the short term is expected to trigger capital flight from Indonesia to the United States that could cause the IHSG to suffer a correction because 65% of investors in the Indonesian bourse are foreign. The correction, which is likely to happen from January until February, can be seen as an opportunity to hunt for relatively cheap shares with good

fundamentals while continuing to keep a close watch on development of inflation and interest rates.

February should serve as an opportunity to enter the bourse, either by purchasing stocks or mutual fund stocks.

These accumulations can optimize investors’ returns because according to studies, window-dressing phenomenon or share price increase always occurred ahead of the new year in Indonesia. Over the past 12 years, the IHSG always crawled up from early November–end of December and generally the rally would continue until April, so that any corrections in January-

Bear in mind that this assumption is made based on the history of data over the past 12 years and that there is no guarantee that the same pattern would repeat in 2013. It is best to have a long term orientation for investment on shares but to optimize the yields, investors should have the courage to take profits and to cut losses. Happy Trading!

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December 2013 Vol. 2 No. 12

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Automotive

BMW M5: Elegant Sport Sedan with the Latest Technology Innovations ausmotive.com

The latest innovation of this model is focused on design improvements in certain parts, which aims to deliver the best driving experience. The combination of elegant design and hallmark M is very athletic, indicating the presence of the new BMW M5.

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MW Group Indonesia launched the latest innovation for the classy luxury sedan with the high performance, the new BMW M5.

The latest innovation of this model is focused on design improvements in certain parts, which aims to deliver the best driving experience. The combination of elegant design and hallmark M is very athletic, indicating the presence of the new BMW M5. It features a new design and the addition of various BMW ConnectedDrive reinforces the character of innovative features on this vehicle. It comes with the best performance and with more innovation than ever before.

“The fans of BMW M series in Indonesia have given a warm welcome to 8 BMW M series models that have been launched in the last four years - including the BMW M6 Gran Coupé. This is one of the important factors

the center console area larger.

The composition of a typical M black grille - such as three columns of air flow at the bottom of the bumper - confirms the need for cooling air to the engine behind the grille.

There is also a large 10.2-inch screen that is connected with the iDrive system wrapped around a chrome-plated frame. For the first time, a Touch Controller is now available, with a touch-sensitive surface that enables users to enter characters when programming destinations in the navigation system.

The new BMW M5 has a 10 percent greater power and maximum torque has been increased by 30 percent. But in terms of fuel use, it is more efficient, which is 30 percent lower. ausmotive.com

in the success of BMW M,” said Ramesh Divyanathan, President of BMW Group Indonesia.

The most striking design in the appearance of the new BMW M5 is the M “kidney grille” which displays lines showing doublespoke design alloy wheels as the BMW M. Standard equipment on the new BMW M5 includes Adaptive LED Headlights and taillight design that uses a thin line of LED lights that produce a contrast effect that is easily recognizable, especially at night.

In the interior, the typical accent of BMW M is presented through the M leather steering wheel rim design that is adapted from the BMW M double-spoke design, and this model has storage space under the arm rest in

In addition to high performance, the new BMW M5 experienced a significant increase in efficiency. M TwinPower Turbo technology developed for the engine of this model combines with technological innovation of professional racing circuit with the EfficientDynamics concept. The new BMW M5 requires 4.4 seconds to accelerate from a standstill to 100 km/ hour, and it only takes 13 seconds to accelerate from 0 to 200 km/h. Its maximum speed is electronically limited at 250 km/hour.

The new BMW M5 has a 10 percent greater power and maximum torque has been increased by 30 percent. But in terms of fuel use, it is more efficient, which is 30 percent lower. Fuel consumption is an average of up

to 10 km/l with CO2 emissions of 232 g/km A unique feature of the new BMW M5 is the Head-Up Display that projects important information onto the glass right in front of the driver’s area. The combination of the color spectrum is used to display the various graphics and symbols, so that traffic signs can be displayed realistically. Head-Up Display of the BMW M also shows the gear being used and engine speed conditions marked by various colors, complete with Shift Lights.

The new BMW M5 is priced at Rp2.088.000.000 off-the-road, and is equipped with BMW Service Inclusive, which includes treatment for 5 years or 60,000 miles, whichever comes first. tflcar.com

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December 2013 Vol. 2 No. 12

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Events Review

Dozens of Infrastructure Investment Projects to Strengthen Indonesia’s Competitiveness TPP

To improve Indonesia’s competitiveness through infrastructure development, the Government has set up dozens of investment projects worth hundreds of trillions of dollars.

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oordinating Minister for Economic Affairs Hatta Rajasa stated that one of the goals of infrastructure development is to reduce the cost of logistics. He mentioned the cost of logistics that can be saved by infrastructure is 14.08 percent of the cost of production. Infrastructure will also reduce the number of logistics costs to GDP to 22 percent or 10 percent of the total cost of goods production.

“If we cannot reduce infrastructure development costs, then our competitiveness cannot be improved,” he said in the Indonesia Infrastructure Conference and Exhibition in Jakarta Covention Center (JCC), Wednesday (13/11).

Hatta also said to improve Indonesia’s competitiveness through infrastructure development, the Government has set up dozens of investment projects worth hundreds of trillions of dollars.

“We’re going to rectify and prepare projects on a large scale. 2025 projects are to be launched with an estimated investment of Rp 380 trillion, “ Hatta said when opening the event.

Infrastructure projects shown in IIICE 2013 are included in the Master Plan for the Acceleration and Expansion of Indonesian Economic Development (MP3EI) initiated by President Susilo Bambang Yudhoyono in 2011.

MP3EI is designed to help Indonesia enter into the top 10 world economies by 2025 with a total GDP of $4.5 trillion through the development of infrastructure in six economic corridors in Sumatra, Sulawesi, Kalimantan, North Maluku, Bali, Nusa Tenggara, Papua, Maluku and Java.

“This event is an appropriate vessel to develop Indonesia’s infrastructure to face the upcoming ASEAN Economic Community,” said Djoko Kirmanto, said the Public Works Minister in his speech at the opening ceremony of IIICE 2013.

Meanwhile, Alan Solowiejczyk, CEO of PT Infrastructure Asia 2013 who organized the IIICE 2013, said: “To be able to improve competitiveness, a nation must constantly improve the quality of its infrastructure. Indonesia under President Susilo Bambang Yudhoyono has shown determination and real work to improve the quality of infrastructure in Indonesia through the launch of MP3EI program.

We, from PT Infrastructure Asia as the organizer of IIICE 2013, is proud to integrate the mission of the government and the private sector to contribute to the advancement of Indonesian infrastructure through this event,” he said.

Coordinating Minister for Economic Affairs Hatta Rajasa at the Indonesia Infrastructure Conference and Exhibition in Jakarta Covention Center (JCC), Wednesday (13/11).

Kendal to Have Integrated Industrial Estate TPP/Heros Barasakti

PT Jababeka Tbk plans to build an integrated industrial area in Kendal, Central Java, said Chairman of Jababeka SD Darmono in the Socialization of Kendal Industrial Estate in the auditorium of Kendal District Office, Monday (19/11).

The event was also attended by Regent of Kendal Widya Kandi Susanti and Head of Investment and Integrated Licensing (BPMPT) Kendal Alex Supriyono.

Darmono said the establishment of Kendal Industrial Estate will have positive impact on the economic progress of Kendal and its surroundings. Darmono cited Kendal as a strategic area and has vast natural resources.

PT KIK (Kawasan Industri Kendal) will resemble the Cikarang industrial estate in West Java.

PT KIK is a joint venture between PT Graha Buana Cikarang (GBC), a subsidiary of PT Jababeka, and Sembcorp Development Indonesia (SDI), a Singaporean government-owned company that is an expert in developing industrial zones in Asia.

The company is 51 % owned by GBC and 49 % owned by SDI. The plan of groundbreaking is April 2014.

“Starting April 2014, Kendal Industrial Estate will begin to be realized with an estimated growth of 80 hectares of land per year,” said Darmono.

Darmono also promised to invite Prime Minister of Singapore Lee Hsien Long and President SBY to inaugurate the construction of Kendal Industrial Estate.

Darmono further said that there are some requirements from the investors, such as proximity to international airport, harbor, toll road, sufficient electricity, gas sources, water sources and advanced telecommunication, and adequate human resources and a large market.

To meet the investors’ requirements, Darmono is willing to build an integrated facility. For the quality of human resources to work in the Kendal Industrial Estate, Darmono had recruited workers from Kendal currently working at several companies in Jababeka Industrial Estate, Cikarang. Thus when it begins its operation, it already has skilled labors.

According to him, a modern industrial estate is like the arm of a government which organizes industrial areas with onestop-service to serve investors, not only the provision of land but

also management of infrastructure.

For that matter, he invites stakeholders to support the great plan. He also invited the commitment and support of the government, both district and provincial levels, in addition to the readiness of the community which also plays an important role.

“We (PT KIK) has big dreams with Kendal community, and we will start step-by-step. For that we need the support of the government and the communiuty,” he said.

In line with Darmono, Kendal Regent Widya Susanti Kandi said she expects the development of Kendal industrial estate to be accelerated.

“The industrial area will create employment, improve the economy, and the welfare of society,” she said.

In the future, Kendal industrial estate will be gradually developed and to reach 3,000 hectares.

“Each company is estimated to take about 10 hectares of land that can absorb up to 1,000 workers. Therefore, 300 companies will be built here and absorb total workforce of 300,000 people,” said Darmono.

SD Darmono said, “Jababeka is believed to be an arm of the government in terms of developing industrial zones and Special Economic Zones.”

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December 2013 Vol. 2 No. 12

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Events Review

Finance Minister: Government Policy is Asset of State Excellence TPP

Finance Minister Chatib Basri said that in the future, comparative advantage among other countries is an intangible asset in the form of government policy.

F

inance Minister Chatib Basri said that in the future, comparative advantage among other countries is an intangible asset in the form of government policy. The minister said, in Indonesia Investment Summit 2013, the upcoming policy will focus more on supply sectors, including infrastructure, bureaucratic system of government and human resources development. In terms of infrastructure, the government will draw up regulations on land acquisition that is widely perceived to be ineffective and inefficient.

On the bureaucratic side, the minister gave an example on investment permits in Indonesia which are complicated, timeconsuming as well as high-cost.

These matters obviously will affect the attractiveness of investment in Indonesia from the perspective of investors. Thus, the process of investment needs to be updated or reformed to become more friendly.

In the sector of human resources, the minister stated the quality improvement of human resources by conducting training is considered to be the domain of the private sector in accordance with their needs. This

is more appropriate as training given by the government may not be in accordance with market demand. Therefore, the government will support human resources development by the private sector by providing fiscal incentives.

“I hope with these policies sustainable economic growth in Indonesia will be achieved since 2013-2014 is a period of stabilization of economic growth,”added the minister.

At the same event, Vice President, Boediono, in his opening speech, said that Indonesia is a prospective investment destination given the wealth of natural resources, growing domestic market and growing young population structure.

According to him, the government will continue to maintain fiscal sustainability and provide room for expansion in order to encourage sustainable economic growth.

The event was held by the Investment Coordinating Board (BKPM) Indonesia and the Financial Times. It was attended by participants from various countries comprising of CEOs, entrepreneurs, leading thinkers, academics and government officials.

Finance Minister Chatib Basri stated the quality improvement of human resources by conducting training is considered to be the domain of the private sector in accordance with their needs. This is more appropriate as training given by the government may not be in accordance with market demand. Therefore, the government will support human resources development by the private sector by providing fiscal incentives.

BKPM: Indonesia Investment Climate is Conducive watch the video at: www.thepresidenttv.com

As Head of the Investment Coordinating Board (BKPM), Mahendra Siregar has a number of challenging tasks in the future.

One of them is improving investment services to become more simple and orderly.

In the presence of number of industry players during a visit to the Jababeka Industrial Estate, Mahendra announced several important achievements.

“Not long ago we announced the realization of the third quarter of total investment into Indonesia in the period of July to September. And for the first time the total realization of joint investment between Foreign Direct Investment (FDI) and Domestic Investment, Indonesia managed to exceed Rp100 trillion. Secondly,

for the first time in two consecutive quarters since the second quarter, domestic investment reaches half the value of FDI. This has never happened before.

Out of Rp100,5 billion, Rp33,5 billion is domestic while Rp67 trillion is FDI,” says Mahendra.

Mahendra further talked about minimum wages in Indonesia, which he said is not classified as a developed country but is no longer considered as a poor country. So any talk related to wages, according to Mahendra, should no longer be in the context of being the only income of workers concerning matters of life and death.

“In the near future, we will have universal health care or BPJS, where pensions, annuities, death or work-related accidents are all there so that wages do not cover insurances,” said Mahendra.

TPP

Head of the Investment Coordinating Board (BKPM), Mahendra Siregar

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December 2013 Vol. 2 No. 12

B7

Events Review OJK Launches Blueprint of Indonesia Financial Literacy

OJK to Raise Number of Domestic Investors in IDX

presidenri.go.id/Abror

The launch was carried out by OJK and the Association of Financial Services Institute (LJK) of the entire financial industry such as banking, insurance, capital markets, finance, mortgage, and pension funds. This program is important regarding the importance of education to make citizens learn about financial services so that the community can take the advantages of it.

O

toritas Jasa Keuangan has launched the blueprint of National Finance Literacy Strategy of Indonesia to increase understanding of the financial services for related parties in society.

President Susilo Bambang Yudhoyono during the inauguration of the program said that the economy and the country continue to grow with a certain complexity. But that is not necessarily mean all people know

Chief Executive Officer of Capital Market Supervisory of OJK Nurhaida

President Susilo Bambang Yudhoyono during the inauguration of the program said that the economy and the country continue to grow with a certain complexity. But that is not necessarily mean all people know about financial services. about financial services.

“Therefore, we have to take real strategic steps as the solution,” said SBY. He also said that the program is important regarding the importance of education to make citizens learn about financial services so that the community can take the advantages of it.

“The financial services industry must continue to evolve to develop the economy of country,” the President said.

Meanwhile, Chairman of the Board of Commissioners of OJK, Muliaman Hadad, said that the current level of literacy or access to finance in Indonesia is only 20%, much lower than the

Philippines with 27%, Malaysia 66%, Thailand 73%, and Singapore 98%.

The launch was carried out by OJK and the Association of Financial Services Institute (LJK) of the entire financial industry such as banking, insurance, capital markets, finance, mortgage, and pension funds.

The launch of the financial literacy was marked by the introduction of the Financial Literacy Car (Si Molek), the mascot and jargon of financial literacy (Treat the Money Wisely-SiKAPI Uang dengan Bijak), as well as a mini website and the Financial Customer Care (FCC) at 021500655.

OJK or Otoritas Jasa Keuangan will increase the number of domestic investors. A member of OJK’s Board of Commissioners and Chief Executive Officer of Capital Market Supervisory of OJK Nurhaida said that the number of investors in Indonesia’s capital market is still very small or only about 0.2 % of the total population of Indonesia. It is a challenge for OJK in the future to raise the number of domestic investors.

In addition, in the event of Annual Citi Capital Market Outlook 2014, Nurhaida, Monday (18/11), she also said that OJK will increase the supply of products in the capital market, both in numbers and types. The steps to be taken, among others, are simplifying new rules on minimum release of shares to the public through initial public offering or IPO. Previously, Indonesia Stock Exchange (IDX) proposed an increase to 20% from the current ruling of 10%.

The number of investors in Indonesia’s capital market is still very small or only about 0.2 % of the total population of Indonesia. It is a challenge for OJK in the future to raise the number of domestic investors.

Nurhaida added that it has obtained feedback to enhance the rate to 30%. She said that before simplification is applied, OJK will provide socialization and assess whether it is crucial or not.

Currently, the number of listed companies in Indonesia Stock Exchange (IDX) is 479, the lowest among countries in the region.

BSE India recorded the highest number of listed companies at 5,267 companies. The Stock Exchange of Thailand is just above the IDX with 577 followed by the Singapore Exchange with 782.

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December 2013 Vol. 2 No. 12

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Events Review

“Government Policies Should Pro Poor, Pro Job, Pro Environment”

The Importance of Public Relations in Business TPP/Chandra Nur

Domestic or foreign investment is still needed by Indonesia.

Every dollar invested in Indonesia produces one job.

T

rade Minister Gita Wirjawan has said that though the Indonesian economy is growing vast, the number of citizens with low income is still too large. The government should be responsible for the welfare of the citizens.

“Therefore, the policy should be taken not only pro-growth, but pro-poor, pro-jobs, and pro-environment,” he said in a speech at the seminar at University of Pelita Harapan, Tangerang.

On that occasion, Gita also reminded that the pattern of consumption determines the nation’s welfare.

“Consumption patterns will determine our welfare. If you tend to buy imported goods, remember that the money will go to the people in the country of origin. Thus, be wise on your consumption patterns,” he explained.

He added that if people like to buy goods produced in Indone-

The founder of the London School of Public Relations, Prita Kemal Gani.

Trade Minister Gita Wirjawan was giving a speech at the seminar at University of Pelita Harapan, Tangerang. sia, it will nurture the nation’s economy so investors are happy to invest, build factories, pay taxes and hire labors from this country.

“In the era of free trade, protective policy on domestic industry is not the solution. But smart consumers must be established.

Indeed, we should choose good

products at competitive prices, while still considering the impact on the health of our economy,” he said.

Gita also explains that Domestic or foreign investment is still needed by Indonesia. Every dollar invested in Indonesia produces one job. According to him, foreign investment is still 70%

in Indonesia, while domestic investment is only 30 %. But that does not mean anti-nationalism.

“Nationalism can be associated with the capacity to produce prosperity for people, not merely the possession of assets.”

According to him, the government does not allow foreign investors in strategic sectors.

The founder of the London School of Public Relations, Prita Kemal Gani, shared her knowledge on public relations (PR) in a discussion held at the Financial Club, Jakarta.

According to her, PR is about reputation. “Reputation should be obtained.

How do we get a reputation? By keeping our performance first,” she explained.

She said PR is about what you do, what you say and what others say about you.

“So it is important to say about yourself, about what you have, and what you are thinking,” said Prita.

Prita also said that PR is very important to tell the story of a company. She took the example of TWG Tea, which was established

How can we ask our employees to serve clients properly if they themselves are not happy? So of course we have to make our employees happy first.” in 1937. The company also provides training on how to drink tea in a proper way.

“The things that they do will always make customers remember them if one day they drink

tea, though it may not be TGW’s Tea,” said Prita.

Prita, who also serves as chairman of PERHUMAS, revealed that PR also includes maintaining a positive situation in the company by way of obedience on paying taxes, providing insurance to employees and protecting the environment.

She also added it is very important to make employees feel happy. “How can we ask our employees to serve clients properly if they themselves are not happy? So of course we have to make our employees happy first,” she explained.

In addition, according to Prita, PR should also able to maintain good relationships with clients, not just current clients but past clients so that one day they might be able to work together again.

Consumption patterns will determine our welfare. If you tend to buy imported goods, remember that the money will go to the people in the country of origin.

Thus, be wise on your consumption patterns.”

BRAD SUGARS:

Entrepreneur’s Job is Not to Stay Comfortable In a seminar attended by approximately 100 prominent entrepreneurs, Brad explained that the task of an entrepreneur is not to remain always “comfortable” but rather “uncomfortable”.

It is intended that an entrepreneur should get out of the comfort zone and make changes.

ActionCOACH Founder Bradley Sugars said that an entrepreneur must have the courage to make changes. “Change is a fact of life,” said Brad in Entrepreneur’s Masterclass organized by ActionCoach in Bali, 26 to 29 November 2013.

Brad Sugars established ActionCOACH (originally known as Action International) in his 20s. ActionCOACH is a global business training company based in Las Vegas, USA.

Brad said that the formula for life success is be x do = have. So if you have a goal, then be and do is the plan and action.”

In addition, Brad, in a seminar attended by approximately 100 prominent entrepreneurs, explained that the task of an entrepreneur is not to remain

always “comfortable” but rather “uncomfortable”. It is intended that an entrepreneur should get out of the comfort zone and make changes.

He said, “you may attend workshops, learn how to change, do it for a week or two and then go back to your old and more comfortable ways. That’s the hu-

man tendency, to go out of the comfort zone for a moment but come back again to the comfort zone. For that business coaching is required.”

Brad also shared how to obtain a quality of life. The first begins with quality of mentor/ teacher, quality of education/ knowledge, quality of beliefs

and dreams that lead to quality of questions, decisions, results, and quality of actions.

As a founder, Brad is now the main speaker at ActionCOACH seminars around the world. His mission is to provide business and investment education to as many entrepreneurs. In addition to seminars, Brad also pub-

lished books and conducted webinars.

ActionCOACH now has a presence in 50 countries with over 1,000 offices. In Indonesia, ActionCOACH was founded by Herman Susanto in 2001. ActionCOACH is in now Indonesia and has nine offices in Jakarta, Bandung, Surabaya, and Bali.

Brad also shared how to obtain a quality of life. The first begins with quality of mentor/ teacher, quality of education/ knowledge, quality of beliefs and dreams that lead to quality of questions, decisions, results, and quality of actions.

The President Post

Special Report

SECTION C December 2013 Vol 2. No. 12 www.thepresidentpost.com

Developing Tourism, Developing the Nation Improving tourism is crucial since the country will eventually run out of natural resources, which are the biggest income contributor. When this happens, tourism will hold a vital role in the country’s economy. Many are optimistic that Indonesia’s tourism, with the right policy, will be able to play its role as the spearhead of national economy.

I

n the past few years, the tourism sector has been developing rapidly. Its positive impacts can be seen from the increasing contribution to the country’s income and its work force absorption.

“Indonesia is a rich country” is not a myth; as the second biggest mega-biodiversity country in the world, Indonesia in fact now finds difficulty in determining its tourism icon. Meanwhile, other countries are already closely associated with their respective tourism icons. For example Singapore with its Merlion Statue, Malaysia with the Petronas Tower, England with Big Ben and Thailand with its white elephants.

The fact is, Indonesia has 746 languages and 1,128 ethnic groups with every region possessing its own uniqueness in terms of nature, culture, religion, history, heritage and culinary delights. As such, perhaps diversity should become the icon of Indonesia.

Although its management is not yet perceived to be optimal, Indonesia’s tourism sector is growing. Last year, according to Mari Elka Pangestu, the Minister of Tourism and Creative Economy (Menparekraf), tourism contributed 4% to the Gross Domestic Product (GDP) directly and 9% indirectly. The tourism sector, as Mari Elka put it, is one of the country’s promising driving forces of economic growth.

“With 9% of GDP, 30% of service export and 1 out of 11 employment absorbed by the tourism industry, the industry has become an engine of economic growth, employment and poverty eradication,” she said.

In the year of 2013, Menparekraf aims to get $10 billion from the tourism sector. This expectation is considered realistic as foreign exchange from tourism in 2012 managed to reach $9 billion from eigth million for-

With 9% of GDP, 30% of service export and 1 out of 11 employment absorbed by the tourism industry, the industry has become an engine of economic growth, employment and poverty eradication,”

eign tourists. Singapore, Malaysia, Australia, China and Japan were the top five countries that contributed the most to this number. With this achievement, the tourism sector was the fourth biggest contributor to the country’s foreign exchange of goods and service exports. Mari, a former Minister of Trade, mentioned that tourism growth was 6.6% in the first semester of 2013. This is above the global tourism growth figure of only 5%.

Furthermore, Mari said that tourism investment in 2012 increased by 200% as the result of high demand for lodgings and other tourist facilities. Mari underscored the tremendous rise outside Java Island. “I spoke to people from the hotel industry and they said that many investments outside Java are due to the lack of MICE facilities. This is said to be the effect of accessibility that is getting better and direct flights to many regions with affordable prices,” added Mari.

Mari pointed out the importance of cooperation with local people to maintain the environment’ssustainability for the sake of nature preservation that will eventually impact tourism.

“In order to manage the sustainability of the environment, we have to educate local people to care more for their surroundings, for example not to use dynamites when fishing. Of course, we also have to think about the economical benefits they can get. So, we have to direct them to other options like becoming guide tours, diving tours or we can recruit them to take care of coral reefs,” said the minister.

Kemenparekraf has established collaboration with many other bodies to make tourism destinations in Indonesia thrive.

One of them is with the Ministry of Switzerland Economy (SECO) through an MoU on the development of tourism destinations in Indonesia, which started in July 2010 and will be in force until

Mari Elka Pangestu Minister of Tourism and Creative Economy (Menparekraf)

Last year, according to Mari Elka Pangestu, the Minister of Tourism and Creative Economy (Menparekraf), tourism contributed 4% to the Gross Domestic Product (GDP) directly and 9% indirectly. The tourism sector, as Mari Elka put it, is one of the country’s promising driving forces of economic growth.

2015. This MoU covers Flores Island (East Nusa Tenggara), Tanjung Puting (Central Kalimantan), Toraja (South Sulawesi) and Wakatobi (Southeast Sulawesi). The improvement is done through a promotion and destination management organization (DMO). Therefore, the Swiss government is not only involved in the management but also in promotion.

Basically,

developing

tour-

ism is the same as developing a country, as the sector cannot be built partially. The development of tourism requires the involvement of all parts of the country. For instance, hotel-building will have to be followed by road construction, clean water supply, electricity supply, and many more. Improving tourism is crucial since the country will eventually run out of natural resources, which are the biggest income contributor. When this TPP/Heros Barasakti

happens, tourism will hold a vital role in the country’s economy.

Many are optimistic that Indonesia’s tourism, with the right policy, will be able to play its role as the spearhead of national economy.

Government Regulation (PP) No. 50/2011 regarding Master Plan of National Development 2010–2025 outlined at least 88 strategic areas of national tourism (KSPN). However, the Kemenparekraf strategy is now still focussed on 16.7.16 policy, which refers to 16 KSPNs, 7 special interest tourism areas and 16 main desired markets.

Meanwhile, Vice Minister of Tourism and Creative Economy Sapta Nirwandar said that the people’s orientation is still on land sites despite numerous types of tourism objects in Indonesia. As a maritime country and at the same time the biggest archipelago in the world, marine tourism deserves to be enhanced.

“Let’s take Raja Ampat; once we dive in, we can see more than 200 marine biotas in there. Our societies have yet to grasp the opportunities in marine tourism. Some marine service providers are even largely dominated by foreigners,” said Sapta.

Still, Sapta acknowledged that tourism growth in 2012 hit a new record with tourists visiting Indonesia reaching up to 8 million people, contributing foreign exchange worth up to $9 billion or about Rp 90 trillion.

For 2013, Kemenparekraf is targeting 9 million foreign tourists and 250 million local tourists.

Sapta emphasized the fact that progress in the tourism sector is actually producing a multiplier effect. The work force in the tourism increases by 200 to 300,000 people per year. Wages also increased, by around 4.03%, as well as the GDP and the regions’ original revenues (PAD).

Sapta also highlighted the significance of tourism in bringing positive impact to economic growth both directly, such as hotel and transportation, and indirectly, such as agriculture and industry.

“So, tourism is one of the ways we can do to improve social welfare,” affirmed Sapta.

Chairman of Tour and Travel Association (ASITA) Asnawi Bahar reckoned that the budget for Indonesia’s tourism promotion in 2013, at Rp 300 billion, is still small. Nevertheless, the budget has to be maximized effectively to maintain local markets and penetrate new markets.

According to Asnawi, the minimum budget allocated for tourism promotion does not mean that the government is not serious in managing this sector.

“The return in capital in tourism investment is faster compared to in other sectors; its multiplier effects are also faster. That’s why the DPR (House of Representatives) has to be convinced that tourism is a comprehensive industry. But I hope to see an increase in the budget so that we have one clear vision in developing tourism,” said Asnawi.

On the MICE industry in Indonesia, Asnawi said that its development is going well though still only in certain regions. He proposed every ministry should conduct domestic activities in many other regions other than Bali, Medan and Yogyakarta.

“The government should consider which region should be a MICE international destination after Bali. I am sure that MICE will help boost tourist visits, especially as hotels in all regions are already pretty sufficient,” stated Asnawi.

Asnawi did not deny that the number of foreign tourists’ visit to Indonesia is considerably behind compared to that of neighboring countries such as Malaysia and Singapore. He said Indonesia has to catch up by increasing the promotion budget, targeting the right market, finding new alternative markets to raise the number of tourists and, of course, getting real support from all parties, especially the government. In Malaysia, according to Asnawi, the budget for tourism promotion abroad is backed up 70% by the government. The same thing cannot be said of Indonesia.

“Our optimistic target in ASITA on foreign tourists’ visit this year is 10 million, and the pessimistic target is 9 million. Actually, we have covered the European market though not yet maximum. This year, the world’s tourism growth is good enough for us to seize the moment to enter a new market like China. We hope to get 100,000 tourists from China,” said Asnawi.

Another potential market is Sau-

The return in capital in tourism investment is faster compared to in other sectors; its multiplier effects are also faster. That’s why the DPR (House of Representatives) has to be convinced that tourism is a comprehensive industry. But I hope to see an increase in the budget so that we have one clear vision in developing tourism,” Chairman of the Pacific Asia Travel Association (PATA) Indonesia Chapter, SD Darmono proposes to the government, in this case the Ministry of Tourism and Creative Economy (Kemenparekraf), to develop at least 100 new tourism destinations. Darmono voiced the proposal in the PATA International Conference held at the Hotel Royal Ambarukmo, Yogyakarta, which was inaugurated by the Deputy Minister of Tourism and Creative Economy, Sapta Nirwandar and attended by PATA CEO Martin Craigs, PATA Indonesia Chairman SD Darmono, Director General of Tourism Destination Development of the Ministry Firman Rahim, as well as some of the other delegates.

Asnawi Bahar Chairman of Tour and Travel Association (ASITA)

continue to page C2

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Special Report Developing Tourism, Developing the Nation from page C1 di Arabia, a country whose number of tourists to Indonesia is currently very low. Asnawi said that ASITA, in collaboration with the Religious Affairs Ministry, has made a program using empty aircrafts originally transporting pilgrims to bring in tourists from Saudi Arabia. The program will take effect this year, said Asnawi.

“Aside from Saudi Arabia, another potential market worth chasing is Russia, whose people currently prefer Pattaya and Phuket in Thailand as tourism destinations. Staying time of Russian tourists is long enough,” stated Asnawi.

Coordination is needed to have a budget that is required to do promotion effectively. Asnawi said that the main problem of tourism is the lack of promotion and poor infrastructure. He

hoped that when doing promotion, all related groups focus on the campaign of tourism objects.

In Malaysia, for example, all related groups and institutions focus on campaigning tourism objects so there is integration in their promotion.

“It might take a long time for tourism to be the biggest contributor to the country’s income.

But this is neither daydreaming nor a grandiose ambition. We have the potentials.”

On a different occasion, Director of Marketing and Business Development of PT Taman Wisata Candi Borobudur, Prambanan and Ratu Boko Agus H. Canny requested the government to reconsider the current promotion strategy. In his opinion, what the government has been doing is not effective to boost the visit of foreign tourists to Indonesia. The best way to promote Indonesian tourism destina-

It should be realized that the main draw of Indonesia’s tourism is actually not its nature but its people as they are graced with a warm attitude, cordial manners, friendly smiles and generous hearts. With all its potentials and multiplier effects, the tourism sector should be given a bigger chance to become a priority in regions’ development. tion is by doing joint promotions, just like PT Taman Wisata Candi Borobudur, Prambanan and Ratu Boko is doing.

“There are several kinds of promotion we are doing. But the biggest one is maximizing the use of social engines, from running main and supporting websites, cooperating with the biggest traveling community, and providing applications in various languages. But the most important thing is doing joint marketing with a number of the world’s large tour operator like TUI. Lat-

er, the TUI will be the one collaborating with big companies worldwide to promote Borobudur. If we do not have such a collaboration, it will be impossible for our product to be in their promotion agenda,” said Agus.

So far, Agus asserted, his company has cooperated with about 100 big companies in the world to promote the Borobudur Temple as tourism destination.

“Because of this cooperation, we are helped by their digital marketing. Imagine hundreds

of these big companies activate their digital marketing teams every year, it will generate huge impacts and we are the only one in Indonesia that dares to do this kind of vast promotion aside from local and central governments. Direct budget disbursed was around Rp 7 billion and there was also an indirect budget that in total amounts to Rp 15 billion,” added Agus.

Agus said that Bali is by far the focal attraction of Indonesia’s tourism. Of 7.7 million foreign tourists in 2013, only 400 thou-

sand visited Borobudur. The rate of growth of Bali’s tourism is very fast, conversely Yogyakarta tends to be just so-so. For this reason, Agus said his company has to take tactical steps by doing joint promotions.

“I only give the Germans raw materials and they do it their own way. Hence, I hope the government could reconsider their next campaign. Exhibitions abroad are good but not enough.

They probably last three days, then what’s left? While what my company does appears in numerous tourism guidebooks. As long as the physical part is not ruined, the promotion will always continue,”said Agus.

Through investment and efforts to revitalize sources of economic growth such as tourism, sustainability and high growth of the economy can be achieved.

Marine tourism has massive potentials and could be a new

source of economic growth since this country is an archipelago with rich biodiversity acknowledged worldwide. Other tourism objects that can also be new sources of economic growth are culture and heritage, ecotourism, sports and recreation, culinary delights, shopping, healthcare and MICE. It should be realized that the main draw of Indonesia’s tourism is actually not its nature but its people as they are graced with a warm attitude, cordial manners, friendly smiles and generous hearts. With all its potentials and multiplier effects, the tourism sector should be given a bigger chance to become a priority in regions’ development. The tourism industry in some countries plays important roles as the most promising sector for economic growth and it is not impossible that one day the same thing will happen in Indonesia.

In Pursue of Meeting Target, KEK Intensifies Development tanjunglesung.com

Unlike other Special Economic Zones (KEK) initiated directly by the government, the KEK Tanjung Lesung will be developed by the private sector: the Jababeka Group.

A

s a Special Economic Zone, Tanjung Lesung keeps on enhancing its development to attract more tourists.

As a matter of fact, this tourism destination in Banten is envisioned to be the next Bali.

Unlike other Special Economic Zones (KEK) initiated directly by the government, the KEK Tanjung Lesung will be developed by the private sector: the Jababeka Group.

As conveyed by Coordinating Minister of Economic Affairs Hatta Rajasa, Tanjung Lesung has a big potential in the Indonesian tourism sector. Therefore, this zone will be developed to be integrated with tourism, regardless of the insufficient infrastructure. The decision of Tanjung Lesung as a tourism KEK is enforced through government regulation PP No. 26/2012 on Special Economic Zones–Tanjung Lesung.

On supporting facilities, Hatta highlighted the need for freeways to shorten the duration from Jakarta to Tanjung Lesung that usually takes 4-5 hours.

“Following up on this matter, the central government plans to evaluate the feasibility of constructing a road to Tanjung Lesung. The funds for it is for the Minister of Public Works (PU) to analyze,” he told journalists after the evaluation meeting on KEK proposal in Jakarta some time ago (26/7).

He projected this tourism zone to be in operation in the early 2015.

Previoulsy, Hatta said that an airport will be built in the area of Tanjung Lesung. The building of this airport has to be

backed up by road construction.

The Ministry of Public Works (PU) itself, according to him, has announced that the initiator has proposed the plan to build an airport. At that time, he affirmed the distinction between Tanjung Lesung and the other KEK. “It is different, Sei Mange was proposed mostly by BUMN (state-owned enterprises) whilst Tanjung Lesung by the private actor,” he said.

The development of this area actually has been carried out since 1998. Director of PT Banten West Java (BWJ) Tourism Development Setiawan Mardjuki, as the organizer of this area, said the lack of improvement of infrastructure is causing slow development. This is unfortunate as the number of tourists visiting this place keeps increasing every year.

“The development is slowing down because of poor infrastructure. Yet, visitors start to come and their number increases every year. Now, we can attract about 100 to 150 thousand per year,” said Setiawan.

According to Setiawan, the area of Tanjung Lesung will be expanded to 1,500 hectares in which 2,000 units of rooms will be built. Recently BWJ launched the newest type of villa from Kalicaa Villa Estate.

As conveyed by Coordinating Minister of Economic Affairs Hatta Rajasa, Tanjung Lesung has a big potential in the Indonesian tourism sector. Therefore, this zone will be developed to be integrated with tourism, regardless of the insufficient infrastructure. The decision of Tanjung Lesung as a tourism KEK is enforced through government regulation PP No. 26/2012 on Special Economic Zones–Tanjung Lesung.

Today BWJ is still focusing on infrastructure improvement related to accessibility such as a freeway and an airport. BWJ is finishing the development of 1.6 km-long airstrip. This airstrip will accommodate charter flights plying the route of Halim Perdana Kusuma–Tanjung Lesung and will start operating by the end of 2013. With the airstrip, it is hoped that visitors will have an alternative access to Tanjung Lesung. Meanwhile, the advancement of port facility is also included in the Tanjung Lesung Master Plan. A port will be built for cruise ships whose agendas include Krakatau or Ujung Kulon.

Setiawan stated that there are not enough rooms available to accommodate the increasing visitors on weekends. “Nowadays, every weekend our rooms are always full and on weekdays many MICE events are held in Tanjung Lesung,” he said.

The development of Tanjung Lesung area until 2020 consists of three steps and the ongoing process is now in the first step. Setiawan said that the marina is facilitated with a 18-hole golf course, villas and a theme park that are estimated to cost $100 million. Not long ago, BWJ signed an MoU worth $50 million with a Chinese company for

There is always opportunity and hope, and it is not impossible that one day Tanjung Lesung can become an international tourism destination. Bali is an island, while Tanjung Lesung is a resort. The latter has beautiful nature. Bali has the sea, but so does Tanjung Lesung; Bali has mountains and its strong cultural elements, but so does Tanjung Lesung. The government, with the help of the media, is expected to be more vigorous in promoting this KEK. The question is, how fast can this process be done.”

Setiawan Mardjuki, Director of PT Banten West Java (BWJ) Tourism Development

the development of a marina and a hotel, though it needs times to put the project into realization.

When inquired about the finishing target by 2020, Setiawan is optimistic that the target can be achieved.

“Our target is indeed that year, but there are so many problems to solve, including infrastructure, internal matters and of course, we need the support from the government because we cannot move alone, unlike Bali that has been integrated entirely,” said he.

Tanjung Lesung, he admitted, is not yet familiar to many people. Subsequently, his company is working to promote it like organizing an exhibition in Singapore some time ago aimed at the upper middle class.

“From here, we believe there will be many interested parties.

This is our way of segmenting the market. Still, of course, we want to attract as many tourists as possible,” added he.

So far, Tanjung Lesung is still dominated by local tourists. The others are expatriate tourists from Singapore, Malaysia and Korea. For Tanjung Lesung’s future development, Setiawan hoped that the government would support the improvement of infrastructure in the area.

“It is impossible to depend only on the investor without as-

sistance from government. We want parallel cooperation,” he affirmed.

BWJ and the government are maintaining intense communications in order to smoothen the implementation of the KEK in Tanjung Lesung, including permit processing and other investment-related issues.

“We hope this can be resolved soon so we will not miss investment opportunities,” he stated.

With ease in obtaining permits and government regulation on tax incentives and tax nonincentives, it is hoped that foreign investors will be more interested to invest in KEK Tanjung Lesung. “There are only a few KEKs in Indonesia, so the implementation of KEK development can be maximized,” he added.

Setiawan is optimistic in the prospects of KEK Tanjung Lesung.

“There is always opportunity and hope, and it is not impossible that one day Tanjung Lesung can become an international tourism destination. Bali is an island, while Tanjung Lesung is a resort. The latter has beautiful nature. Bali has the sea, but so does Tanjung Lesung; Bali has mountains and its strong cultural elements, but so does Tanjung Lesung. The government, with the help of the media, is expected to be more vigorous in pro-

moting this KEK. The question is, how fast can this process be done,” Setiawan said.

The development in Tanjung Lesung is conducted along with the empowerment of the people in the surrounding area, such as dancers and sculptors.

On domestic tourism, Setiawan acknowledged its growing number from year to year, especially with the increasing number of foreign airlines with direct flights to Indonesia. However, he said, there are still so many regions that have not yet perform well in terms of being helpful in, for example, getting visas to enter Indonesia.

“Here, there is still the impression of having complications in obtaining visa whereas in Singapore the immigration office is widely open,” he said.

Will the tourism sector be able to be a national economicforce?

BWJ’s Director answered that it is not impossible. Many other countries depend their income on tourism, but to be like them it needs to be thought the design and stsrategy as our current biggest source of income is natural resources.

“One day, we will run out of natural resources and others.

However, if we can manage our tourism effectively, we can still see to it that the people prosper,” said Setiawan.

www.thepresidentpost.com

December 2013 Vol. 2 No. 12

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Living

Air Pollution as a Heart Threat skift.com

Bit by bit over the past few decades, scientists have been building a new understanding of the ways that air pollution threatens human health.

Much of their attention has been focused on lung diseases, including cancers. With good reason, it turns out: just last month, the World Health Organization declared air pollution to be one of the planet’s most dangerous environmental carcinogens.

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ut cardiovascular disease is much more common than cancer. Sadly, there is now a pile of evidence, sometimes startling, that air pollution also plays a role in heart attacks and strokes. The new studies suggest that air pollution not only worsens cardiovascular disease — but can also cause it.

“We’ve known for about 20 years that we see increased risk of heart attack and stroke in association with increased levels of air pollution,” said Sara Adar, a professor of epidemiology at the University of Michigan. The most recent data show that “air pollution does more than just make you worse.”

Scientists like Dr. Adar have been studying fine particulates adrift in the cloud of unfriendly gases shrouding many of our communities. Measuring 2.5 micrometers (or microns) or less, these bits of material are so tiny that it would take about 30 of them to equal the diameter of a human hair. A series of studies has found that they penetrate deep into the lungs, embedding in tissue and setting off a cascade of inflammatory effects. Researchers believe the inflammation also spreads into the circulatory system, altering the way blood vessels function.

Although air pollution is a long-recognized and regulated health hazard, only gradually have researchers come to appreciate the threat of particulates. In 1989, C. Arden Pope

III, a professor of economics at Brigham Young University, published a paper based on the temporary shutdown of a nearby steel mill, showing a linear relationship between emissions and hospitalizations. He traced the illnesses to particulates in the air.

Dr. Pope originally had focused on air pollution’s effects on the lungs, but over the years he kept turning up increases in cardiovascular disease. “By 2002, I’d given up on the idea that this was just some anomaly in the study design,” he recalled in an interview. Eventually he identified the culprit: fine particles, far smaller than those tracked in his original steel mill study. “The deeper you dive into the data, the more clearly you see the effect on cardiovascular disease,” Dr. Pope said.

Dr. Adar and her colleagues have been tracking the damage at the microscopic level in the Multi-Ethnic Study of Atherosclerosis and Air Pollution (MESA Air), which has followed more than 5,000 people in six states for more than a decade.

It is funded primarily by the National Institutes of Health and the Environmental Protection Agency.

Researchers working with the project have contributed to an increasingly precise understanding of risks associated with fine particles that float in polluted air. Dr. Adar and her colleagues have shown, for instance, that increased expo-

There is now a pile of evidence, sometimes startling, that air pollution also plays a role in heart attacks and strokes. The new studies suggest that air pollution not only worsens cardiovascular disease — but can also cause it.

sure to pollutants, after other factors are factored out, can be directly linked to narrowing of blood vessels and to a steady thickening of artery walls.

Their most recent study, published this year in PLoS Medicine, described a near-linear relationship: as air pollution levels dropped, the thickening slowed.

When exposure to air pollutants increased, signs of damage increased.

The MESA Air study also has reinforced a sense that vehicle exhaust may be unusually harmful. Researchers in the United States and many other countries have linked traffic pollution to heart rate variabil-

ity in a range of people – from vehicle drivers to bicyclists traveling congested roadways. A study published this year in Environmental Health found evidence of “acute changes” in heartbeats in people, aged 22 to 56, driving in Mexico City traffic. Another recent study, of bicyclists in Ottawa, found that their heart rhythms appeared to be altered for hours after they had returned home in ways unrelated to exertion.

“There’s increasing evidence that there’s something about traffic-related pollution in particular,” said Dr. Joel D. Kaufman, an epidemiologist at the University of Washington in Seattle.

Vehicle emissions are thought to include an unusually high proportion of very small, or ultrafine, particles, allowing them to penetrate deeper into the body. Researchers say there is also some evidence that the shape of these particles gives them an unusually high surface area, which permits other contaminants to stick onto them. As a result, they may actually concentrate toxic compounds in polluted air.

“The evidence is pretty overwhelming that fine particles do harm,” said Dr. Russell V. Luepker, a cardiologist and epidemiologist at the University of Minnesota School of Public Health, a co-author of two scientific re-

ports on air pollution for the American Heart Association.

But, he added, health choices — such as poor diet, smoking and lack of exercise — and conditions such as hypertension still pose greater risks. “If we got rid of air pollution, heart disease would not disappear,” Dr. Luepker said.

Researchers studying the health effects of air pollution are starting to look at ways that their findings can be used for greater protection. Dr. Adar and her colleagues are looking for ways to better identify and control the most dangerous vehicle emissions, while other scientists are pondering everything from

improved air purifiers to particle-absorbing barriers. But one of the most effective responses is environmental regulation.

Several decades of clean air regulations in the United States have had lifesaving effects. A study published this year in the Journal of the American Medical Association estimated that there has been a 35 percent drop in deaths and disabilities related to air pollution, including cardiovascular diseases, in the United States since 1990.

“Our public policy efforts to reduce air pollution are one of the most effective medical interventions in the last 20 to 30 years,” Dr. Pope said.

NYT

suspendyourgarage.com

Hopeful Glimmers in Long War on Cancer This week’s Retro Report video examines the “war on cancer” — a federal research initiative authorized by President Richard M. Nixon in 1971. Many anticipated quick results, in part because of the public relations campaign, complete with ads suggesting we could cure cancer by the bicentennial, that successfully pushed Mr. Nixon into making the commitment.

Since then, the United States government has spent over $100 billion on research.

It was 2008 and a woman my editor and I knew had just died of cancer. One of the last things she said to my editor was a bitter lament: “What ever happened to the” [expletive] “war on cancer?”

Well, I told my editor, it was clear we hadn’t won that war.

But the question was why. Why was progress so slow? Was it that cancer is a difficult disease or was it that other impediments got in the way? I thought it was probably that cancer was hard to fight. But it turned out that was only part of the problem.

Much money was being spent, but not always wisely, medical experts said.

There were federal grants ostensibly about cancer that were only tangentially related. It reminded me of my days as a molecular biology graduate student. A friend was studying the expression of genes in bacteria that were involved in lactose metabolism. He got a grant from the arthritis institute of the National Institutes of Health. I asked him how he ever accomplished that and he explained that if you write your proposal correctly you can make bacteria gene expres-

sion sound relevant to almost anything.

There also was money squandered on clinical trials that were so unimaginative and so uninteresting that they dwindled away, unable to recruit enough patients to come to any conclusions.

There were national campaigns to get people screened for cancers, even though many types of cancer screening have not been found to reduce death rates. Screening also leads doctors to find and aggressively treat cancers that would never have grown or spread or caused a problem if they had never been found and had been left alone.

The only screening tests that do reduce death rates, studies have found, are Pap tests for cervical cancer, any of the three screening tests for colon cancer — colonoscopy, fecal occult blood tests or sigmoidoscopy — and a lung cancer screening test for smokers.

The much touted recent drops in some cancer rates were mostly attributable not to cancer breakthroughs but to a decline in smoking that began decades ago

— propelled, in part, by federal antismoking campaigns that began in the 1960s.

Another drop in cancer rates was a consequence of something totally unrelated to the war on cancer. In 2002, a large federal study, the Women’s Health Initiative, stopped early because it was finding that the treatment being tested, hormone therapy for menopausal women, had harms outweighing any benefit. Women immediately stopped taking the drugs. It turned out that one of the harmful effects was a slightly increased risk of breast cancer. When women stopped taking the hormones, an estrogen and a progestin, the breast cancer rate finally fell — the first time that had happened — by almost the exact amount predicted if women stopped taking the pills.

So it looked like progress against cancer had not come from the “war” so much as from other events. And it looked like cancer was just about as formidable as ever.

But that was in 2008. Now scientists seem to be entering a new era of optimism.

It began with insights from the much ballyhooed and then much maligned Human Genome Project. The project, to determine the sequence of human DNA, at first used expensive and laborious methods but as it went on, scientists developed much cheaper and faster ways of sequencing.

With fast sequencing, the cancer institute sponsored large studies of cancer genomes, looking for mutations that seem to drive tumor growth. And drug compa-

nies looked on their own for critical cancer mutations that might make good targets for drugs.

But whether the war on cancer was more slogan or solution, most researchers believe cancer treatment, at least, is starting to change.

After decades of little progress, they now are starting to go beyond the old mainstays (chemotherapy, surgery and radiation) that have never been enough against this disease.

The results are dozens of drugs that attack various mutated genes in cancer cells. The drugs are just now starting to enter the market. A few of the older ones, like Herceptin and Gleevec, developed before the new sequencing methods evolved, have made previously untreatable cancers treatable. Gleevec has turned certain blood cancers from a lethal cancer into a manageable chronic disease. Herceptin has made a form of breast cancer with the worst prognosis into one that now has the best prognosis.

But the problem with the new targeted drugs is that just as bacteria grow resistant to antibiotics, so cancers almost inev-

itably grow resistant to a drug that attacks a crucial mutation.

The new targeted drugs can buy patients with metastatic cancer time, and, eventually, by combining drugs, scientists might be able to bar all cancers’ escape routes. But for now, the new drugs rarely are cures, and they also are incredibly expensive, usually costing well over $100,000.

On the horizon is yet another sort of treatment. It unleashes the immune system, allowing it to kill cancer cells. These drugs are only starting to be developed, but some patients have had astonishing responses. Companies and researchers are buoyant, though they are also mindful of previous failed drugs and are wary of overpromising.

One way to look at the era researchers say they are entering is to say that the war on cancer was the impetus. It spurred interest in the disease and as a result money flowed to basic research. Another way to look at it is to say basic research was the key and the war on cancer was incidental.

But whether the war on cancer was more slogan or solution, most researchers believe cancer treatment, at least, is starting to change. After decades of little progress, they now are starting to go beyond the old mainstays (chemotherapy, surgery and radiation) that have never been enough against this disease.

The biggest challenge, prevention, remains. And other than stopping smoking, nothing yet has been terribly promising. NYT

A new study reports that older adults who took lessons at a young age can process the sounds of speech faster than those who did not.

Long-Term Benefits of Music Lessons Childhood music lessons can sometimes leave painful memories, but they seem to carry benefits into adulthood. A new study reports that older adults who took lessons at a young age can process the sounds of speech faster than those who did not.

“It didn’t matter what instrument you played, it just mattered that you played,” said Nina Kraus, a neuroscientist at Northwestern University and an author of the study, which appears in The Journal of Neuroscience.

She and her collaborators looked at 44 healthy adults ages 55 to 76, measuring electrical activity in a region of the brain that processes sound.

They found that participants who had four to

14 years of musical training had faster responses to speech sounds than participants without any training — even though no one in the first group had played an instrument for about 40 years.

Dr. Kraus said the study underscored the need for a good musical education.

“Our general thinking about education is that it is for our children,” she said. “But in fact we are setting up our children for healthy aging based on what we are able to provide them with now.”

Other studies have suggested that lifelong musical training also has a positive effect on the brain, she added. Dr. Kraus herself plays the electric guitar, the piano and the drums — “not well but with great enthusiasm,” she said. NYT

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Health

3 Things to Know About the New Cholesterol Guidelines The American College of Cardiology and the American Heart Association just released new cholesterol guidelines to reduce atherosclerotic cardiovascular risk – and the change from the previous version, last updated in 2004, is profound. Here are three things you need to know about these new guidelines.

First, the guidelines have moved away from achieving target cholesterol levels. myw

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Americans have long been urged to focus on their laboratory numbers.

Many people are obsessive about checking their cholesterol

levels and pursuing even better numbers.

Doctors have been told to focus on these numbers and, in some cases, the quality of their care was assessed by the percentage of their patients with low cholesterol levels.

Those days are over. The new guidelines recognize that for pa-

When Doctors Share With Their Patients At our very first visit, I was overwhelmed by all of the issues my new patient faced. She was nearly 300 pounds and her diabetes was raging out of control.

She had asthma, but smoked to ease her anxiety. Her obesity severely limited her mobility, but the constant stress in her life led her to overeat.

She had been raised in a family faced with psychiatric, medical and social challenges, and now the cycle seemed to be replicating itself. Her three children all had emotional and educational needs that required intensive services.

She couldn’t figure out how to get a handle on her life, and as her new physician, I wasn’t sure how to get a handle on it either.

Should I work on her diabetes first? Her smoking? Her weight?

Her asthma? Her anxiety and stress? Her life seemed frighteningly out of control. On what could we connect, I wondered?

But then I stopped myself.

I remembered an article I’d read about how doctors often “self-disclose” to patients in an attempt to empathize: “My father also had lung cancer; I know how difficult it can be,” or “I also had knee surgery; I know how hard the recovery is.” But contrary to what might be expected, such self-disclosures often turned out not to be helpful in addressing patients’ concerns or building rapport. Patients sometimes interpreted them as disruptive.

In the middle of our visit, her cellphone rang. She glanced at the caller ID, then looked apologetically toward me. “It’s my son’s teacher,” she said. I told her to please take the call. As a parent of three school-age children, I well understood how hard it could be to reach a teacher, and how critical such calls were.

“I know my son missed two assignments,” she said into the phone, as I scrolled through her labs. “Sometimes he’s anxious after therapy session, so I have to give him time on the playground.”

She paused and listened to the teacher. “We keep a chart,” she said, “and he gets a check for each homework he finishes.”

When she hung up the phone, she apologized for the interruption. “Don’t worry,” I reassured.

“Teacher calls are important.” I was about to continue, to offer her some of our commonalities, thinking that common ground could offer us a good start on a working relationship.

But then I stopped myself. I remembered an article I’d read about how doctors often “selfdisclose” to patients in an attempt to empathize: “My father also had lung cancer; I know how difficult it can be,” or “I also had knee surgery; I know how hard the recovery is.” But contrary to what might be expected, such self-disclosures often turned out not to be helpful in addressing patients’ concerns or building rapport. Patients sometimes interpreted them as disruptive.

As she carried on the conversation, I found myself feeling more connected to her. I knew about the driving necessity of playground time. I knew about the charts and the checks required to keep children focused on their tasks. I knew the frenetic juggling required to keep up with three children and their schedules. I also knew the awkward sensation of explaining details of a life to a teacher, unsure if they will pass muster.

A week earlier, I had a visit with one of my long-term patients — a woman in her 60s who has been alone, and lonely, for as long as I’d known her.

At the end of our visit, she asked why there weren’t any new pictures of my children; the photo on my desk was about three years old by now.

“I never get around to printing any photos,” I said sheepishly.

“They just sit on my phone.”

She leaned toward the cellphone sitting on my desk, somewhat expectantly. I figured it would be O.K. to show her a quick photo, since we’d known each other for so many years at this point.

My patient gave a wistful smile when she saw the photo. “What a happy family you have,” she said. “Your husband looks like such a nice person. Your kids look so smart.” The plaintiveness in her voice was so palpable, and I suddenly realized what a mistake I’d made.

I’d thought it would strengthen our bond to share a bit of my life. But it turned out it may have had the opposite effect, as she projected onto my life some of the things that were missing in hers.

I quickly closed the photo, embarrassed at the awkward dynamics. There were likely some patients for whom the addition of the human element of the doctor’s life might be helpful, but this patient probably wasn’t one of them. I felt terrible that I might have done something detrimental.

And now as I sat with my new patient, a woman who in most ways was so vastly different from me, I wondered if sharing some of the communalities we did have would enhance our alliance, and give us a better chance at tackling her medical issues. After all, that was my ultimate goal.

In the end, I decided to keep quiet. I couldn’t be sure if such disclosure would offer solidarity, or inadvertently toss in a monkey wrench. Instead, I simply acknowledged how challenging the situation with her children must be. I offered my admiration for her efforts, and pointed out her successes.

She reddened slightly, but smiled. “Raising kids is harder than I’d ever imagined.”

“I know,” I said.

I wanted to say that I really did know, but I decided to leave it at that. NYT

tients who have exhausted lifestyle efforts and are considering drug therapy, the question is not whether a drug makes your lab tests better, but whether it lowers your risk of heart disease and stroke. Studies over the past several years have shown that improving your lab profile with drugs is not equivalent to lowering your heart risks. Drugs have thousands of effects on the body, and a drug’s effect on an individual lab test cannot necessarily predict its overall effect on you.

Importantly, the guidelines still state that cholesterol is important. But the point is that changing your cholesterol level with medications is now accompanied with the appreciation that other effects of the drugs may offset any benefit to reducing cholesterol.

There’s one exception to the numbers rule. People with very high levels of the harmful cholesterol known as LDL still need to worry about targets. The new guidelines set that LDL level at 190 milligrams per deciliter – but the principle is that if people have very high cholesterol levels, then their cardiovascular risk is so high that it is likely that treatment to reduce the levels would offset any risks of the drug treatment.

So, the new guidelines are saying: we should not be chasing the cholesterol levels alone. The “know your number” campaign is no longer consistent with the

guidelines, and the days of doctors adding additional medications to get you to some arbitrary cholesterol level should no longer occur.

Second, know your risk.

The guidelines are now focusing you on your overall risk of heart disease and stroke. They indicate that drug treatment is recommended for people with a high risk — and that more powerful treatments are best for those with the highest risk.

So what they are saying now is: know your risk of heart disease and stroke. They have published an online calculator to help you -– but more important is the general concept that drug treatment with effective medications (those proven to lower risk) should be used in people with the most to gain.

The guidelines do set thresholds for risk, but my view is that these recommendations should not be considered dictums to be followed without question. They say that if your 10-year risk of heart disease and stroke is 7.5 percent or higher, then you should be treated with drugs.

However, I believe that only you can determine what constitutes a high enough risk that it is worth it to you to be treated with drugs. Such a decision depends on how you feel about your risk

of heart disease and stroke and how you feel about taking drugs — and their risks and benefits.

Third, use medications proven to reduce risk.

The understanding that simply improving cholesterol lab tests may not reduce your risk for heart attack and stroke has focused attention on the choice of drug therapy. In the “treat to target” era, there was a sense that we could use any of the medications to lower LDL — and what was most important was the lab test.

However, there have been numerous studies showing that many popular drugs that may have improved lab tests for cholesterol failed to reduce risk.

These studies led the authors of the guidelines to make a distinction between proven and unproven medications.

Thus, the focus of the guidelines is on statins, the drug class with clear evidence that it can lower risk in many groups of patients. In fact, statins seem to lower risk regardless of your cholesterol levels. This fact has led many of us to think about statins as risk-reduction medications rather than just medications that modify cholesterol levels. Regardless, the evidence that statins lower risk is very clear.

So, the new guidelines are saying: we should not be chasing the cholesterol levels alone. The “know your number” campaign is no longer consistent with the guidelines, and the days of doctors adding additional medications to get you to some arbitrary cholesterol level should no longer occur.

So the guidelines now make clear that if you use drug therapy for higher risk, you should use statins. If you cannot tolerate one statin, you might want to try another statin, after consultation with your doctor. If you use another type of drug, then you should know whether that drug has been shown to reduce risk in contemporary studies.

Many popular drugs, like Zetia (ezetimibe), have not yet been proven to save lives.

Bottom line: The new guidelines are a marked departure from the era of chasing targets and being agnostic to the drugs you used. The new message is don’t chase targets, know your risk, and — if you need drug therapy — use statins. These principles should guide your discussions with your doctor. NYT

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December 2013 Vol. 2 No. 12

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Tanjung Lesung

Tanjung Lesung Offers High Returns To Investors, Heaven to Tourists Tanjung Lesung, an exclusive integrated tourism destination located in Pandeglang, Banten or 170 km from Jakarta, offers a unique attraction—not only beautiful sceneries but also a lucrative investment opportunity.

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ot far from Jakarta, about 3-4 hours by land to the west via the Jakarta–Merak toll road towards Pandeglang, you will find an exclusive world-class destination that can cater to all your holiday and investment needs. You no longer need to fly to Bali and buy expensive tickets to enjoy a luxurious holiday. Tanjung Lesung is ready to offer an unforgettable holiday that would make you feel as if you were in Nusa Dua, Bali, without having to spend extra money.

Tanjung Lesung, which has a coastal line of ± 13 Km long, is known as a tourism gate to one of the most popular volcano tourisms, Anak Krakatau, Ujung Kulon National Park, and the Baduy cultural tourism.

The nature in Tanjung Lesung is still original and untouched.

Here, you could easily find exotic white sandy beaches such as the Bodur and Cipenyu beaches that offer an incredible panoramic view and calm and clear bluish-greenish sea.

You could do all sorts of activities during your holiday here at Tanjung Lesung. At the Beach Club, you could enjoy snorkeling, diving, banana boat, and jet skiing. Tanjung Lesung’s un-

The nature in Tanjung Lesung is still original and untouched. Here, you could easily find exotic white sandy beaches such as the Bodur and Cipenyu beaches that offer an incredible panoramic view and calm and clear bluish-greenish sea.

ism Development (“BWJ”), a subsidiary of PT Jababeka Tbk, the owner and operator of the Tanjung Lesung area, recently launched a new villa type called Beranda Villa. It’s an exclusive accommodation with a luxurious design, the latest type from the Kalicaa Villa Estate.

Beranda Villa has more opened and spacious veranda that offers its occupants better comfort thus enabling them to better enjoy the natural environment of Tanjung Lesung. Such atmosphere is most suitable for a family vacation or for individuals who like outdoor activities. The facilities at Beranda Villa include a kitchen, gazebo and a private pool made of natural stones. Beranda Villa comes in two types, a 3-bedroom accommodation on a 420-square meter land and 209 square meters building and a 2-bedroom accommodation built on a 345-square meter land and 158 square meters building.

derwater beauty offers a wide diversity of fishes and coral reefs, making it a place that you must explore.

Tanjung Lesung is 1,500 hectares wide and there are various

At the launch of Beranda Villa at the end of October, Philip Lim, CEO of BWJ said: “With several development plans of the area on the table, Tanjung Lesung is the right investment location. Beranda Villa, our latest

types of accommodations available in the area such as Tanjung Lesung Beach Hotel, Blue Fish Hotel, Sailing Club, Green Coral Camping Ground, and Kalicaa Villa, an exclusive cluster villa

with private pools.

How is the investment opportunity in Tanjung Lesung lucrative? Tanjung Lesung is wide open for investment opportunities. PT Banten West Java Tour-

property product, is very suitable for families from the middle up social class as well as for investors”.

Setiawan Mardjuki, President Director of BWJ, added: “We are targeting the upper class segment which is individual investors from Jakarta and other cities. We have received quite a significant number of demands.

They are interested because these villas are located in the Tanjung Lesung Resort tourism area, which is private and exclusive and is managed professionally, and which also offers handsome investment returns and yields”.

Investors will receive a wide range of extra bonuses such as a two-year leasing guarantee with leasing income rate of 18%, 30 points to stay at Beranda Villa and free maintenance and utility charges (electricity and water) if they invest in Beranda Villa.

Not only that, investors are also offered light payment schemes and they can pay in installment by up to 24 times.

Tanjung Lesung is supported by a complete range of infra-

structure such as roads, electricity, internet, telephone, clean water and waste water treatment plant which is operated based on environmentally-friendly policies that are expected to support the area’s future growth.

BWJ is preparing to build a series of infrastructure and supporting facilities such as an airstrip which will accommodate chartered flights bound from Halim Perdana Kusuma to Tanjung Lesung. The airstrip is expected to be finished by the end of this year to provide tourists and investors with transportation alternatives and easier access to Tanjung Lesung. It is also planning to build other supporting facilities such as an 18-hole golf course, a marina for yachts, and a theme park.

Tanjung Lesung has since 2012 been rewarded with the Special Economic Zone (KEK) status, which offers both investors and tourists both fiscal and non-fiscal incentives. On top of that, the government’s efforts to improve infrastructure in the area will also add value to the tourism and investment attraction such as the development of the Serang-Timur Panimbang toll road and the South Banten International Airport.

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Travel

Awed by TERNATE There are several diving spots in Ternate such as at the Sulamadaha beach, Telaga Nita, Ternate’s port, the Residence bridge and Swering, a transplantation place for corals. The diving spots were very close to the heart of the city and the main roads, and they can all be accessed easily and each of them offering different sensations.

Text: Iqbal Alaik Photo: Adita, Nico, & Alaik

F

loridas is a popular diving spot in Ternate, North Maluku. The diving spot was named Floridas because it is located underneath a restaurant called Floridas. To reach the place, I had to take a motor boat from the Ternate port. In just about five minutes, I was able to see the restaurant which stood tall on a high cliff.

Upon arriving at the site, I immediately wore my diving suit.

However, I was a little bit distracted by a view in front of me.

The surface of the sea was filled with floating plastic trash, which reduced the beauty of the wide blue sea. The trash contaminated the diving spot because it was located very close to the heart of the city. It was such a shame because the view at the diving spot is so beautiful.

I was immediately greeted by a colorful coral wall. The mild current and the 25 meter visibility range made it possible for divers to enjoy the movements of fish tails that swam between the reefs. There were plenty of nudibranch or commonly known as sea slugs. The tiny animal has a very attractive shape and colors that makes it a great photo object. However, while diving one should be extra careful not to damage the corals.

madaha beach, Telaga Nita, Ternate’s port, the Residence bridge and Swering, a transplantation place for corals. The diving spots were very close to the heart of the city and the main roads, and they can all be accessed easily and each of them offering different sensations.

Ternate is also known for its historical tourism. There are several forts from the Portuguese and Dutch colonization at the city which is located at the foot of the Gamalama Mountain. One of them is the Tolukko fort. This fort was built in 1540 by a Portuguese commander named Fransisco Serao, for defense in his efforts to take control over cloves and herbs and spices. Although the fort has been around for hundreds of years, it is still strong and well-maintained. The front side of the fort faces the Gamalama Mountain, while from the opposite side we can enjoy the beautiful views of the sea and the Tidore Mountain which can be seen from a distance. It was a perfect combination of harmony, beauty and history. Now, theTolukko fort has become a tourism site for history and one of the most favorite site to take pre-wedding pictures.

My most special moment was when I saw a flathead crocodile fish, a fish with the camouflage ability to adapt with its environment similar to a chameleon. I almost couldn’t tell the difference between the fish and the corals around it. It was able to make a perfect camouflage. Not only that, I also got a glimpse of a black tip shark and a hawksbill sea turtle but it was too bad that I didn’t get a chance to take pictures of them. It was unbelievable that a diving spot which was very close to the heart of the city was able to offer such an incredibly beautiful scene.

There are several diving spots in Ternate such as at the Sula-

Ternate is also known for its historical tourism. There are several forts from the Portuguese and Dutch colonization at the city which is located at the foot of the Gamalama Mountain. One of them is the Tolukko fort. This fort was built in 1540 by a Portuguese commander named Fransisco Serao, for defense in his efforts to take control over cloves and herbs and spices.

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December 2013 Vol. 2 No. 12

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Golf

The Calmness of Golfing at Merapi Golf Club House golfwonderfulindonesia.com

Merapi Golf is located in the valley of Mount Merapi, which is the most active volcano in Indonesia. Its calm and peaceful environment and stunning scenery make golfers enjoy the game—they certainly will not miss the exciting field, a place for golf lovers to play without being bothered by heat and pollution.

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f you love playing golf, you definitely should be familiar with the Merapi Golf Club House. Yes, the Merapi golf course has several advantages in addition to the cool air— it also has scenic beauty: a view of the Merapi mountain.

It has 18 holes covered in 6,370 square meters, par 72 and is located 30 minutes away from the ancient city of Yogya­karta.

The Merapi golf course’s design is truly a dazzling masterpiece, which was created by the master of golf course Thomson, Woverride & Perret.

Nestled in the village of Cangkringan, deep in the countryside of Java, Merapi Golf provides im-

exotika-lands.com

exotika-lands.com

exotika-lands.com

pressive calmness far from the pollution of the city.

The blend of natural beauty and freshness of mountain weather and challenging hilly landscape with volcanic rocks makes this golf course one of the most attractive courses in Central Java. Each hole is designed and carefully placed with its own difficulties, serving a great test for clubbing.

Merapi Golf is located in the

valley of Mount Merapi, which is the most active volcano in Indonesia. Its calm and peaceful environment and stunning scenery make golfers enjoy the game— they certainly will not miss the exciting field, a place for golf lovers to play without being bothered by heat and pollution.

In addition to the golf course you can go to Kaliurang, which is a family vacation spot to enjoy the coolness and beauty of nature.

The blend of natural beauty and freshness of mountain weather and challenging hilly landscape with volcanic rocks makes this golf course one of the most attractive courses in Central Java.

R A E Y W T E A N M R O F N W E O I N S I V W E N

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