The President Post November 2013 by The President Post

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November 2013 Vol. 2 No. 11 www.thepresidentpost.com

INTENATIONAL

SPECIAL REPORT

HEALTH

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Indonesia, EU Signed Agreement to Fight Illegal Timber Trading

IDR 20,000

IPC: Striving To Become a World-class Port Operator

Walking Can Reach Health Goals

R.J. Lino CEO of IPC

BKPM: Realized Investments Reach New Record at Rp 100.5t JAKARTA (TPP) – Chief of the Investment Coordinating Board (BKPM), Mahendra Siregar, said that realization of investment projects in the third quarter (July-September) of 2013 reached Rp 100.5 trillion, the first time ever that it exceeded Rp 100 trillion. This means an increase of 22.9% over with the achievements of the same period in 2012 (Rp 81.8 trillion), he added. lihat videonya di: www.thepresidenttv.com

According to Chief of the Investment Coordinating Board (BKPM) Mahendra Siregar, 55% of the total investment is from new investors. The remaining 45% comes from existing investments to increase production capacity.

he achievement in the third quarter 2013 also rose, by 0.9%, compared to the achievement in the second quarter of 2013 at Rp 99.8 trillion. Mahendra disclosed the figures at the business forum themed “Foreign Investment to Indonesia and Its Task Ahead” held at the Financial Club, Jakarta, Tuesday (29/10). Mahendra also said that the interesting part of the increase in investment in the third quarter is the rise in domestic investments, which reached Rp 33.5 trillion, up from Rp 25.2 trillion over the same period in 2012. As for domestic investment in the third quarter, it is nearly half of the total foreign direct investment at Rp 67 trillion. Mahendra added that 55% of the total investment is from new investors. The remaining 45% comes from existing investments to increase production capacity. In terms of the so-called “economic corridors”, in the period of January-September 2013 the realization of domestic and highest foreign investments are in Java,

followed by Kalimantan, Sumatra, Bali and Nusa Tenggara, Sulawesi, Maluku and Papua. The next largest foreign investments are in Sumatra, Maluku and Papua, Kalimantan, Sulawesi, Bali and Nusa Tenggara. Mahendra also explained that the government has launched packages of policies designed to improve the ease of doing business in Indonesia. The eight packages of policies cover: starting the business, electricity connection, tax payment and insurance premium, settlement of minor civil cases, settlement of bankruptcy cases, and the recording of land and building rights. There are also construction of building permits and the ease of obtaining credit. Previously, Mahendra said the government is also implementing 17 action plans as derivatives of eight packages, to be implemented gradually with different deadlines until February 2014. These plans aim to facilitate the establishment of companies in Indonesia. The series of action plans include suppression of basic capital requirement and paid-in capital, electricity connection procedures, and online tax filing system. Separately, Vice President Bo-

ADB Calls on Government to Maintain Market Confidence with Good Policies presidenri.go.id/Abror

President of the Asian Development Bank (ADB) Takehiko Nakao stated that if the Indonesian government can continue to reassure the market with good financial sector policies, including foreign investment and infrastructure policies, Indonesia will have huge growth. Takehiko earlier met with President Susilo Bambang Yudhoyono. On the occasion, the Government of Indonesia and ADB agreed to strengthen and expand cooperation in a number of development sectors. Presidential Special Staff of the Economic and Development Firmanzah, who accompanied the President during the meeting, said that the ADB has become a partner of Indonesia for a long period of time. Both sides want to make the cooperation stronger, he said. Firmanzah explained that in the meeting, the President said that ADB is an important partner for Indonesia. “So far, the cooperation is in energy, water, infrastructure, and education. In the future, the President wants the partnership to be expanded and and more effective,” he said. Takehiko said Indonesia is an important country that should be listened by institutions such as the ADB. “Indonesia’s voice is important as it is the representative of emerging economic powers,” he said.

ediono said he hopes this policy packages can be implemented by February 2014 so that all Indonesians who wish to start a business can enjoy the process faster and easier. “I ask ministers, heads of institutions and government agencies and all levels of local governments to be committed in supporting this policy packages,” Boediono said, as quoted from the official Setkab website, Friday (25/10). According to Boediono, the world economic situation is still uncertain and that the ease of starting a business is one of the ways out to maintain the momentum of economic growth. The more easily people run businesses, the sooner the economy can move, he said. He said that since it entails a variety of sectors, these improvement efforts also involve coordination with official bodies such as the Supreme Court and Bank Indonesia. SOEs responsible for providing telephones, electricity, and drinking water are also directly involved in the action plans. He went on to say that the involvement of local governments in providing business licenses is very important.

Besides the ease of business policy package, Mahendra said that the government will continue to address the challenges of the economic structure like labor protests that also affect Indonesia’s investment attractiveness. Later, the government will provide health care to industries and also improve the employment insurance scheme.

The government has launched packages of policies designed to improve the ease of doing business in Indonesia. The eight packages of policies cover: starting the business, electricity connection, tax payment and insurance premium, settlement of minor civil cases, settlement of bankruptcy cases, and the recording of land and building rights. There are also construction of building permits and the ease of obtaining credit.

Quotes and Thoughts Jusuf Kalla, former Vice President

To combat corruption, we have to fix the system. Then there must be strict law enforcement. Indonesia needs good examples from leaders because nowadays corruption has reached the highest level and is disturbing the public. We also need a transparent system and public awareness to unravel social and economic disparities. Basuki Tjahaja Purnama, Vice Governor of DKI Jakarta

I also want to have a yacht, a horse, a ranch. But I must get them the right way.

Dahlan Iskan, State Enterprises Minister

President of the Asian Development Bank (ADB) Takehiko Nakao had a meeting with President Susilo Bambang Yudhoyono. The Government of Indonesia and ADB agreed to strengthen and expand cooperation in a number of development sectors. Indonesia is also important because of its position as a member of the G-20 (group of 20 largest economies) and the Chairman of the Forum of Asia-Pacific Economic Cooperation (APEC). Indonesia also has a very big role in ASEAN. ADB also stated its willingness to provide aid in time of a

crisis if the Government of Indonesia so requires. The aid can be given in the form of a standby loan or trade financing. “ADB is ready to support [the Indonesian government] in these forms,” said Takehiko. ADB has allocated $500 million in the form of a standby loan to Indonesia. Total current

standby fund for Indonesia is $5 billion. However, Takehiko said the standby fund would not be capable to reduce the turbulence of financial markets without the support of other policies. “The government must send assertive signals on Indonesia’s economic growth potential and continue

with strong economic policies,” he said. ADB is a multilateral financial development institution that aims to reduce poverty in the Asia and Pacific region. The bank was founded in 1966 and is based in Manila, the Philippines and has 63 countries as members.

Eradicating corruption should start from our own immediate environment. When I was appoimted president director of PLN, I asked to be given the authority to appoint directors. In modern management good people will choose good people as co-workers. Vice versa, bad people will choose bad people to cover the frauds they commit.

November 2013 Vol. 2 No. 11

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Opinion

Putting a Cap on Coal Exports KONTAN/Muradi

It’s not surprising to see the business sector opting to export coal because they can sell them at a higher price compared if selling them at home. It’s now up to the government to evaluate the 2012 domestic sales and exports as a reference for a new production regulation which will be introduced in 2014.

production regulation which will be introduced in 2014.

By Siraj El Munir Bustami

ata from the Energy and Mineral Resources Ministry’s Directorate General of Mineral and Coal showed that the country’s coal production over the past years is as follow: Coal production in 2011 stood at 353 million tons and it increased by 9.3% in 2012 to 386 million tons, of which 75% or 251 million tons were produced under the Coal Contracts of Work (PKP2B) scheme while the remaining 25% or 135 million tons were produced by holders of mining business permits (IUP). The total volume of coal exported reached 73% or 304 million tons and only 27% or 82 million tons were allocated for domestic needs. Coal exports are allowed under Ministerial Decree No. 1991 K/30/MEM on domestic coal needs and minimum percentage allocation of coal for domestic sales in 2012, which stated that: • The domestic needs (end user domestic) for coal was estimated at 82.07 million tons. • Coal mining companies are required to meet the minimum percentage of 24.72% on coal production for domestic sales out of an estimated 323 million tons production in 2012 which are produced by: • 40 mining companies un-

That’s why the government, through minister Jero Wacik, issued Energy and Mineral Resources Ministerial Decree No. 2934 K/30/MEM/2012 on October 8, 2012, which regulated the domestic coal needs and minimum percentage allocation of coal for domestic sales in2013. However, the new regulation was more concerning compared to Energy and Mineral Resources Ministerial Decree No. 1991 K/30/MEM/2011 which stated bigger production estimation at 366.042.287 tons in 2013, up from 332 million tons in 2012, but declined in terms of domestic sales allocation from 24.72% or 82.07 million tons to 20.30% or 74.32 million tons.

der the PKP2B scheme. • 1 state enterprise • 22 IUP holders The data above raised three basic questions: • Is it true that the government only needed to secure 24.72% of the total coal production for domestic sales in 2012? Did it not need more coal that the government decided to export more than 70% of its coal production? Because in re-

ality, many people in Indonesia still don’t have access to electricity, and industries were still short on coal to fuel production, for instance cement, textile, fertilizer, pulp and other industries. • Even if the domestic needs were in fact only 82.07 million tons in 2012, is it wise to export as much as 304 million tonsof coal in 2012? Shouldn’t we just keep it or save them for future needs

since we all know that coal is a non-renewable fossil energy? Facts showed that many countries were reserving their energy in order to sustain their energy supplies or as part of their countries’ strategies to survive. • But what did the Indonesian people get from exporting coal aside from environmental and forest damages, which stemmed from coal mining exploration?

We, especially the government, should ponder on those questions above, so that we don’t run out of coal supplies because the coal belongs to the people of Indonesia which should have been prospered. It’s not surprising to see the business sector opting to export coal because they can sell them at a higher price compared if selling them at home. It’s now up to the government to evaluate the 2012 domestic sales and exports as a reference for a new

Energy and Mineral Resources Ministerial Decree No. 2934 K/30/MEM/2012 on domestic needs and minimum domestic coal sales percentage in 2013 stated that: • Domestic coal needs (end user domestic) is estimated at 74.32 million tons. • Coal mining companies must at least allocate 20.30% of coal for domestic sales out of an estimated 366.042.287 tons production in 2013, produced by: a. 45 companies under the PKP2B scheme. b. 1 state enterprise c. 28 IUP holders

The Syrian Crisis The final result of the transfer of Syrian chemical weapons would be the recognition that all of it is declared. If there remain any doubts about it, this will lead to endless debates, and again threats would be raised.

By Hendra Manurung

ussian Foreign Minister Sergei Lavrov and U.S. Secretary of State John recently held three days of talks on Syria in Geneva. U.S. President Barack Obama, speaking to the nation, concluded that the talks had madee progress and that diplomatic consultations should continue. Lavrov described the talks as “excellent.” It was agreed that Damascus’ chemical weapons would be destroyed “as quickly as possible,” documents would be “written professionally,” and unnecessary rhetoric would remain on the side. Kerry even named a specific target of time. “Our goal is to finish the work by mid-2014,” he. “The equipment, necessary for the production of chemical weapons, has to be de-

stroyed by November.” However, to do so will not be easy. There is no accurate information about where and in what form these stored weapons are; an investigation is needed. However, this means time. Another problem is that Syria has agreed to give up its chemical weapons under international supervision, but who will perform this and how: Russia, the U.S., NATO, the Arab countries, or China? Furthermore is the international community, which is split between different and often opposite attitudes toward the civil and religious war in Syria. There is more to follow. Suppose that all parties agree. This would require quite some time. The Syrian chemical weapons would be taken under international control. In order to destroy it, it would be necessary to build a production base. It would be al-

most impossible to drown the weapons in the ocean, to burn them, or transport them somewhere where there are resources and experience in the utilization of these chemicals. It is very dangerous and in a time of war, madness. According to the expert at the Russian Green Cross and member of the International Scientific Advisory Board on the Chemical Weapons Convention, Alexander Gorbovsky, the first thing that Syria has to do after it agrees to transfer its chemical weapons to international forces is sign the Convention on the Prohibition of Chemical Weapons, according to the existing procedure to transfer all chemical warfare agents under the control of Organization of the Prohibition of Chemical Weapons (OPCW). This organization would take responsibility for their safety and recycling in the future.

According to this writer, the final result of the transfer of Syrian chemical weapons would be the recognition that all of it is declared. If there remain any doubts about it, this will lead to endless debates, and again threats would be raised. The process will be tedious. But, if this process really stops mass murder on both sides, then glory to God. Perhaps this will be the first time when chemical weapons played a positive role in the suspension of military conflict. The expert especially stressed that all work must be carried out under the auspices of the OPCW. Today, there is no other mechanism; in the near future it will not be created. The inspectors of OPCW can inspect almost any military facility while declaring that they suspect chemical weapons are stored there. And you have to prove that there are

no such weapons. There is another aspect in the agreement between Russia and the U.S. on Syria’s chemical disarmament. This is setting a precedent, by which experience in Damascus could be transferred to the other “hard-headed capitals.” The script, as predicted by some international experts, may be as follows. First, in a state where there is a weapon of mass destruction, either chemical or nuclear, chaos is created by external or internal opposition forces, which then leads to civil war. Later a coalition is formed, which is ready, under the pretext of saving the nation from a dictator, to conduct a humanitarian military operation, in order to liberate the country from its stockpiles of weapons of mass destruction and overthrow the hated regime. Yet there is Iran, which is sus-

pected of developing a nuclear weapon. There is also Pakistan, where terrorists from al-Qaeda are getting closer and closer to the creation of nuclear weapons. There is the issue of North Korea, with its work on the creation of nuclear-missile weapons and, according to some estimates, stocks of chemical warfare agents. Pyongyang is one of the few countries that have not signed the Convention on the Prohibition of Chemical Weapons and their Destruction. Hopefully, the Syrian precedent may provide a greater perspective. The writer 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, Russian Federation.

ENGLISH EDITION

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November 2013 Vol. 2 No. 11

International

Indonesia, EU Signed Agreement to Fight Illegal Timber Trading eu2013.lt

Indonesia is the first Asian country and the largest timber exporter to enter into such an agreement, which aims to ensure that all Indonesian timber entering the EU market is produced legally and has passed all legal verification channels with the EU.

ndonesia and the European Union (EU) finally signed the Forest Law Enforcement, Governance and Trade - Voluntary Partnership Agreement (FLEGT-VPA) following six years of negotiations involving government officials, civil society, and the private sector Indonesia is the first Asian country and the largest timber exporter to enter into such an agreement, which aims to ensure that all Indonesian timber entering the EU market is produced legally and has passed all legal verification channels with the EU. Four African countries--Cameroon, the Republic of Congo, the Central African Republic, and Ghana---have already signed similar agreements with the EU. The pact is expected to help fight the trade in illegal timber, a driver of environmentally damaging deforestation in the Asian country, which has the world`s third-largest forest coverage after Brazil and the Congo. The Indonesia-EU FLEGT-VPA was signed by Forestry Minister Zulkifli Hasan; European Commissioner for the Environment JanezPotocnik; and Environmental Affairs Minister Valentinas Mazuronis, representing the Lithuanian presidency of the EU Council of Ministers, in Brussels, Belgium, on Sept. 30, 2013. The deal, which covers a licensing system related to timber exported by Indonesia to the 28 EU member nations based on

The Indonesia-EU FLEGT-VPA was signed by Forestry Minister Zulkifli Hasan (left); European Commissioner for the Environment Janez Potocnik (right); and Environmental Affairs Minister Valentinas Mazuronis, representing the Lithuanian presidency of the EU Council of Ministers, in Brussels, Belgium, on Sept. 30, 2013.

the Timber Legality Verification System, was hailed by parties engaged in environmental preservation as well as the forestry industry. Hoping that the agreement will be implemented smoothly and successfully, EU President Mazuronis said the signing of the agreement had marked a new and significant chapter in the relationship between Indonesia and the EU. For Minister Zulkifli Hasan, the agreement is a breakthrough and has signaled strategic cooperation between producing and consuming countries, particularly between Indonesia and the EU. “This agreement demonstrates that both parties do not tolerate illegal logging or an illegal timber trade. It also reflects our mutual commitment to timber trade that is guaranteed by legal certification,” the minister added.

Following the signing of the agreement, Indonesia and the EU will begin the ratification process for its implementation. Indonesian Ambassador to Belgium and the EU Arif Havaz Oegroseno hailed the signing of the agreement, which has taken seven years. He hopes the agreement will be ratified by April 2014. Indonesia`s timber must comply with EU Timber Regulation No. 995/2010, which bans illegal timber products from entering the EU`s markets, once the agreement is fully implemented. Indonesia is Asia`s leading exporter of timber to Europe, with Germany, Britain, the Netherlands, Belgium, France, Spain, and Italy as its main destinations. The EU imported $1.2 billion worth of timber and paper from Indonesia in 2010, about 15 percent of the country`s total exports in the forestry sector.

UNCTAD to Provide Real Contribution on Global Development The United Nations Conference on Trade and Development (UNCTAD) can provide adequate and relevant contribution to the process of preparing global development agenda beyond 2015. This was stated by Indonesian Permanent Representative to the UN, WTO and other International Organizations in Geneva, Ambassador Triyono Wibowo in his capacity as the President of UNCTAD’s Trade and Development Board, in his report in the 68th hearing of Committee II of UN General Assembly, in New York (24/10). In a meeting chaired by the Chairman of Committee II, Senegalese Permanent Representative to the United Nations in New York, Ambassador Abdu Salam Dialloand attended by almost all member countries of the UN, Triyono explained some of the global issues that would be of concern during his UNCTAD presidency. Triyono emphasized several issues, such as follow-ups to international conferences specifically related to the process of preparing global development agenda beyond 2015, the investment in relation to the Global Value Chains, the trend evolution of the international trading

UNCTAD member countries want the issue of trade to be a special purpose issue in the global development agenda beyond 2015. Through this special purpose, international trade is expected to be a catalyst for poverty eradication. system, as well as UNCTAD assistance to the Palestinian people. All of these issues have been discussed in the 60th Trade Development Board Meeting in Geneva, from September 16 to 27, 2013. “UNCTAD will continue to do its best in the discussion of development issues through critical and constructive evaluation of the process and the achievement of the Millennium Development Goals (MDGs), and to identify any indicators that can be used in setting the global development agenda beyond 2015,” asserted Triyono.

Related to investment issues, Triyono explained that the UNCTAD has published World Investment Report 2013 which extensively discusses the role of Global Value Chains (GVCs) in development. “The creation of relevant policies and specificity with regard to the situation of each developing country is an important thing for GVCs to be optimally efficient,”said Triyono firmly. Furthermore, Triyono also said that UNCTAD member countries want the issue of trade to be a special purpose issue in the global development agenda beyond 2015. Through this special purpose, international trade is expected to be a catalyst for poverty eradication. “To that end, UNCTAD proposed that in the global development agenda issues related to international trade, many existing quantitative indicators be coupled with qualitative indicators,” said Triyono. At the end of the report, Ambassador Triyono hoped that Committee II of the 68th UN General Assembly Meeting can approve and ratify Peru’s bid to host UNCTAD Conference XIV in 2016.

South Kalimantan Entrepreneurs Eye Cooperation with Czech Republic, Bulgaria South Kalimantan entrepreneurs conveyed their readiness to explore cooperation with Czech Republic and Bulgaria as well to penetrate non-traditional markets of Central and Eastern Europe. This was raised in the “Seminar on the Potential of South Kalimantan Province; Economic and Market Opportunities of Non-Traditional Countries of Central and Eastern Europe” at Mercure, Banjarmasin (24/10). Director of the Central and Eastern European Affairs Wahyu Hersetiati Priyanto expressed the importance of Central and Eastern Europe to Indonesia as an alternative market. Sluggish EU market due to the economic crisis has made the Central and Eastern European market prospective for Indonesian products. “With a population of around 350 million people and an average per capita income of $15,000, Central and Eastern European region has a great potential to be taken seriously,” he said. According to him, the fact that several former Warsaw Pact countries and Baltic States have joined the EU structures, including the Czech Republic and Bulgaria, can be used as an entry point as well as a stepping stone to the EU market. On the other hand, the

With a population of around 350 million people and an average per capita income of $15,000, Central and Eastern European region has a great potential to be taken seriously.” economic impact of Central and Eastern European countries and their excellence in the field of technology with competitive prices have made them interesting in their own right. Meanwhile, Indonesia’s trade relations with in countries in Central and Eastern Europe has started to show an encouraging trend. “Within the last 5 years, Indonesia’s bilateral trade with countries in Central and Eastern Europe region has showed an increase of more than doubled from $2.5 billion in 2007 to $6.3 billion in 2012,” explained Wahyu. The Ministry of Foreign Affairs hopes to bridge the government and local businessmen with foreign partners as well as helps local entrepreneurs penetrate nontraditional markets of Central and Eastern Europe.

November 2013 Vol. 2 No. 11

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ASEAN Review

What To Do With The Populace? Do you know that certain countries actually do encourage their citizens to breed? These countries are worried that their very low birth rates will not only cause economic stagnation, but it will also drive their people to extinction in the long run. Our neighbour Singapore is one such country. By Isyana Arslan

ith The Philippines’ D a n i c a May Camacho being declared the world’s 7,000,000,000th member of the population in October 2011, we have been reminded that the world is not only getting older, it is also getting more crowded. In addition to that, we have heard about countries trying to put quotas on the number of immigrants, as well as those trying to run family planning programs. However, do you know that certain countries actually do encourage their citizens to breed? These countries are worried that their very low birth rates will not only cause economic stagnation, but it will also drive their people to extinction in the long run. Our neighbour Singapore is one such country. Since 1988, Singapore has taken a variety of measures to encourage its people to start families (or “help deliver Singapore’s future”, as it is officially termed.) These measures include tempting them with incentives for having more than two children, educating the masses about the importance of reproduction through leaflets of twisted fairytales designed by The Singaporean Fairytale, to

the government-supported Singapore Dating Guidebook which offers advice such as, “Basics of a very real man: he’s a provider, protector and leader.” A lot of factors have contributed to Singapore’s next-to-zero population growth, one of which is its education system which puts high emphasis on grades. This education system has given birth to a generation who believes that only after the 5C’s (cash, condominium, car, coun-

The lack of sex education and the unreformed law of marriage, which allows girls to get married (or in many cases, to be married off) starting the age of 16, were the main reasons why Indonesia’s family planning program failed. What this entails is that youth, especially girls, are not given the opportunity to develop to their full potential.” Nafsiah Mboi Minister of Health

try club and credit card) are achieved, one may think about starting a family. This is also the very generation that has helped deliver the city state’s economic boom. What a stark contrast with Indonesia, with its family planning program a failure as reported as recently as April 2013, with Minister of Health Nafsiah Mboi stating that nowadays girls as young as 15 years old are being married off due to unplanned pregnancy. Mrs. Mboi stated that lack of sex education and the unreformed law of marriage, which allows girls to get married (or in many cases, to be married off) starting the age of 16, were the main reasons why Indonesia’s family planning program failed. What this entails is that youth, especially girls, are not given the opportunity to develop to their full potential. If our birth control pills and lectures on the importance of family planning have failed to reduce the number of population in Indonesia, what measures do you think the Indonesian government should take to control population growth? Should the government reward us with incentives for having only one child? Should they issue a policy that housing complexes be prioritized for one-child families and singles? Or should they take a creative route that appeal to the young a la Singapore’s Fairytales?

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November 2013 Vol. 2 No. 11

Law & Regulation

Legal Accountability of Hidden Defects in Goods Sales and purchase transactions in Indonesia are regulated under the Civil Code (KUHPdt). Article 1474 of KUHPdt stated that in a sales and purchase transaction, a seller has two responsibilities, which are to hand over the item and to take the responsibility for the damages found in the item. The responsibility here is to ensure that the handover of the item is uninterrupted and that there are no hidden defects in the item as stipulated in Article 1491 of KUHPdt. By Paulus Khierawan

ales and purchases are common activities carried out by any person, either in small or large scale. However, not all transactions are carried out properly. Some sellers try to cheat by selling damaged goods to reap as big profits as possible. In general, damages in goods can be interpreted as hidden defects that were not known during the transaction, because if they were made known, they could have canceled the transaction or reduced the price. Such incidents often occured, however, for transactions in small scale, buyers usually just wouldn’t go through the hassles and accept the goods despite the

hidden defects. Such attitude is taken probably because the amount of money they would get as compensation was not worth the efforts they put in to file for damages. However, different circumstances would emerge for large-scale transactions which involve fairly big amounts of money such as vehicles, furniture, and more when buyers don’t always find the goods that they purchased in good quality. The questions are what are the buyers’ rights and the sellers’ obligations when hidden de-

fects are found in the items purchased? Sales and purchase transactions in Indonesia are regulated under the Civil Code (KUHPdt). Article 1474 of KUHPdt stated that in a sales and purchase transaction, a seller has two responsibilities, which are to hand over the item and to take the responsibility for the damages found in the item. The responsibility here is to ensure that the handover of the item is uninterrupted and that there are no hidden defects in the item as stipu-

lated in Article 1491 of KUHPdt. Matters related to hidden defects in a transaction are also regulated under Law No. 8/1999 on consumer protection (UUPK). The UUPK introduced the principle of “Product Liability” which stated that the manufacturer could be held accountable for the losses incurred from the goods it produced. Article 9 of UUPK also mentioned that “sellers are prohibited from offering, produce, promote goods and/or services inappropriately, and/or give the impression that goods did not

contain hidden defects”. With these regulations, it is clear that sellers can be held accountable for any hidden defects found in the goods. However, sellers often tried to escape such responsibility by introducing a regulation which stated that “goods that have been purchased cannot be returned or exchanged”. Could this be used as the basis for sellers to refuse returning buyers’ money should hidden defectsare found in the goods they sold? Article 18 of UUPK stated that in offering goods and/or services, a seller is prohibited from making a standard clause in any document or agreement such as: • Transferring the responsibility from the seller to the buyer; • That the seller has the right to reject any goods returned by the buyer; • That the seller has the right to reject a refund for the goods and/or services bought by the buyer; Any standard clause set out by seller in a document or agreement as mentioned above are legally invalid. Article 62 of UUPK stated that the penalties for any violation of the regulation above are 5 years prison or a maximum fine of Rp2,000,000,000 (two billion rupiah). With a fairly heavy sanction, sellers are expected to be more careful and to not only seek profits but that they should also pay attention to the rights of the buyers.

Matters related to hidden defects in a transaction are also regulated under Law No. 8/1999 on consumer protection (UUPK). The UUPK introduced the principle of “Product Liability” which stated that the manufacturer could be held accountable for the losses incurred from the goods it produced.

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November 2013 Vol. 2 No. 11

Infrastructure

28 Infrastructure Projects Scrapped TEMPO

In the 2012 PPP Book, the government offered 58 projects consisting of three ready-to-offer projects, 26 priority projects, and 29 potential projects, with a total value of $51.21 billion.

T For a new project, the evaluation is based on the status of the project, completeness of its documents, and the criteria set out in Regulation of Minister for National Development Planning (PPN) No. 6/2012, as well as other criteria (Ministry of Finance) that support evaluation of the new project proposal.

he National Development Planning Agency (Bappenas) has disclosed that 28 infrastructure projects worth $11.90 billion with public private partnership (PPP) scheme that will be removed from the 2013 PPP Book. In the 2012 PPP Book, the government offered 58 projects consisting of three ready-to-offer projects, 26 priority projects, and 29 potential projects, with a total value of $51.21 billion. Director for Development Public Private Partnership (PPP) Programme of Bappenas Bastary Pandji Indras said that those projects to be crossed out cover several infrastructure sectors, such as airports, toll roads, san-

itation, railways, road transport, ports, clean water supply, and power generation. “In total, 28 projects will be crossed out from the 2013 PPP Book, and today we are still evaluating [the materials] to be compiled into the 2013 PPP Book,” he said, Thursday (16/10). With regard to the projects that will be crossed out, Bastary said that the decision is the result of a government evaluation in conducting supervision of all the projects related to PPP. In addition, the government always monitors the development of projects that have been incorporated in the PPP Book of the previous year, both in terms of progress and constraints. Bastary added that in evalu-

ating projects that will be included in the PPP Book, the government takes a number of steps. For old projects, the evaluation is carried out based on the time period from their listing and development progress. Then, the evaluation results serve as input for the parties in charge of the projects (PJPK) in order to know any remaining documents required for the projects. For a new project, the evaluation is based on the status of the project, completeness of its documents, and the criteria set out in Regulation of Minister for National Development Planning (PPN) No. 6/2012, as well as other criteria (Ministry of Finance) that support evaluation of the new project proposal. “For new projects, it has been reported there are presently 19 projects that will be included in the 2013 RPKPS [PPP/ KPS project plan] Book,” said Bastary. Deputy for Infrastructure and Facilities of Bappenas Dedy S. Priatna said that the projects re-

moved from the PPP Book generally have not made any meaningful progress over the course of two years. “So it is not only the central government, but the regions also have to take part; there have to be some movements. If there is nothing, well, we remove [the projects],” he said, Friday (18/10). Moreover, the urgency of a project becomes one of the considerations for removing the PPPschemed project. Projects that have been excluded from the PPP book, Dedy said, will still be advanced, so when they are to be re-entered into the PPP Book, they can run smoothly. The relevant ministry for the project, he added, will propose the project again through a letter, which is preceded by meetings and coordination with permanent and non-permanent members of the Committee for the Acceleration of Priority Infrastructure Development.

Nusantara Infrastructure Eyes Rp 10t Toll Road Project PT Nusantara Infrastructure Tbk. is eyeing one segment of the Trans-Java toll road worth Rp 10 trillion. President & CEO of Nusantara Infrastructure M. Ramdani Basri said that the company is in the process of discussion with the toll road owner. “The toll road project is quite large, it is worth Rp 10 trillion. Insya Allah [God Willing] [it would be a segment of Trans-Ja-

wa],” he said, Thursday (24/10), without giving details of the segment in question. As an integrated infrastructure company, he said, the company records a sizable contribution from the toll roads it operates compared to other sectors such as clean water management, ports and renewable energy. Presently, the company has

four toll road segments, namely W1 Section of Jakarta Outer Ring Road (JORR) of Kebun Jeruk- Penjaringan route, Bintaro-Bumi Serpong Damai, Bosowa Marga Nusantara-Makassar, and Jalan Tol Seksi Enam [Section Six Toll Road] (Makassar). In total, these toll roads have a combined length of 35km. According to Ramdani, the toll road investment climate is

very good, with a number of regulations issued by the government being very supportive to development in the sector. “For example, there are already rules on land acquisition; there is land capping, BLU [public service agency] as well as the rules allowing a toll fee adjustment every two years. Meanwhile, in other countries, there have been cases of toll fee declines recorded.”

President & CEO of Nusantara Infrastructure M. Ramdani Basri (right).

The toll road project is quite large, it is worth Rp 10 trillion. Insya Allah [God Willing] [it would be a segment of TransJawa].”

November 2013 Vol. 2 No. 11

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Education President University

Indonesian Ambassador to Russia Visits President University The Indonesian Ambassador to the Russian Federation and the Republic of Belarus, Djauhari Oratmangun, visited President University (PRESUNIV), Cikarang to deliver a presentation on studying opportunities in Russia, Tuesday (23/10). The Ambassador’s visit to the University may also pave the way for Russian students wishing to study in Indonesia. The presentation was attended by S.D. Darmono, the founding father of Jababeka, and PRESUNIV students and faculty members who asked questions to the Ambassador about the costs to study in Russia, its education system, the local culture and other issues. After the presentation, the Ambassador was brought to visit the University’s facilities and had lunch at the Jababeka Golf and Country Club, Cikarang.

Public Lecture Promoting Indonesian Democracy in the Clingendael Institute The Dutch Institute of Clingendael in cooperation with the Embassy of the Republic of Indonesia to the Netherlands has organized a public lecture entitled “Democracies, NonDemocracies and Democratization in Asia” at the institute on Monday (28/10).

s many as 70 participants attended the lecture, among others officials of Dutch ministries, senior diplomats, Dutch think tanks, academics and stu-

dents, media and other participants. A prominent speaker for the public lecture was Dr. N. Hassan Wirajuda, Indonesian Foreign Minister in 2001-2004 and

2004-2009, currently member of the Presidential Advisory Council (Wantimpres) along with Prof. Dr. Jan Melisson (Senior Research Fellow at Clingendael/ University of Antwerp) as moderator. Wirajuda described the development of democratization in Asia and Southeast Asia, particularly the democratization process in Indonesia. Within the context of the region, Asia has

A prominent speaker for the public lecture was Dr. N. Hassan Wirajuda, Indonesian Foreign Minister in 2001-2004 and 2004-2009, currently member of the Presidential Advisory Council (Wantimpres) along with Prof. Dr. Jan Melisson (Senior Research Fellow at Clingendael/University of Antwerp) as moderator.

ASEAN Study Centre in UNPAD Inaugurated to Face ASEAN Community 2015 The ASEAN Study Centre at Padjadjaran University (UNPAD), Bandung has been inaugurated on Wednesday (30/10). The establishment of the ASEAN Study Center (PSA) at UNPAD was marked by the signing of Memorandum of Understanding (MoU) between the Directorate General of ASEAN Cooperation, Ministry of Foreign Affairs with UNPAD on Cooperation in the field of Education, Research/ Scientific Assessment and Community Service. “Through this MoU, the Foreign Ministry tries to lead all potentials that exist in Bandung in particular and in West Java in general as part of efforts to prepare the Indonesian people in facing the realization of the ASEAN Community by 2015,” said Directorate General of ASEAN Cooperation, Ambassador I Gusti Agung Wesaka Puja. The dean of FISIP UNPAD, who represented the rector, underlined that “West Java has great potential to take part in the opportunities available in ASEAN. It is time for us to be optimistic, outward-looking and to continue to improve the capacity and ability of the community to strengthen the competitiveness and compete in the ASEAN market”. A series of socialization activities consisting of seminars at Padjadjaran University were held as well as a working dinner with the with the media and businessmen. Directorate General of ASE-

The establishment of the ASEAN Study Center (PSA) at UNPAD was marked by the signing of Memorandum of Understanding (MoU) between the Directorate General of ASEAN Cooperation, Ministry of Foreign Affairs with UNPAD on Cooperation in the field of Education, Research/Scientific Assessment and Community Service. AN Cooperation of the Ministry of Foreign Affairs, Ambassador I Gusti Agung Wesaka Puja; Padjadjaran University academicians, Prof. Yanyan M. Yani, MAIR, Ph.D.; Vice Chairman of the Department Head of West Java, Iwan Gunawan; and Head of Foreign Trade Department of Trade and Industry, Government of West Java Province, Ibnu Sina were present. At the Focus Group Discussion were speakers Ambassador Eddy Haryadi; Plt. Director of Dialogue Partners and Inter Region, M.I. Derry Aman; Lecturer of Internasional Relations of Parahyangan University, Ratih Indraswari; and Lecturer of Internasional Relations of Padjajaran University, Nuraeni Suparman.

ASEAN Study Centre was built at Padjadjaran University and is the eighth ASEAN Study Center established with the cooperation of the Ministry of Foreign Affairs and a number of leading universities in Indonesia. In 2013, PSAs were established at Gadjah Mada University (UGM), Airlangga University (UNAIR), Indonesia University (UI), Hasanuddin University (UNHAS), Andalas University (UNAND) Brawijaya University (UB), and Sam Ratulangi University (UNSRAT). In 2014, efforts to establish the ASEAN Study Center at various universities in Indonesia will be continued, particularly in universities in eastern Indonesia, Sumatra, and Borneo.

witnessed good progress of democratization as well as enjoyed steady and positive region’s economic growth. He mentioned the democratization process went well and its even became “a model and inspiration” for other countries. He also explained Indonesia’s reform (reformasi) that has taken place in all sphere of lives and contexts (society, administrative governance, local auton-

omy/decentralization, media’s freedom, promotion of human rights, etc) resulted and supported by a positive and stable economic growth. “Political development (democracy, government transparency/ openness) and economic development must go together. Democracy, in turn, will help to create peace and stability in the country, the region and for the world,” he said.

However, Wirajuda reminded that democracy is “a work in progress” that must continuously be consolidated by all elements of the nation. In turn, he said democracy that continues to develop in Indonesia has been and will improve the people’s life. The Clingendael Institute is an independent research academy in the Netherlands focusing on politics and international re-

lations. This institute actively organizes and conducts research activities, seminars and courses for Dutch officials, foreign diplomats, scholars, think tanks and others. The Clingendael Institute is also having closer cooperation with the Ministry of Foreign Affairs of the Republic of Indonesia, especially in the field of education and organizes short courses for Indonesian diplomats.

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BUSINESS

SECTION B November 2013 Vol. 2 No. 11 www.thepresidentpost.com

SOE Ministry to Take Over Inalum energitoday.com

The House of Representatives agreed on Tuesday to hand over PT Inalum`s management to the State-Owned Enterprises (SOE) Ministry following the government`s decision to acquire it after three years of negotiations with the Japanese government.

he House made the decision in its joint meeting with all parties, as the government decided not to extend the expired contract of PT Inalum, an aluminum joint venture between Indonesia and Japan in which Indonesia held 41.13% of the company`s shares and Japan owned 58.87%. “House Commission VI and the government agree to hand over the management of Inalum to the State-Owned Enterprises Ministry based on the law,” Commission VI Chairman Airlangga Hartarto said when reading a statement at the conclusion of the joint meeting with Industry Minister MS Hidayat and SOE Minister Dahlan Iskan, at the Parliament building here on Tuesday night. The meeting was also attended by Head of the Government Development and Finance Comptroller (BPKP) Mardiasmo and North Sumatra Governor Gatot Pujo Nogroho. The House agreed to the results of negotiations carried out by The Asahan Project Negotiation Team, formed by the President in 2010. “We hope the take-

paid to Nippon Asahan Aluminium Ltd. The $558 million value was based upon the audit of the BPKP, worth $424 million plus an asset revaluation assessment worth $134 million, according to Chief Economic Minister Hatta Rajasa.

over process will be smooth so that the government will own 100 percent of PT Inalum`s stake beginning November 1, 2013,” Hartarto said, referring to the contract of the joint venture firm, which will expire on October 31, 2013. PT Indonesia Asahan Aluminium (Inalum) manufactures aluminum in Asahan, North Sumatra, with an annual production capacity of 230,000-240,000 tons. The project began operating on January 6, 1976 based upon an agreement signed on July 7, 1975 and set to expire on October 31, 2013. Japan, with 12 private Japanese firms in the joint venture, is the majority shareholder through Nippon Asahan Aluminium (NAA). 50% of NAA shares are controlled by the Japan Bank for International Cooperation (JBIC), which represents the Japanese government, while the remaining 50% are owned by private Japanese firms such as Sumitomo Chemical Company Ltd, Sumitomo Shoi Kaisha Ltd, and Nippon Light Metal Co Ltd. The House also agreed to transfer shares to Japan on behalf of the Indonesian govern-

PT Indonesia Asahan Aluminium (Inalum) manufactures aluminum in Asahan, North Sumatra, with an annual production capacity of 230,000-240,000 tons. The project began operating on January 6, 1976 based upon an agreement signed on July 7, 1975 and set to expire on October 31, 2013. ment, based upon the results of the Indonesian negotiating team as contained in the Master Agreement with Japanese NAA. Industry Minister MS Hidayat said he appreciated the House Commission VI`s endorsement of the agreement reached by the negotiating team with the Japanese side. “We hope all processes that have to be passed in the takeover of Inalum would proceed smoothly, based on plans, so that Inalum would be managed well,” noted Hidayat. Last year, then-Finance Min-

Apindo Concerned Over Labor Actions The Indonesian Employers Association (Apindo) expressed concern over labor actions in the country here on Tuesday, saying that unless they are controlled they could drive investors away. “Some investors from South Korea, for example, have already asked to leave, but we can still ask them to stay,” Apindo`s General Chairman Sofyan Wanandi said. He noted that South Korean investors often seek labor-intensive manufacturing, especially those operating in shoe manufacturing, garment and electronic industries. “We hoped workers would think and not do things that would harm our economy. If it goes on like this, we will be in trouble when seeking to attract

Sofyan Wanandi

investment,” he said. Sofyan said employers urged the government to create security and legal certainties so the investment climate in the country could be maintained. “We must not continuously be like this. We can collapse,” he said.

He admitted that a labor strike is the right of unions, but unions must also think before conducting strikes in order to prevent damage to the investment climate and not threaten investments in the country. With regard to domestic investors, Sofyan said some have already moved their businesses in Central Java. Sofyan`s concern emerged following workers` plans to conduct a national strike from October 31 to November 1. During this strike, about three million workers are expected to cease work in 20 provinces and 150 cities and districts. Workers are demanding a wage increase up to Rp3.7 million a month, as well as ending the outsourcing of work.

Apartment Prices Rise Amid Economic Slowdown Apartment and condominium property prices are continuing to rise, in line with trends in recent years, despite the global economy slowdown underway. “Indonesia has experienced significant price hikes in the apartment sector over the last five years,” stated Jones Lang LaSalle (JLL) Indonesia`s Head of Project Marketing Luke Rowe in a written statement received here on Wednesday. Rowe said that a number of prestigious projects in Jakarta, such as an apartment project owned by PT Astra International Tbk and Hong Kong Land, are thought to be continuing the trend despite the volatility of the financial markets and the rupiah fluctuations. JLL Indonesia has been appointed as the exclusive marketing agent for PT Astra International Tbk and Hong Kong Land apartment projects. “This project will be one of the highest-profile projects launched in Indonesia, which will strengthen the position of Jones Lang LaSalle as a leader in apartment marketing,”

The large number of apartments available is expected to flood the strata title apartment market over the next three years.” remarked JLL Indonesia`s Country Head Todd Lauchlan. Earlier, JLL Indonesia`s Head of Research Anton Sitorus had suggested that the sales of condominiums in Jakarta in 2013 would break records. “Condominium sales in Jakarta during 2013 are expected to set a new record,” Anton explained at a press conference to release the third-quarter results for properties in Jakarta on Thursday, Oct. 17, 2013. The prediction that the 2013 condominium sales will be higher than that of the previous year

is partly attributable to the number of sales seen, mainly in the first half of this year, Anton added. Based on the company`s data, the record annual condominium sales figure for Jakarta in 2012 was more than 12 thousand condo units. However, from January to September 2013, the company reportedly achieved sales of some 11 thousand units, which includes more than four thousand units sold in each of the first two quarters, Anton said. The supply of apartments will flood the Jakarta area in the coming years, with more residential and commercial center joint-concept offers. “The large number of apartments available is expected to flood the strata title apartment market over the next three years,” stated Associate Director of Research Colliers International Indonesia (property consultant) Salanto Ferry. Salanto also pointed out that more apartment blocks would be built using the concept of integrated residential and commercial areas.

ister Agus Martowardojo, who is now governor of the central bank, Bank Indonesia (BI), said that Japan`s Nippon Asahan Aluminium should no longer extend its cooperation contract. Moreover, Indonesia suffered losses during the 22 year cooperation. PT Inalum reported a profit of $12 million in 2010, while its debt burden reached $70 million, according to Hj Meilizar Latif, a member of North Sumatra`s Legislative Assembly (DPRD), last year. The Indonesian government has chosen not to extend

the contract and is prepared to pay some $424 million to Japan to control all Inalum shares. However, both sides still have different estimates of the value of Inalum assets. Differences occur because NAA Japan, shareholder of PT Inalum, calculated the revaluation of assets, while the government, through the Finance and Development Comptroller, or BPKP, does not recognize revaluation. Now the government has proposed a new book value calculation of $558 million for acquiring the 58.87% stake that has to be

Based on this agreement, the Inalum takeover process must be finished on October 31, 2013, at the latest. Rajasa said that the new value being proposed by Indonesia was lower than NAA`s book value of $626 million, but much higher than that of the BPKP, which totaled $424 million. “The revaluation has been going on, so that the value increases to $558 million. Both sides will discuss this in the next two days,” the coordinating minister for economic affairs added. Rajasa said that there were still five work days to finish the deal, including the fund transfer based upon agreements reached with the NAA side. Thus, the takeover process is expected to be finished through consensus without the need to go to the arbitration court. In the meantime, Industry Minister MS Hidayat said that the $558 million value was the final bid for Indonesia to offer in the next one to two days. “The Indonesian government is inclined to settle the problem without going through the arbitration process. Although we have not reached a final deal, we still

do not want to settle it on the arbitration table,” he said. After that, Hidayat said, both sides are expected to sign a document on the termination of the work contract between Indonesia and Japan at the Inalum office. “We hope the signing of the termination of the contract would be attended by representatives of the 12 stakeholder companies,” the minister stated. Meanwhile, before the House decided to hand over the management of Inalum to the ministry of state-enterprises, SOE Minister Dahlan Iskan said last week that he would not speculate on the make-up of the future management of PT Inalum, after it is taken over by Indonesia on November 1, 2013. “I will follow (whatever decision it will be made). It is up to the government whether it will be made into a state-owned company or put under the ministry of finance,” he said, after attending a coordination meeting on food resilience at the office of the coordinating minister of economic affairs last Wednesday. Dahlan also declined to elaborate, when asked whether the government might later choose to turn Inalum into a stateowned company under his management. He expressed confidence that by November 1, 2013 PT Inalum would return to Indonesia. Inalum is the only aluminum plant in Southeast Asia that has complete smelting facilities.

November 2013 Vol. 2 No. 11

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Investment

Observing Fixed Income Mutual Funds By Wawan Hendrayana (Research & Investment Analyst)

It is important that fund managers remind investors and communicate every development to the clients intensively to prevent panic as in 2005 because the price decline could still continue after the interest rate hike. Investors should be reminded that the bond value will return to its par value.

lmost all monetary instruments in the capital market, including bonds and bond mutual funds, experienced significant increase when the condition of capital market industry improved after the 2008 financial crisis. However, investors still need to be cautious about the increasing interest rate trend. The declining trend in 2004 interest rates upset banking customers and forced the banking sector to come up with ideas to prevent customers from withdrawing their money and to place them in other instruments. The banking sector came up with an interesting idea to sell fixed-income bond mutual funds (RDPT), in which the bond value would increase at the time when interest rates in the banking sector slide. The banking sector promoted that the bondâ&#x20AC;&#x2122;s return potential was highercompared to the time deposits. As the result, time deposit customers rushed to place their funds in the RDPT, which eventually brought the amount of RDPT under management to soar by more than 150%, from Rp35 trillion in early 2004 to its highest level at Rp88 trillion in February 2005. Unfortunately, the rapid growth was not followed by clear regulations in terms of sales, socialization, and assessment of decent bond prices. Since the

kontan.co.id

product was sold in banks, most investors thought that the product was similar to time deposits and thus they were only after the returns without knowing exactly why RDPT was able to offer returns higher than time deposits. The time bomb finally exploded in 2005 when the government decided to double the price of subsidized fuel which caused both the inflation and bank interest rates to soar and the bond value to drop. Investors were shocked to see their investment value became negative as the result of the declining bond value. Such condition led to a rush, causing the amount of RDPT under management to plunge by more than 86% from Rp88 tril-

lion in February 2005 to Rp12 trillion in December 2005. Surely the government, fund managers, investors, banking sector, and sales agents have learned their lesson from this incident. A new regulation was issued. Investment managers were required to assess their portfolio at a decent price, sales agents who sell mutual funds were required to have a license. Such measures were quite effective to restore investorsâ&#x20AC;&#x2122; trust. In 2011, the government started to impose 5% tax on coupons and profits. The policy slightly affected the returns of the RDPT. Nevertheless, investors of such product are those from non-pen-

sion fund institutions. As we all know, the coupons and profits from bonds purchased by nonpension fund institutions such as foundations, insurance and corporates were subject to a 15% tax. Given such condition, it was far more lucrative to buy bonds indirectly through RDPT. Per end of September 2013, the amount of RDPT funds under management reached Rp28 trillion, up by 8% compared to its position at the end of 2011 which stood at Rp26 trillion. Although in terms of percentage the growth was still below the average mutual funds growth, it can be interpreted that investors still have interests in the product.

This year, the government decided to increase the price of subsidized fuel again and forced investors to consider every risk. Would the 2005 incident repeat itself? Generally, subsidized fuel price would jack up the inflation rate and, force Bank Indonesia to also increase interest rates. Such condition could serve as a negative catalyst for the bond market that would affect bond mutual funds. In the meantime, the Capital Market and Financial Institutions Supervisory Agency (Bapepam-LK) has also implemented regulation No.IV.C.2 which stipulatedthe decent market value of securities in their mutual funds portfolios. To assess the bondâ&#x20AC;&#x2122;s decent market value, price reference from the Indonesian Bond Pricing Agency (IBPA) is needed. The regulation was issued on the spirit of good intention to provide transparency for investors. However, its implementation had led to volatility of the net asset value of the bond which caused the value of some bond mutual funds to incur a sharp correction.

Per end of September 2013, the amount of RDPT funds under management reached Rp28 trillion, up by 8% compared to its position at the end of 2011 which stood at Rp26 trillion. Although in terms of percentage the growth was still below the average mutual funds growth, it can be interpreted that investors still have interests in the product.

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Property

How to Overcome Property Bubble Risks www.housemeasures.com

In Indonesia, property prices have exceeded real values, especially in Jabodetabek and Bali areas. However, Indonesia has still not entered the property bubble stage as non-performing loans (NPL) remained low at below 5%. By Andri Marsetianto

ullishness over Indonesia’s economic fundamentals had pushed property prices to rise significantly, especially in the Great Jakarta Area (Jabodetabek) and Bali, since 2009. Developers enthusiastically launched new clusters for residential areas every three months. The offers made by developers also varied, for instance they would offer new clusters for upper middle segment at the beginning of the year, then opened new commercial areas which comprise shop houses or SOHO (Small Office Home Office) three months later, then opened other commercial areas such as shopping malls, hawker centers or even modern markets. Normally in the middle of the year, developers would offer properties for investment such as condotels, rental apartments and boarding houses. In the third and fourth quarters, developers usually launch new housing complex, but this time evenly by developing housings for

lower middle customers (usually aimed to introduce new areas) and expand clusters that had already been launched in the second quarter and super luxury new clusters. Theoretically, the soaring property prices were still deemed as normal given the unbalanced supply and demand chain. The government experienced a shortage of supplies of about 13.6 million houses and demand for houses in Indonesia per year is estimated at 700 thousand. The World Bank has warned that Indonesia’s property sector was saturated or that it has experienced a bubble, especially in terms of the price offered to consumers which continued to rise. A World Bank data report titled Indonesia Economic Quarterly, which was released on 18 March 2013, stated that Indonesia’s property sector could experience a bubble due to the continuous rise of property price and strong loan application throughout 2012. Jesse Colombo, an economist, said that property bubble was a combination of stimulative monetary policies issued by global

Wise consumers and investors should not choose or buy a property as a speculation tool, but to adjust it with their initial investment plan after checking financial capacity and quality.

central banks and China’s economic stimulus program which focused on construction. Such factor eventually caused prices of commodities to rise from 2009 until the beginning of 2011 and bolstered the economies of developing countries that had rich natural resources such as Indonesia. The theory of the “Greater Fool” stated that the bubble was the result of speculators be-

ing overly optimistic (The Fools) who took the risk of purchasing overvalued assets in the hope of selling them back to other speculators (The Greater Fools) at a higher price. The bubble would get bigger if The Fools continued to find the Greater Fools who were willing to pay higher. Eventually, the bubble will burst when The Greater Fools become The Greatest Fools. We certainly do not want this to happen.

Singapore, for instance, has introduced a cooling measure after getting signs that its property market was experiencing a bubble. In Indonesia, property prices have exceeded real values, especially in Jabodetabek and Bali areas. However, Indonesia has still not entered the property bubble stage as non-performing loans (NPL) remained low at below 5%. Bank Indonesia said

that property loan ratio to total bank loan remained low, in which KPR/KPA (mortgage) ratio to total bank loan was still low, at 8%, while property loans to bank loan ratio was still at 14%. Property Loans to Gross Domestic Product was also still below 10%, in contrast to the United States and Singapore which exceeded 50%. Mortgage interests were also not that low, ranging between 8% and 12% as opposed

to 1.2% - 1.5% in Singapore. The property bubble dynamics in Indonesia needed to be addressed wisely, where supporting indicators have shown that the bubble has not reached an alarming level. Wise consumers and investors should not choose or buy a property as a speculation tool, but to adjust it with their initial investment plan after checking financial capacity and quality. Property is basically a medium to long term investment, thus in planning the next property investment we should not be influenced by taglines advertised by developers that prices will go up every certain period in a relatively short time (<3 months), so that we don’t get trapped in the game of prices that would ultimately lead to a real property bubble.

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November 2013 Vol. 2 No. 11

Events Review BREAKFAST DIALOGUE

Risk Management in Turbulent Times TPP/Rians Rivco

Risk management is a set of activities and methods, including the principles, framework and process, to guide the organization and control of a variety of risks that could affect the company’s ability to achieve its objectives lihat videonya di: www.thepresidenttv.com

eter Verhezen, the founder of Verhezen & Associates, a company that provides training in integrated risk management strategy, says that no business can survive without taking risks. He said the risk is the effect of uncertainty. “Deviations from what is expected could be positive or negative,” he said. Therefore, according to Peter in a dialogue at the Financial Club Jakarta, a leader must be able to minimize the negative risk by implementing risk management. Risk management is a set of activities and methods, including the principles, framework and process, to guide the organization and control of a variety of risks that could affect the company’s ability to achieve its objectives, he said. He took a simple example: a person traveling to the office usually takes one hour. If there

was an accident or a demo, it will take longer. However, if the trip is done on holidays or weekends it could only take half an hour shorter. The person must be able to minimize the negative risk of longer traveling time by leaving early, he said. He also said that in facing difficult times, we can take the example of the boxer Muhammad Ali. He can adapt to hard times and has the flexibility, agility and the ability to absorb difficult times. Ali was even called a “dancer” because of his agility in facing his opponents. He also practiced long to sustain the punches of his opponents. He knows what to do to be a winner. Peter also said running a business is like climbing a wall. If the wall is smooth then it will be hard to climb because there is nothing to be climbed or held on to. A crisis is a small obstacle in a wall and that problems in business can help you to grow and stand upright. “Overcoming adversity can give you confidence,” he concluded.

Peter also said running a business is like climbing a wall. If the wall is smooth then it will be hard to climb because there is nothing to be climbed or held on to. A crisis is a small obstacle in a wall and that problems in business can help you to grow and stand upright.

Mahfud MD: Red and White —the Criteria for President TPP/Heros Barasakti

The current challenge is how to find a clean leader in this messy and unclean situation.

ormer Constitutional Court chief Mahfud MD said that the criteria for an Indonesian president should be Red and White. “Red is for boldness, while white represents cleanliness. We should not simply rely on boldness only but also cleanliness,” said Mahfud in a discussion on the constitution and corruption at the University of Pelita Harapan (UPH), Karawaci, Monday (7/10). Mahfud also said that the election process is now better than in the past, in which the winner would have been known a few months earlier.

“But our elections have still not produced good leaders who are able to eradicate corruption. Gamawan Fauzi, the Interior Minister, said that more than 50% or 287 regional heads are involved in offences and 80% of it are corruption cases,” he said. According to Mahfud, the country’s pillars of democracy, the judiciary, executive and legislative branches are already contaminated with corruption but that Indonesia still has two clean things: the press and social media, who keep an eye on political activities. According to him, the current challenge is how to find a clean leader in this messy and unclean situation. He pointed out that Indonesia has an ideology and a good society but that the elite is “bad”. “When political costs become expensive, the elite turn to corruption. Angels can be devils if

they enter the Indonesian system,” said Mahfud. On that occasion, Mahfud also invited everyone not to be “golput” (non-voters) in the next election next year. Meanwhile Chairman of the KPU (General Election Commission) Husni Kamil Manik said the current election process has improved and will continue to make improvements. “It is not the election system that is bad but the perpetrators,” he said. “All candidates’ campaign financial reports must be made and reported to their respective politic party. We will keep an eye on political parties,” he said. On the same occasion, the chairman of the Indonesian Election Supervisory Body (Bawaslu), Muhammad, said it could not be guaranteed that the election organizer will be neutral. “The temptation is definitely

there, but it must be prevented,” he said. He said that as public confidence in universities is huge, he called on university students to become Bawaslu watchdogs. The symposium entitled “The 2014 Election Free from of Corruption Towards a New Indonesia” was held in cooperation with the UPH Law Faculty, the Constitutional Court (MK) and several organizations promoting democrcy, the Constitution and anti-corruption.

When political costs become expensive, the elite turn to corruption. Angels can be devils if they enter the Indonesian system.”

November 2013 Vol. 2 No. 11

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Events Review

PATA Indonesia Urges Kemenparekraf to Develop New Tourism Destinations Chairman of the Pacific Asia Travel Association (PATA) Indonesia Chapter S.D. Darmono has proposed to the Ministry of Tourism and Creative Economy (Kemenparekraf) to develop at least 100 new tourism destinations.

armono gave the statement at the PATA International Conference held at the Hotel Royal Ambarukmo, Yogyakarta, which was inaugurated by Deputy Minister of Tourism and Creative Economy Sapta Nirwandar and attended by PATA CEO Martin Craigs, Director General of Tourism Destination Development Kemenparekraf Firman Rahim, and other delegates. “We can ask 400 regents to compete in developing tourism potentials in their respective regions. After they have been developed, we ask the government to promote it to the international world,” said Darmono. He continued, “But there should be a criteria such as available tour guide that describes the culture there. So the local community is also involved in developing the tourist areas. For instance Bali and Yogyakarta, the government and community are working together to develop the regions for the purpose of tourism.”

According to Darmono, academics cannot be separated from the development of the tourism industry but they should not only get theories in classrooms but also practice. “So when they have direct contact with tourists, they will not be confused on what to do,” he said. He further explained that if it all went well then Indonesia can develop more new destinations because there are 17 thousand islands in Indonesia. In line with Darmono, PATA CEO Martin Craigs said, “Indonesia is abundant with tourist attractions and has a fantastic potential in tourism in the future. It should be used and managed properly because your tourism is the personality of your country.” He also suggested all stakeholders in Indonesia to work in synergy to develop tourism. He gave an example, to develop a hub city there should be a synergy between the operation of the an airline and good marketing. “The existence of the hub city is important to facilitate the

movement of tourists in the current era of global tourism. Data shows that the Asia-Pacific, particularly Southeast Asia, is a region with the highest tourist growth in the past, today and in the future,” he said. Meanwhile, Deputy Minister of Tourism and Creative Economy Sapta Nirwandar in his speech said, “Kemenparekraf has developed new tourism areas in Kalimantan, Sumatra, Sulawesi and Papua. The development includes infrastructure, supporting facilities, and education of tourism on local people.” Sapta also believes that tourism revenues have to increase in the future. “Thus the support of all parties is needed,” he concluded. PATA International Conference was organized jointly by PATA Indonesia and the Ministry of Tourism and Creative Economy on 10 to 12 October 2013. The objective of the forum is to establish cooperation between tourism actors within and outside the country.

TPP/Heros Barasakti

Sapta Nirwandar, S.D. Darmono, Martin Craigs and tourism [;ayers are optimistic that the number of new tourism destinations in the country will increase rapidly in the future.

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November 2013 Vol. 2 No. 11

Pictorial Events Celebration of “Double Ten Day” TPP/Rians Rivco

To celebrate the 102th year anniversary of the founding of the Republic of China (ROC), Taiwan Economic and Trade Representative Office of Taiwan (TETO) held a National Day at Hotel Borobudur, Central Jakarta, Thursday (10/10). This event is also often referred to as Double Ten Day that coincides with the 10th day of the 10th month.

n his speech, Head of TETO Andrew Hsia said cooperation between Indonesia and Taiwan has been going on since a long time. In fact, according to him, the volume of trade between Taiwan and Indonesia within the last few years reached $12.5 billion or Rp 137 trillion. “As an important partner of Indonesia, Taiwan and its citizens continue to come to Indonesia, creating economic opportunities, especially in the trade sector,” said Andrew Hsia. In addition to the economy, Taiwan and Indonesia are also well-established in the sectors of education, tourism, culture, technology and agriculture.

Andrew Shia, Kepala TETO Indonesia memberikan kata sambutan.

The 28th Trade Expo Indonesia 2013 The 28th Trade Expo Indonesia 2013 was held in Jakarta International Expo (JIExpo), Kemayoran, Jakarta (16-20/10). The event was themed “Remarkable Indonesia” and was opened by Vice President Boediono. In his speech, Boediono said

“Let us show to the world that Indonesian products are quality products, value-added, and highly competitive, so that it can penetrate the international market. It is important to promote and display superior products of Indonesia.

TEI was followed by Small and Medium Enterprises (SMEs) and SOEs. At least 2,000 businessmen participated in the trade fair. Minister of Trade Gita Wirjawan says there are 9,300 potential buyers from 106 countries that enlivened the event.

Groundbreaking Elvis Tower Jababeka

TEI 2013 was attended by Minister of Industry MS Hidayat, Chairman of Indonesia Investment Coordinating Board Mahendra Siregar, Chairman of APINDO Sofjan Wanandi and Chairman of KADIN,Suryo Bambang Sulisto.

Jababeka Residence held a groundbreaking event marking its new residential product, Elvis Tower, on Friday (18/10). Elvis Tower is an apartment built near the center of the Plaza Indonesia shopping area @ Jababeka,which is planned to be built in mid2014.

The groundbreaking event was attended by President Commissioner of PT Graha Buana Cikarang Tanto Kurniawan, Managing Director Suteja Darmono, and General Manager Paskal Wilson. It will have four towers, and the first phase will be marketed at the price of Rp 350 million. Besides Elvis Tower this re-

gion will also have Hollywood Residence adjacent to Jababeka Office Tower. This region is promising because there will be a Culinary Center, 200 meters from Plaza Indonesia @ Jababeka, 250 meters from the President University, and 100 meters from the Jababeka Convention Hall. TPP/Heros Barasakti

Let us show to the world that Indonesian products are quality products, value-added, and highly competitive, so that it can penetrate the international market. It is important to promote and display superior products of Indonesia.” TPP/Heros Barasakti

Boediono is optimistic that Indonesian products are able to compete in the international market.

Elvis Tower is a proof of Jababeka Residence’s existence in the field of property.

Besides Elvis Tower this region will also have Hollywood Residence adjacent to Jababeka Office Tower.

Flag-raising by the Board of Directors, marking the building of Elvis Tower This year’s event featured bags, purses, and shoes.

Jababeka Industrial Estate, an integrated industrial area, participated in the event.

November 2013 Vol. 2 No. 11

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Pictorial Events Indonesia Canada Chamber Council Gathering TPP/Heros Barasakti

Indonesia Canada Chamber Council (ICCC) held a gathering at the Polo Lounge Menara Batavia, Jakarta on Thursday (17/10).

he gathering was held in cooperation with major sponsors of ICCC, namely PT Ilham Treda Industry, Grand Kemang Hotel, Mercantile Athletic Club, Molly Maloneâ&#x20AC;&#x2122;s Irish Pub, and the Polo Lounge. This gathering was attended by ICCC President Cris Bendl and other 80 ICCC members. The ICCC is an organization

dedicated to serving its members. It provides regular information on business in Indonesia, hosts events, provides opportunities to learn about and discuss business in Indonesia and in Canada, and represents the general interests of Canadian business to the Indonesian government. They also actively organize a number of social events to bring members closer.

JERIN Festival 2013 The JERIN Festival was organized by the Economic Society of Indonesia-Germany (EKONID) along with the German Embassy and partners in the fields of business, culture, politics and education. The idea behind the festival is to highlight cooperation between the institutions from Germany and the Indonesian government. German institutions that participated were namely GIZ, DAAD and the Goethe-Institut. Visitors can get information on education in Germany, how to pursue a career in a German company, and the way of life in Germany. TPP/Rians Rivco

Jakarta Beatboxing

Suni Mehwani and Gary Plant.

JERIN Festival was held in South Plaza, Gelora Bung Karno, from October 18 to 20.

The President Post

Special Report

SECTION C Nnovember 2013 Vol 2. No. 11 www.thepresidentpost.com MII

IPC: Striving To Become a World-class Port Operator As a port operator, Indonesia Port Corporation (IPC) holds a prominent role in the chain of Indonesia’s logistics. IPC is expected to move faster, more effective and more efficient in assisting the needs of customers and those who require port services.

here have been complaints concerning port conditions in Indonesia, with exporters and importers using port services in Indonesia painting a poor portrait of the situation. For decades, Jakarta’s Tanjung Priok Port has been criticized for its poor cargo loading and unloading. This problem has caused importers and exporters to suffer losses. Located in North Jakarta, the port has to accomodate an overload of imported goods that causes administrative problems, not to mention the ingrained bureaucratic snags and illegal levies. Insufficient port infrastructure and poor roads make the situation even worse. Supply of goods are hampered, leaving companies with high logistics expenses. Many companies have been com-

plaining about the same thing in other Indonesian ports. Swift access to ports by way of good roads are important factors for companies in the import and export business. That is why poor port infrastructure has been blamed for companies’ low competitiveness. However, one cannot simply blame operator companies like Pelindo. Strong government commitment to create regulations and policies in order to develop world-class ports is the main key to support local industries. It is unfortunate that Indonesia, with its rich natural resources, huge human resources and strategic geographic location has to bear high logistics expenditure. Thus, poor standard of infrastructure is a crucial problem for business players in this country. Without sufficient facilities, the government’s effort to boost eco-

nomic growth will not succeed. Flow of investment and economic growth depend greatly on facilities like roads, ports and airports. The government seems not to be really serious in responding to the issue. As a result, Indonesia’s ports leave much to be desired. On a larger scale, shipping process cannot be done in national ports; it has to be diverted to ports in neighboring countries. Those countries, which originally do not possess natural resources, will benefit greatly from our not-so-advanced ports. These are issues that underline the role of Tanjung Priok as an international hub port, which has a container volume of 20.5 million TEUs (twenty feet equivalent units). If Tanjung Priok becomes successful as a hub port, 40% of the targetted shipping goods to China and Japan could be

processed through the port. The development of Tanjung Priok to become a hub port will have a positive impact on Indonesia’s economy. By being a hub port, the traffic of goods will flow faster because it does not have to depend on the schedule dictated by other country’s ports. Besides, there will be efficiency in financial spending. This current messy condition has prompted State Minister of BUMN (State owned corporations) Dahlan Iskan to put his hopes on BUMNs to manage ports. He hopes that a BUMN specifically engaged in port affairs like Pelabuhan Indonesia II would play bigger roles in helping Indonesia get a better investment grade. One of BUMN’s duties, said Dahlan, is to lessen the cost of logistics as Indonesia’s is still very high (twice compared to Vietnam’s).

November 2013 Vol. 2 No. 11

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Special Report MII

IPC offers ship services, goods services and miscellaneous services. IPC has been running the business in order to increase trade activities with the ultimate goal of decreasing the number of transportation and logistics expenses.

PT Pelabuhan Indonesia II Persero MII

Pelindo II’s serious efforts came into realization with the launching of its new corporate identity. It now has a new logo and has changed its name to IPC in early 2012. This new identity solidifies the new spirit of PELINDO II in transforming itself: an Indonesian service provider that will create more efficient and modern ports in many respects.

he bad reputation of Indonesia’s port is starting to be addressed seriously by Pelindo II. The CEO of Pelindo II has envisioned the transformation of Tanjung Priok port. Having been assigned to take the helm of this BUMN, he has determined that Pelindo II will take charge of 12 ports in 10 provinces in Indonesia and turn them into ports offering world-class services. In the future, the ports will become quality ports offering security and smoothness in the flow of goods. It will also guarantee sufficient productivity to fulfill the dynamism of customers’ needs. Pelindo II’s serious efforts came into realization with the launching of its new corporate identity. It now has a new logo and has changed its name to IPC in early 2012. This new identity solidifies the new spirit of PELINDO II in transforming itself: an Indonesian service provider that will create more efficient and modern ports in many respects. This spirit of transformation will be reflected in all of the company’s activities through strategic and operational management and comprehensive and

agile yet flexible improvement of human resources on the principal of energizing trade. The new identity features the colors orange and blue, representing the rise of the sun, agility and self-expression. Values imprinted in orange are the spirit of transformation, strength, optimism and pride of all workers to stand on the frontline together to achieve the company’s goals. Blue means the readiness to enter the new dynamic and flexible era, facing challenges in order to meet the company’s vision: to be a world-class port operator. The combination of blue and orange in the new logo is complemented with an arrow flying away on the surface of a big and clean ocean representing the company’s concept of growth, focus and dynamism. R.J. Lino, the CEO, says agility in working is the core of the transformation spirit. He is aware that IPC, as a port operator, holds a very important role in the chain of logistics in Indonesia. According to Lino, they have to move faster, more effective and efficient in responding to the needs and wants of customers. The less time it takes to

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IPC is striving to always increase productivity through its programs 24/7 (24 hours a day, seven days a week), procurement of equipment and implementation of ICT-based services.

get to the service of ports, the less the costs they have to bear. Eventually, this can help keep down prices in the national market so that it will stimulate Indonesia’s economic growth. Lino explained that increasing competition in both regional and international scales has forced Indonesia to be able to create efficiency in goods distribution through an integrated transportation system. One of the ways is to provide flexible service focusing in controlling operation expenditure. In response to this challenge, IPC implements changes on two sides: operational infrastructure and human resources. In terms of infrastructure, IPC tries to always maximize the capacity of ports by adding more equipment with modern technology. In early 2012, IPC branch Tanjung Priok received nine units of loading and unloading equipment variant gantry jib cranes, part of the procurement of 15 cranes of the same variant. This addition is one of the provisions of loading and unloading equipment that has been done gradually since last year. Realizing the importance of information technology, IPC is seeking to elevate the implementation of information and communication technology (ICT) based service. Service in all work fields allows owners of goods to know the time slots and ships’ berth location and also the tracking of administration and permission process. This way, the queue of ships and mass of goods can be decreased. This whole system can actually maximize effective working time up to 80% in 2012. In 2012, IPC took on the Kalibaru Utara terminal. Earlier, IPC signed a memorandum of understanding (MoU) with BP Batam, which handles the free port zone, to provide facility to the port in Tanjung Sauh, which was implemented in the same year. In terms of human resources

improvement, IPC is aware on the importance of human capital. A program covers the mapping of workers’ capability, the sending of best performing employees to join training abroad, conducting competency-based assessment process and creating healthy competition in the workplace. “Upgrading port services will produce a better flow of goods and will increase income to cover the costs needed for infrastructure development. The rise in the flow of trade means more goods will enter and leave ports. So, hopefully, it can create positive competition that demands quality in service and also decrease logistic expenses. These are the things we want to achieve by implementing a strategy that is in tune to the agility spirit in all aspects of the company’s business,” said Lino. IPC or Pelindo II is a BUMN dealing in the management of port services in Indonesia. Founded in December 1, 1992, IPC’s headquarters is in Jakarta, It has operational areas in 10 provinces and is responsible for managing 12 ports, which are TelukBayur Port in Sumatra Barat, Jambi Port in Jambi, Palembang Port in South Sumatra, Bengkulu Port in Bengkulu, Panjang Port in Lampung, Tanjung Pandan Port and Pangkal Balam Port in Bangka Belitung, Banten Port in Banten, Tanjung Priok Port and Sunda Kelapa in DKI Jakarta, Cirebon Port in West Java and Pontianak Port in West Kalimantan. IPC offers ship services, goods services and miscellaneous services. IPC has been running the business in order to increase trade activities with the ultimate goal of decreasing the number of transportation and logistics expenses. IPC is striving to always increase productivity through its programs 24/7 (24 hours a day, seven days a week), procurement of equipment and implementation of ICT-based services.

R.J. Lino, the CEO of IPC

According to Lino, they have to move faster, more effective and efficient in responding to the needs and wants of customers. The less time it takes to get to the service of ports, the less the costs they have to bear. Eventually, this can help keep down prices in the national market so that it will stimulate Indonesia’s economic growth.

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November 2013 Vol. 2 No. 11

Special Report

Increasing Income Key to IPC’s success is in its revamping of soft infrastructure and hard infrastructure.

n striving to optimize Indonesia’s economic growth, IPC is improving all of its port services. In fact, its innovations have benefitted IPC in terms of business growth in 2012. This is seen from its annual income in 2012, which reached Rp 5.6 trillion or 27% higher than the previous year. From that total income, IPC gained Rp 1.7 trillion in profit or 21% higher compared to that in 2011. Progress can also be seen

in the the traffic of containers that pass through ports. In 2012 around 6.445.791 TEUs of container traffic were recorded, an increase of 9% over 5.918.797 TEUs in 2011. The biggest contribution of this number came from from Tanjung Priok Port, whijch handled 5.925.769 TEUs or 98% of all containers under IPC. Aside from containers, the rise in goods traffic is also experienced by bulk docks or general cargo, which rose by 8.4%, from 19 million tons to 21 million tons. Liquid bulks also went up, by 4.8%, and dry bulk by 9.7%. As part of the efforts to give optimum services, IPC in 2012 took steps to bring the corporation up to international stan-

dard. Before 2012, IPC only had five affiliations. In 2012, IPC formed five new affiliations and has now prepared itself to form at least five more affiliations in 2013. “We want IPC to be a terminal operator capable of giving services. IPC will finally be able to offer end-to-end port solutions,” explained IPC’s Managing Director, R.J. Lino. IPC’s hard work in 2012 has paid off. The Jakarta International Container Terminal (JICT), one of IPC’s affiliations, received an award as the best container terminal in Asia from Asian Freight and Supply and Chain Award (AFSCA) for two consecutive years since 2011. This award was the first in the history of Indonesia’s infrastructure.

AFSCA is an institution founded to give appreciation to companies in infrastructure that show leadership and consistency in their service quality, innovation, customer relations management and reliability. A similar award was given by the Indonesian National Shipowners’ Association (INSA) in 2011. In addition, IPC also received an award in the category of BUMN’s CEO’s Best Innovation in 2011 and 2012. Key to IPC’s success is in its MII

revamping of soft infrastructure and hard infrastructure. Improvement in soft infrastructure was done in handling methods and 24-hour port operation every day. IPC has also applied the use of better ICT in all ports under its responsibility. The improvement of human resources capacity has also been implemented by way of sending its executives to follow overseas master and MBA programs. IPC has sent 100 of its workers to the

best universities in the world and 37 to executive MBA programs in Indonesia organized by Kuhne Logistic German University. In hard infrastructure, IPC has made advances in port facilities and container handling equipment. The use of modern technology like Gantry Jib Crane, QCC Twin Lift and RMCG has been implemented in Panjang Port, Pontianak, Teluk Bayur, Pangkal Balam and Palembang.

Furthermore, IPC also is doing optimization and field configuration and the building of terminal in New Priok in Tanjung Priok Port.

We want IPC to be a terminal operator capable of giving services. IPC will finally be able to offer end-to-end port solutions.” R.J. Lino CEO of IPC

The Nusantara Pendulum System This year, IPC is ready to operate Indonesia Logistics Community Service (ILCS) and Nusantara’s Pendulum system. Through ILCS, the business process will be simpler so as to raise productivity by up to 30-60%. This will affect the dwelling time and will increase Indonesia’s competitiveness in the world of port industry. Other advantages of ILCS is information flow from one port to another, easier delivery of most recent and complete data through e-logistics, safe data transaction, centralized and transparent data access. The ILCS program will complement Indonesia National Single Window (INSW) to improve the quality of Indonesia’s logistics sector. Nusantara’s Pendulum system that is being prepared to be implemented will involve five Indonesian big ports through integrated management. The five ports are Belawan, Tanjung Priok, Tanjung Perak, Makassar and Sorong. This system will accommodate big ships in five main ports and later also small ships serving the areas around the aforementioned main ports. The five ports have been designated as center of goods’ distribution of its surrounding areas. National Pendulum is also an effective solution to prevent empty ships sailing from one place to another. The costs of national logistics will eventually become lower. The implementation of this concept is in accordance with the spirit of wealth distribution, one of IPC’s goals. Meanwhile, IPC is now working together with the World Bank in analyzing the potentials of the National Pendulum to be completely integrated with the government’s effort to improve Indonesia’s logistics system. There are two main studies planned by the World Bank. First, the study to determine which port has the potential to support the implementa-

The Nusantara Pendulum is a move taken by the IPC with Pelindo I, III and IV as part of the National Logistics System (SISLOGNAS) to support the master plan of the Acceleration and Expansion of Indonesia’ Economic Development (MP3EI). Hopefully, it will reduce national logistics costs that are relatively higher than that of other countries. tion of the country’s pendulum and the implementation of national logistics system. Second, the study to identify ways to reduce Indonesia’s logistics costs. The Nusantara Pendulum is a move taken by the IPC with Pelindo I, III and IV as part of the National Logistics System (SISLOGNAS) to support the master plan of the Acceleration and Expansion of Indonesia’ Economic Development (MP3EI). Hopefully, it will reduce national logistics costs that are relatively higher than that of other countries. These studies are meant to contribute ideas to BUMN port service provider to indicate which of the ports need to be prioritized. They also help policy makers to take necessary steps in overcoming high logistics expenses. From the perspective of the World Bank, the research regarding infrastructure is in accordance with the institution’s mission to eradicate poverty, raise the quality of life and promote continuity and comprehensive development. In addition, the studies will relate directly to

a master plan on ports prepared by the government. IPC, as the biggest BUMN in port service, sees the needs of a good port and efficient logistics flow. So the studies will actually show the necessary steps needed to develop ports. Today, Indonesia’s logistic expenditure reaches up to 24% of total Gross Domestic Product (GDP). This study will list all existing infrastructure, including soft and hard infrastructure, owned by ports, shipping lines, customs, transportation services and other logistic sectors. Each sector can be expected to bring down logistics expenses to 15% or even 8% from the total GDP, just like in the United States. IPC under Lino’s leadership realizes that the participation of various stakeholders is needed in order to boost Indonesia’s economic growth. IPC cannot work alone. It needs support from others, including the government. Lino hopes that government policies will always be in accordance with its mission to decrease national logistics expenses and not clash with IPC’s interests. Lino also expresses his wish that the development of the New Priok Terminal will always be the first priority in shaping up Indonesia’s port development, thereby reducing congestion in Tanjung Priok Port. IPC, said Lino, calls on all stakeholders to support improvements and development of ports not only related to administration process but also infrastructure such as accesses to ports. The enhancement of the roads to and from ports and the solving of traffic jams will impact significantly on efforts to optimize improvements in port services. Hopefully, by the end of 2013 there will be a more solid collaboration between IPC and all related institutions in creating a cheaper and reliable national logistics chain. MII

Nusantara’s Pendulum system that is being prepared to be implemented will involve five Indonesian big ports through integrated management. The five ports are Belawan, Tanjung Priok, Tanjung Perak, Makassar and Sorong.

As part of the efforts to give optimum services, IPC in 2012 took steps to bring the corporation up to international standard. Before 2012, IPC only had five affiliations. In 2012, IPC formed five new affiliations and has now prepared itself to form at least five more affiliations in 2013.

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November 2013 Vol. 2 No. 11

Living

How to Deal With Stress at Work huffingtonpost.co.uk

Stress at work is not an uncommon phenomenon. Everyone deals with it on a day-to-day basis. Don’t let the stress get to you. Follow these steps to deal with stress and help yourself live a healthier and happy life.

Not talking about things that bother you would only make them harder to deal with. If your work has been bringing your spirits down or if something’s been bothering you for quite some time now, you need to tell people about it. You could talk to a friend or your spouse. They may not be able to sort your work issues out but they can always help you. A fun day with friends and family is the best way to cope with stress. If

you are friends with your colleagues then you can probably look up to them for advice on dealing with stress.

py and content. Get your mind off of work and start doing things that help you relax.

Explore new horizons

Nobody wants to be stuck doing work on a holiday or during their weekends. While trying to prove your worth in your work space is a common desire, remember that your mind needs rest too. Plan your work according to your preferences. Finish the important task in office itself.

Not everything in your life has to revolve around work. You need to find a way of introducing new and fun activities in your daily routine. You could join a dance class, go to a gym, and learn aerobics and yoga. You can just about do anything under the sun as long as it makes you hap-

Don’t overdo it

Treating Anxiety Throughout the years, there have been many close friends of mine facing anxiety issues, whether it was my college roommate, ex-girlfriends, or myself when relocating cross country for a new job. I never realized how much of an issue it was for most people until recently.

after anxiety attacks. What are anxiety symptoms? Can I learn how to treat anxiety with or without a doctor? Are there cures for anxiety? The first step is to breathe, as impossible as it may seem at the time, being in control of your breathing will help you gain control of yourself more quickly. Taking slow, deep breaths will lower your heart rate and reduce many anxiety symptoms. When anxiety symptoms begin to subside, you are on your way to ending your anxiety attack.

Anxiety Attacks & Symptoms

When figuring out how to treat anxiety attacks or even finding anxiety cures, distracting your mind is another good treatment. Watching something lighthearted on TV, such as a children’s show or a comedy you enjoy, can help distract and calm your mind. Observing your environment and intentionally focusing on things, such as pictures or people around you, helps you to gain control of your mind and hat you think about. Look at colors, clothing, patterns, notice small details you would normally overlook. This mental exercise, along with breathing will help to continue to lessen your anxiety symptoms.

Controlling Anxiety Attacks

Anxiety attacks are scary and can halt your life in its tracks when they strike. Many questions come to mind during and

Treating Anxiety Attacks

Another way to treat your anxiety attack is to simply treat the anxiety symptoms. Taking an anti-nausea medication or another stomach medication can help lessen digestive distress and you can begin to feel better.

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When trying to control or treat anxiety attacks, the first thing to do is determine that you are in fact having an anxiety attack. Anxiety symptoms include, but are not limited to, a pounding or racing heart, a feeling of impending doom or overwhelming fear, lightheadedness, dizziness, nausea, sweating, shaking, tightness in the chest, feeling out of control and many more. Anxiety affects different people in different ways and symptoms can vary from one attack to another. It is important when you experience anxiety symptoms, to know that the symptoms themselves are harmless. They are scary and unsettling, but harmless. Knowing how to treat anxiety attacks is a good start in calming yourself and your mind down to come back to a state of normalcy.

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Anxiety attacks are scary and can halt your life in its tracks when they strike. Many questions come to mind during and after anxiety attacks. What are anxiety symptoms? Can I learn how to treat anxiety with or without a doctor? Are there cures for anxiety? These questions are all valid and have been tackled by many different people. There are numerous sources of information available on the web concerning anxiety and what to do about it. In discussing the above questions, I remind anyone that reads this article, the best thing to do is consult with your doctor.

A doctor can also help you learn how to treat anxiety attacks with therapy or even medications. Sometimes, simply having a therapist to talk to can help to find the source of your anxiety and you can begin to work on avoiding or better managing the trigger. Doctors may also prescribe medications to help with the chemical imbalance in the brain that causes anxiety disorder in many people. Sometimes, taking a multivitamin can help over the long run to lessen the occurrence of anxiety attacks and anxiety symptoms. Anxiety attacks can happen to anyone, the important thing to remember is that they are manageable and they do not have to ruin your life. Many people who suffer from anxiety attacks have found numerous ways to treat them. Learning how to treat anxiety attacks in your own life and what works best for you will take time. One question that anyone who has suffered from anxiety attacks can ask is, are there cures for anxiety?

Cures

The good news is that there are cures for anxiety that you can administer at home. Drinking chamomile tea or taking chamomile can help to calm your body and mind. Chamomile is a relaxing herb and can be used as a cure for your anxiety. Hops are also used as a cure for anxiety at home. That’s right, have a beer and relax, it is true. Hops are not to be used if you are depressed. St. John’s Wart is good for long-term cures for anxiety. It helps to calm the mind and ease mood swings. Medicinal cures for anxiety include serotonin reuptake inhibitors such as Zoloft that help to balance the chemicals in your brain. You can be treated and then weaned off of these drugs with a doctor’s supervision. The most important thing to remember when discovering how to treat anxiety or looking for cures for anxiety are that anxiety is just fear. You can discover your triggers and the treatments that work best for you with time and trial. NYTimes

Don’t let your work haunt your weekends. Before you take up some extra work, consider your work load and think about your time management. If you still think you can finish your work by the end of the day then accept it.

Leave your work at the office

It is not okay to bring your work home. Never let your professional life invade your personal life. No matter what, when you are at home give time to people

who really matter. Don’t let your work decide how your relationships function. Spending time with people who love you is therapeutic and relaxing. So remember to give these people enough time on days you don’t go to office. If your work is really getting the monster inside you out then its time you take a holiday from your daily routine. Go bag packing with friends or simply plan a family trip. NYTimes

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Share your feelings with people

Don’t work during breaks and don’t talk about work outside of your office. Leave your work right where it belongs, at your desk.

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Poking around in the petunias, fixing the car or puttering around on other hobbies can cut the risk of a heart attack or stroke by more than a quarter among people 60 and older, researchers said Tuesday. A study published in the British Journal of Sports Medicine tracked the behavior and health of nearly 4,000 people 60 and older in Stockholm for about 12 1/2 years, starting in 1997. Specifically, the researchers looked at something called NEPA, or non-exercise physical activity. That means gardening or DIY projects as opposed to formal exercise. And in people 60 and older, that kind of activity is as good as exercise -- as long as there’s enough of it and it’s vigorous enough, the researchers said. “The most feasible approach to reduce sedentary time is to promote NEPAs,” the researchers said. “This is particularly important for older adults as they tend to sit more com-

Focus on ‘Me’ time

Most people lose themselves to their job. If your work gets the better of you, give yourself some time off. Take a few minutes every hour from your busy schedule to relax and let your mind breathe. Don’t work during breaks and don’t talk about work outside of your office. Leave your work right where it belongs, at your desk. Don’t have conversations with people who only seem to talk about work. It doesn’t matter how much time you put aside for yourself as long as you relieve yourself from stress.

Study: Gardening, Hobbies can Keep Older People Heart-healthy pared to other age groups.” At the start of the study, those who had active lives had a lower risk for heart problems -- no matter their level of formal exercise, the researchers said. They also had smaller waists and lower levels of such markers as harmful blood sugar. The participants were asked about activities common in Swedish culture: performing home repairs, cutting the lawn, car maintenance, skiing, hunting and gathering mushrooms or berries, among others. Those who took part in formal exercise were also in good shape, but that wasn’t necessary, the researchers said. The people with the highest level of activity had an overall 27% lower risk of a heart attack or stroke and a 30% lower risk of death from all causes, compared with the most sedentary people. During the 12 1/2 years, 476 people had a heart attack and 383 died, of all causes. Why? The researchers suggested that sitting all day lowers the metabolic rate to the minimum, while standing and moving increase it. And using muscles also probably plays a role, they said. Public health authorities say people should engage in at least 150 minutes a week of moderate to vigorous activity. At the same time, researchers say, lots of sitting has been found to increase the risk of several diseases.

November 2013 Vol. 2 No. 11

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Health thebestyoumagazine.co

The 10,000-step daily goal originated decades ago in Japan and has gained momentum in recent years in the United States, in part thanks to all the cool little tracking devices on the market. But many experts are looking at our walks in another way that could be easier to track and less intimidating: Walk for 30 minutes, five days a week.

t a time when many Americans spend their days exercising nothing but their thumbs to exhaustion, others have grown obsessed with steps. Ten thousand steps is about five miles, depending on the stride, a distance that seems shorter when you start adding in every step from waking to sleeping. Still, many people barely log 3,000 steps per day. You’d have to live in another galaxy to have missed the admonition to walk for health, to counter our sedentary jobs and hobbies: Walk the dog, park far from the store, take the stairs, schedule a walking meeting. It’s exercise that’s accessible to most people in most places. It improves cardiovascular health, strengthens bones and boosts mood. It uses calories. And it’s simple. The 10,000-step daily goal originated decades ago in Japan and has gained momentum in recent years in the United States, in part thanks to all the cool little tracking devices on the market. But many experts are looking at our walks in another way that could be easier to track and less intimidating: Walk for 30 minutes, five days a week. (One half-hour walk on its own is significantly less than 10,000 steps.) Either way you measure it, health officials say, is fine. The point is to get up and move. “When we began to test [walking 30 minutes a day] in our workforce, we had people telling

us they were able to track it without a special device. It was fun, they could do it with co-workers,” says Kathy Gerwig, who leads the healthy workforce programs for Kaiser Permanente, including one called KP Walks. Walking 30 minutes a day seemed like more than just a good idea to Bob Sallis, a family doctor who has been president of the American College of Sports Medicine. The benefits of exercise seemed as good as medicine. “If someone did a study of a drug that had some of these benefits, it would be the standard of care to prescribe it,” says Sallis, spokesman for the national program Every Body Walk! (www. everybodywalk.org) Time or steps, monitoring and immediate feedback seem to be essential. “The 10,000 steps is really intended for people whose primary activity is walking. These are the people who, when they get up in the morning, they strap the pedometer on,” says Steve Farrell, science officer in the division of education at the Cooper Institute, a nonprofit preventive medicine institute in Dallas. He is not a step counter; he likes to swim and bike. James Hill, the founding executive director of the Anschutz Health and Wellness Center at the University of Colorado and coauthor of the book “State of Slim,” says 10,000 would be great — if people actually stepped that many steps, something too few of us do.

Walking Can Reach Health Goals Walking is exercise that’s accessible to most people in most places. It improves cardiovascular health, strengthens bones and boosts mood. It uses calories. And it’s simple.

To get to 10,000 in a day usually takes planning. When I got a fancy tracking device called Fitbit, I was surprised how easy it was to hit the 3,000 or 4,000 mark just going about my routine, even in drive-everywhere Los Angeles. Without jogging, though, I’d rarely get to 10,000. Cheap pedometers can do that just fine, but the tech crowd is enamored with accelerometers: BodyBugg, UP or one of the products from at least a dozen

Weight-loss Fads Can be Bad for Your Health There’s something about fall — with its back-to-school, newstart feeling — that compels many of us to revisit our plans to diet, and sometimes those plans involve fads. Even celebrities who can afford the best personal trainers, nutritionists, doctors, therapists and private chefs are susceptible to diet gimmicks. And when “Hunger Games” star Jennifer Lawrence says that by Hollywood standards she’s “obese,” something’s wrong. “Women across America are weight-crazed, but women in L.A. are probably more so,” says Paulette Lambert, director of nutrition at the California Health & Longevity Institute, a medical and fitness center in Westlake Village. “My patients who fly in to New York from L.A. are so different from my usual patients,” says Dr. Macrene Alexiades-Armenakas, assistant clinical professor at Yale University School of Medicine and director of the Dermatology and Laser Surgery Center in New York. “They’re like ‘Get me to where I need to be [weight-wise] at all costs.’ “ “Diet fads seem to cycle back around about once every 10 or 12 years. Long enough for people to try a fad diet, see that it doesn’t work, forget that it doesn’t work, then try it all over again. Sometimes these diets are just repackages with different names,” Lambert says. Here, experts share warnings about some fads and weight-loss treatments.

The potato diet

If a diet sounds too wacky to make sense (here’s looking at you, baby food diet, cabbage soup diet, air diet), it probably doesn’t. Dr. Adrienne Youdim, medical director of the Center for Weight Loss at Cedars-Sinai Medical Center, says a diet of just potatoes (and the occasional tea-

cakechooser.com

People with celiac disease cannot eat gluten without getting sick, but cutting out gluten has also become a diet trend, and Lambert says they’d do well to consider eating some whole grains.

HCG and other injections

spoon of fat) is missing key nutrients. “It also has a high glycemic index and raises blood sugar quickly … problematic for diabetics. Whenever you limit intake to one food item, overall intake is reduced … so weight loss ensues.” Besides, Lambert says, eating 1,200 calories’ worth of potatoes per day or 1,200 calories in a well-rounded diet would lead to the same weight loss.

Juicing

“Juicing is everywhere right now, which I don’t like, because juicing is high in sugar and increases insulin levels,” Lambert says. Fitness expert Harley Pasternak, who’s worked with Lady Gaga, Jennifer Hudson and Natalie Portman, says, “Any cleanse where you’re not getting all of your essential nutrients, including fiber, protein and the healthy fats your body needs to exist, heal and thrive, and you’re consuming a sub-healthy level of calories, is just bad for you. ... Short-term starvation diets are masking themselves as detox diets.”

Gluten-free diets

“People lose weight when they go off gluten because it cuts out a lot of junk food,” Lambert says. “But there’s a lot of gluten-free junk food out there too.” Many gluten-free versions of foods that normally contain wheat tend to be high in sugar, low in fiber. It’s fine to cut out cookies, cakes, pasta and pizza — all of which normally contain gluten, Lambert says.

“The HCG shot is back up again,” says Lambert, who mainly credits the weight loss that people report on the HCG regimen to the 500calories-a-day diet that often accompanies it. HCG is human chorionic gonadotropin, a hormone produced during pregnancy, Alexiades-Armenakas says. The hormone is sometimes used (or is merely claimed to be used) in injections to help weight loss. According to the Mayo Clinic, the diet is neither safe nor effective. And the Food and Drug Administration has warned against HCG injection diets since the 1970s. “FDA-approved uses for prescription HCG products include female fertility and select hormonal treatment in males, and the FDA has not approved prescription HCG for any other uses, including weight loss,” FDA spokeswoman Christopher Kelly says. “FDA has received reports of HCG injections for weight-loss associated with pulmonary embolism, depression, cerebrovascular issues, cardiac arrest and even death.” Other injections used to lose weight can be problematic too. In 2010, the U.S. Food and Drug Administration issued warning letters to six U.S. medical spas saying they were making false and misleading claims about injections they said eliminated fat. The overall safety of such socalled lipodissolve products is unknown, the FDA says. Often “you don’t know what they use in those injections, and you can have significant allergic reactions,” Youdim says. latimes.com

companies. They also measure intensity, count calories and provide motivation, Farrell says. If you are ready to walk, what should you do once you have comfortable walking shoes? • Consider whether the goal is good health, weight loss or improved athletic performance. As Farrell says, exercise is, to a point, dose responsive. To be in good health, experts recommend a minimum of 150 minutes a week at moderate

intensity (and not all on the weekend). • For weight loss, experts recommend 300 minutes a week of moderate activity or 150 minutes of vigorous activity in addition to a healthful diet of appropriate portions. Work toward the goal. For someone getting in 5,000 steps a day, maybe 7,000 is an intermediate goal, Hill says. Then keep moving up, gradually, to 10,000. Five minutes of

nonstop walking is about 500 steps, he says. • It helps to walk with vigor. Move your arms. Stand up straight. After all, getting from the kitchen sink to the bedroom, unless you live in a castle, is not going to do much good. • The pace should be fast enough that it’s hard to sing, slow enough that it’s reasonable to talk, Gerwig says. “Strolling down a grocery store

aisle is not what we’re talking about.” • Log it, however you choose. “Psychologists tell us that people who keep track, those are the people who are most successful with behavior change long-term,” Farrell says. • Meeting the goal doesn’t mean it’s OK to sit the rest of the day. “You may cancel out some of those benefits,” Sallis says. “Get up as much as you can.” latimes.com

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November 2013 Vol. 2 No. 11

Travel

Traces of Sunan in the City of “Kretek” In medieval times, Kudus was the center of the development of Islam in Indonesia, particularly in Central Java, as characterized by the presence of three “Sunan” (saint) tombs, who spread the teachings of Islam in those days. The three saints were Sunan Kudus, Sunan Muria and Sunan Kedu. Therefore kudus is also nicknamed the city of “Wali” or saint and the city of “Santri” or students. Text & Photos: Iqbal Alaik

t was a fine day for me to start my journey to a city full of Islamic atmosphere. The city is located 51 kilometers to the east of Semarang. The Kudus (holy) city is famous for its kudus soup “Soto Kudus”. With my stomach starting to growl, I decided to stop at one of the soup stalls for lunch and a short break. Yummy! The chicken soup which was served in a small bowl was very delicious because it was added with drops of lemon juice and chili plus the quill egg skewers that characterize this soup. Kudus is not only known for its soup but also for “kretek” cigarettes. Several large companies such as cigarette producers Djarum, Sukun and Jambu Bol set up their factories in this city and made it as the biggest cigarette producer in Central Java. In medieval times, Kudus was the center of the development of Islam in Indonesia, particularly in Central Java, as characterized by the presence of three “Sunan” (saint) tombs, who spread the teachings of Islam in those days. The three saints were Sunan Kudus, Sunan Muria and Sunan Kedu. Therefore kudus is also nicknamed the city of “Wali” or saint and the city of “Santri” or students. This time I went to the grave of Sunan Kudus, which was located not far from the town square, precisely in the Kauman village. This tomb has become one of the main attractions for religious followers as each day hundreds to thousands of people would come to visit the tomb. The parking spaces were reserved for pilgrims who came with vehicles. I had to walk about 300 meters to reach the destination, through the stalls of vendors which were lined up neatly on the side of the

road. The stalls sold various knick-knacks such as prayer beads, caps, robes and turban. Traders also sold a variety of souvenirs such as the replica of the Kudus city, Kudus tower and also snacks that typically only come from Kudus such as “Jenang” and “Dodol”. The Tomb of Sunan Kudus is located in the complex of the Menara Mosque. The mosque is also called the Al- Aqsa mosque or the mosque of Al-Manar, It was built in 1549 AD or 956 AH (Islamic calendar) by Sunan Kudus using stones from Baitul Maqdis of Palestine as its first stones. Its architecture is unique because this mosque has an 18-meter tower shaped like a temple. The legs and body of the tower were built with traditional Javanese-Hindu motifs. These characteristics are evident from the bricks that did not use adhesive cement. This is a method of propagation implemented by Sunan Kudus and the Wali Songo who blended the teachings of Islam with Hindu culture that had been embraced by the majority of the population at that time. The intention was to make Islam accepted easily. And, yes, the mosque is a symbol of the blend between Islam and the Hindu culture. The grave of the Sunan Kudus is located next to the tower. An arch-shaped gate marks the entrance. There were groups of pilgrims who also entered the gate. I followed them to the tomb and passed several graves along the way. When I reached the tomb, there were already dozens of other pilgrims around the tomb, praying or reciting the holy Koran. Sunan Kudus’s tomb was covered by white nets to prevent people from directly siting at the tomb. However, this did not discourage pilgrims from coming all the way to the tomb.

November 2013 Vol. 2 No. 11

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Golf

New Kuta Golf The Charms of a Seaside Golf Course floragolf.co.id

Bali is not only famous for its tourism charms; it also has a fascinating worldstandard golf course, the New Kuta Golf (NKG) at Pecatu, Jimbaran.

he New Kuta Golf is new and is set on 85 hectares of land right on a limestone cliff offering a stunning view of the Indian Ocean. It is a great golf course with 18 holes, a 20minute drive from Bali’s International Airport to the southern part of Bali that is blessed with magnificent sunsets. The New Kuta Golf is designed with four of tees for each of the 18 holes; there’s enough variety to ensure satisfaction for all skill levels. The golf course will invite you to experience a championship layout first hand. The greens are planted with smoothrolling ultra dwarf Bermuda grass. The surrounding rugged terrain reminds many of what they might find in the American Southwest, Tunisia, or drier portions of South Africa. The course was opened in 2008 and designed by the Golfplan team of Ronald Fream, David Dale and Kevin Ramsey, and is noted for a couple of holes on the back nine that overlook a particularly attractive seaside area known as the Dreamland

The New Kuta Golf is designed with four of tees for each of the 18 holes; there’s enough variety to ensure satisfaction for all skill levels. The golf course will invite you to experience a championship layout first hand.

beach. The cliff-side par three 15th is the signature hole here, and quite an attractive proposition, especially when compared with the rest of the golf on offer. The course is the centerpiece of a resort development that will eventually boast hotels, villas, restaurants and shops. The Ritz Carlton and Four Seasons Jimbaran Bay are already nearby; both have arrangements for guests to play at New Kuta. In terms of the actual design here, the front nine plays away from the sea into gentle uplands marked by ridges and rock outcroppings. The par-5 2nd hole is a roller-coaster ride of undu-

lations, punctuated by a green that falls off steeply into a gulch. The back nine at New Kuta plays downhill to the Indian Ocean, where white limestone cliffs (some 60 meters high) separate golfers from the sunbathers and surfers on Balangan Beach. Holes 14 to 16 — all of which play along the cliff-edge — are among the most picturesque in world golf. Totally exposed to the ocean winds, they’re also among the most demanding. The elegant par-5 18th finishes (as does the 9th) just a few yards from the shaded patio serving New Kuta’s magnificent clubhouse, where the formidable Links Restaurant & Bar (and

the club’s dedicated spa) make it an ideal place to relax after the round. The New Kuta Golf also sets itself apart with a commitment to game improvement. The Golf Academy Bali (GCB) was opened here in January 2013 under the direction of the British PGA professional Neil Douglas. With its covered, grass driving range, expansive short-game area, and 9000-square-foot putting green, New Kuta’s facilities are state of the art. Douglas’ fully credentialed GCB staff is equipped to provide individual and group instruction, along with video swing analysis, custom club fitting and equipment checks.

The course was opened in 2008 and designed by the Golfplan team of Ronald Fream, David Dale and Kevin Ramsey, and is noted for a couple of holes on the back nine that overlook a particularly attractive seaside area known as the Dreamland beach. The cliffside par three 15th is the signature hole here, and quite an attractive proposition, especially when compared with the rest of the golf on offer.