Air Strip to be Built in Miangas

Tuesday, 24 February, 2009 | 12:57 WIB 

TEMPO Interactive, Jakarta:The government will build an air strip on Miangas Island, Talaud Archipelago, North Sulawesi, in order to make the island less isolated. 

This was conveyed by Juwono during a meeting with the House of Representatives’ Defense Commission in Jakarta yesterday. 

The air strip is expected to support the logistics and transportation of the Indonesian Armed Forces’ daily operations. 

The construction of the air strip was proposed by the Indonesian Armed Forces to the Transportation Department. 

The construction is also intended to manage and secure the smaller islands. 

Titis Setianingtyas

Central Java to host 2011 SEA Games

Suherdjoko, The Jakarta Post, Jakarta | Tue, 02/24/2009 5:35 PM  |  Sports 

The Central Java province, alongside West Java and South Sumatra will be hosting the Southeast Asia (SEA) Games in 2011, National Sports Council (KONI) chairman Rita Subowo said. 

"We will suggest Candi Borobudur as the 2011 SEA Games logo. Candi Borobudur represents the spirit of the nation. Our ancestors were able to work together in building the massive temple, a spirit to uphold," Subowo told The Jakarta Post. 

She said the Central KONI committee would discuss the idea with the KONI committees of West Java and South Sumatera. 

"We nead to regain glory in Southeast Asia," Subowo added, referring to Indonesia's decreasing sportmanship after the Asian economic and political crisis. 

According Subowo, at least three sporting competitions would take place in Central Java, namely bilyard, sepak takraw and shooting. 

"We deliberately chose sports that have taken root in the regions and carry the potential to develop with a sporting event like SEA Games," she said. 

Central Java KONI chairman Soediro Atmoprawiro added that there were several other sporting events that can take place in Central Java: wall-climbing, archery, athletics, swimming and traditional martial arts 'pencak silat'. 

"We're currently building a new stadium equipped with various sporting facilities in Salatiga based on funds provided by the Minister of Health," Atmoprawiro said. 

No mentioning has yet been made as regard the total budget allocated for the event, "we're still in process of discussing it," Subowo said. (amr)

Neighboring industry

The Jakarta Post   |  Tue, 02/24/2009 5:32 PM
 

 Energy and Mineral Resources Minister Purnomo Yusgiantoro (2nd right), accompanied by Australia’s ambassador to Indonesia, Bill Farmer (left) visiting an exhibition stand at the OZMINE 2009, an exhibition on Australia’s mining industry, in Jakarta on Tuesday. (JP/R. Berto Wedhatama)

Retail sukuk bonds a hit with investors

Aditya Suharmoko, THE JAKARTA POST, JAKARTA | Tue, 02/24/2009 10:54 AM  

The volume of  the new government retail sukuk (Islamic bonds) absorbed by individual investors is exceeding government expectations. 

That was according to official figures released by the Finance Ministry on Monday. 

The government managed to book orders of up to Rp 5.56 trillion (US$ 496.4 million) of retail sukuk in less than a month, or about 3 times its initial target of Rp 1.77 trillion as originally submitted by 13 designated selling agents. 

“It’s an example of how dynamic the financial market conditions are ... “ Finance Minister Sri Mulyani Indrawati said in a press conference. 

It was the first retail sukuk bond ever issued by the government.

 

 JP/IRMA

The selling agents are Bank Mandiri, Bank Syariah Mandiri, Citibank N.A., HSBC and Bank BII, as well as Danareksa Sekuritas, CIMB-GK Securities Indonesia, Reliance Sekuritas, Trimegah Securities, Andalan Artha Advisindo Sekuritas, Anugerah Securindo Indah, BNI Securities, and Bahana Securities. 

They had set a low target taking into account potential concerns of  investors over financial instruments during a financial downturn. 

“We’ll sell our bonds as long as the price is rational, and the profile won’t burden the state budget. We’ll always cope with the dynamic market conditions,” Mul-yani added. 

The retail sukuk is part of the government’s effort to plug the budget deficit, which is forecast to reach Rp 136.9 trillion, or 2.6 percent of the gross domestic product, this year. 

According to the Finance Ministry, 14,295 investors have so far ordered retail sukuk, 42 percent of whom are residing in Jakarta. 

A large proportion of these investors, 46 percent of them, ordered a retail sukuk purchase of less than Rp 100 million in total. 

The retail sukuk is sold at Rp 1 million per unit, with a minimum purchase of Rp 5 million. The yield is 12 percent, maturing on Feb. 25, 2012. 

Most of the investors are working as civil servants, private employees, housewives and entrepreneurs. Private employees ordered the largest bulk of purchases, equivalent to about 39 percent of the total volume of the retail sukuk, so far. 

Mulyani said the largest single purchase of retail sukuk amounted to Rp 35.3 billion, while the lowest single purchase was Rp 5 million. 

The Finance Ministry named Mandiri and HSBC as the best selling banking outlets, and then Trimegah and Andalan Artha as the best securities outlets. 

The retail sukuk will be on offer until Feb. 25. It can then be traded after being listed on the

Indonesian stock exchange as of Feb. 26. 

The government is still also considering selling international sukuk bonds and medium term notes (MTN) in the coming months. 

Bond issues are a government  option for securing funds to help cover the state budget deficit.

Japan textile market to grow

The Jakarta Post, JAKARTA | Tue, 02/24/2009 11:04 AM 

The textile sector may double its market share in Japan by 2010, helped by the Indonesia-Japan economic partnership agreement (EPA). 

“Our exports to Japan in 2008 were around US$650 million, we hope that the value will increase to around  $1 billion to $1.5 billion by the end of 2010,” Industry Ministry’s director general for metal, machinery, textile and miscellaneous industries, Ansari Bukhari said Monday.

 

JP/IRMA

He was speaking at a seminar on the Indonesia-Japan EPA. 

The value of last year’s textile exports to Japan was about 7.8 percent higher than the one recorded in 2007, which was about $603 million. 

As for the target for 2009, the industry targets exports to Japan will reach around $700 million.

The Indonesian Textile Association (API) hopes that the IJ-EPA, a free trade agreement between the two countries signed last year, will facilitate that Indonesia’s textile industry can achieve ambitious targets even during difficult times. 

“We hope that with the IJ-EPA (in place), it will be easier for us to take a greater share of  the Japanese market, now dominated by China,”  API chairman Benny Soetrisno said. 

Ministry data shows China  dominating the Japanese textile market with a market share over 75 percent. 

Benny also hopes that with IJ-EPA the Japanese government can help Indonesian textile business owners to access credit to help fund capital expenditure on Japanese machinery and technology, especially as Japanese textile machinery exports declined by more than 25 percent last year due to the crisis. 

“Japan needs to provide us with better payment schemes to rehabilitate our textile machinery. In return, Japan will be able to improve its machinery exports and prevent employee dismissals,” Benny said. 

In common with Japanese industry, the textile industry in Indonesia faces a less than favorable period, but the IJ-EPA gives an advantage. 

Industry Minister Fahmi Idris said textile exports would certainly decline overall during the crisis.

“It is very likely that the industry’s  overall volume of exports will decline in 2009 because of the global crisis, but hopefully the value of exports will not fall below $8 billion.”  

The value of the country’s textile exports was estimated at US$10.8 billion last year (2008), a modest improvement on the $10.3 billion recorded in 2007.  

“Japan is the third largest importer of our textiles after the US and the EU countries. There will always be a need for clothing in four-season countries like Japan. We also believe we will still be able to export our products to (EU and US), but not as much as we used to,” Fahmi said. 

“To improve our market share in the Japanese market, we need to improve our market research as well. Japanese consumers have high standards on quality and designs, and their tastes change constantly.”  

It was felt the IJ-EPA, along with access to special credits, would favor greater exports to Japan even if exports to the EU and US might fall. 

Fahmi said the government is also looking at new markets in the countries of the Middle-East region. “The crisis impact is not so severe in the oil rich countries,” he said. (hdt)

Indonesia: World Bank-administered GPOBA Supports Expansion of Piped Water Supply to Surabaya’s Poor

The Worldbank, News Release No. 2009/2 

Washington D.C., February 20, 2009 – The World Bank, acting as administrator for the Global Partnership on Output-Based Aid (GPOBA), signed a grant agreement with the Republic of Indonesia for US$2.4 million to increase access to piped water networks for poor households living in Surabaya. 

Up to 15,500 households or 77,500 people are expected to benefit from the scheme through new household connections, including bulk supply or “master meter” connections for particularly poor, dense or informal communities not otherwise eligible for household supply. 

“The GPOBA project will assist Indonesia towards achieving the Millennium Development Goal for water by specifically targeting those households that are least able to afford connection fees and network expansion,” said Joachim von Amsberg, World Bank Country Director for Indonesia. “The benefits for these families will include improvements in health and savings from a reduction in the cost of water.” 

Currently, only 17 percent of households in Indonesia have access to piped water. Many families rely on wells, but use of such sources is becoming increasingly unsustainable due to contamination of shallow groundwater sources and over-pumping of deep wells. Many poor households also buy water from vendors and neighbors with piped-water supply, but this can cost them more than 20 percent of their income. While piped water is more affordable, steep connection charges constitute a barrier to entry for the poor. 

“Surabaya has shown clear commitment to connecting the poor and the GPOBA project demonstrates an innovative master meter approach for informal settlements, where individual household connections are not viable,” said Maurin Sitorus, Director of Funds at the Indonesian Ministry of Finance. “Providing service through bulk supply, and enabling communities to manage their own distribution networks, metering, billing, and collection is a new approach to service delivery that has not been tested before in Surabaya. Successful implementation of these schemes could have a very powerful impact on city leaders and PDAM managers.” 

Thanks to the GPOBA subsidy, the connection fee for poor households in the target areas will be US$33 (payable over three months) instead of the usual price of US$66-260. The project will be implemented jointly by the Ministry of Public Works, the local government, and the public water utility of Surabaya (PDAM Surabaya) which has shown a strong commitment to expanding the water network to the city’s poor neighborhoods. In line with the output-based approach, most of the GPOBA subsidy will be paid to PDAM Surabaya only after the services have been delivered and verified by an independent agent. 

“We hope this project will have a demonstration effect that will enable scaling-up and replication throughout Indonesia’s more than 300 public utilities, and help the country to increase the proportion of people with sustainable access to safe drinking water,” said Suhail J. S. Jme'An, Senior Financial Analyst, and Yoonhee Kim, Urban Economist, World Bank Team Leaders for the project. 

The GPOBA project will draw on funds from the UK’s Department for International Development. Additional funding will come from PDAM Surabaya, the United States Agency for International Development (USAID), and user contributions. 

Available in: Bahasa (Indonesian)

Contacts:

In Washington:

Cathy Russell, tel. (+1) 202 458 8124, crussell@worldbank.org 

In Jakarta:

Randy Salim, tel. (+62) 21 5299 3259,  rsalim1@worldbank.org 

 

RI, Netherlands ink 11 deals on legal affairs

The Jakarta Post, Jakarta | Mon, 02/23/2009 10:19 PM 

Justice meeting: Netherlands Justice Minister Ernst Hirsch Ballin (center) speaks during a meeting with his Indonesian counterpart Andi Mattalata in Jakarta on Monday. Ballin was accompanied by Netherlands Ambassador to Indonesia Nikolas Van Dam (right). JP/Ricky Yudhistira.
 

Indonesia and the Netherlands have signed 11 memorandum of understanding on legal deals and pledged to work together to combat any international crimes, tempointeraktif.com reports. 

The 11 deals include cooperatives on human rights, immigration, intellectual rights, human resources development and public legal administration. 

After the dealing signature with the Netherlands Justice Minister Justice EMH Hirsch Baillin, Justice and Human Rights Ministry Andi Mattalatta said that he was expecting that all legal enforcers could learn on the agreement and apply the Netherlands good legal system in Indonesia. 

“We have agreed to form joint committee involving students from the Netherlands and local students from Padjajaran University and University of Indonesia,” he said. 

This agreement was aimed at renewing similar cooperatives by both countries in 1995 and is valid until 2014. (ewd)

Indonesia and Australia to Collaborate in Agriculture

Monday, 23 February, 2009 | 11:41 WIB 

TEMPO Interactive, Sydney:The Indonesian and Australia governments have agreed to reinforce their trade and investment relations as well as building capacity, especially in the agriculture sector. 

The agreement was achieved in the Eighth Trade Minister Meeting in Sydney, Australia, last week. 

Trade Minister Mari Elka Pangestu met with Australian Trade Minister, Simon Crean, at the occasion and discussed about improving bilateral relations and investments. 

The ASEAN-Australia-New Zealand free trade agreement/FTA was signed last week in Bangkok, Thailand. 

Indonesia and Australia have agreed to build capacity by focusing on the agricultural sector, including improving the beef and dairy product industry, which is in line with Indonesia’s priority in the sector of food security. 

Mari and Crean also received FTA’s final draft on Indonesia-Australia joint feasibility study. 

NIEKE INDRIETTA

PGE to invest US$130 mln in geothermal power projects

Jakarta (ANTARA News/Asia Pulse) - PT Pertamina Geothermal Energy (PGE) has said it will spend US$130 million this year to finance development of a number of geothermal power projects. 

PGE President Abadi Poernomo said the subsidiary of state oil and gas company PT Pertamina was now developing the Ulu Belu geothermal power project in Lumut Balai and the fifth and sixth units of the Lahendong geothermal power plants in North Sulawesi. 

Poernomo said that PGE was carrying out feasibility studies before seeking a loan fund from the World Bank to finance the project.

AirAsia Offers Free Seats For Four New Routes

KUALA LUMPUR, Feb 23 (Bernama) -- AirAsia is giving away free seats to mark the launch of four new routes -- Bali-Singapore, Bandung-Singapore, Jakarta-Singapore and Yogyakarta-Singapore. 

The booking is open for travel from Feb 24 till Feb 28 for travel between March 24 and Jan 31, 2010. Booking is also available online via the website www.airasia.com 

The four new routes further enhances AirAsia's present vast network, especially across the Asean region. 

With brand new routes being constantly introduced, countries across the region are efficiently connected with each other and the rest of the world through the budget carriers' hubs in Malaysia, Indonesia and Thailand. 

Indonesia AirAsia chief executive officer Dharmadi said: "These new routes are a significant achievement for us as it signifies our drive and commitment in expanding our network, providing an extensive choice of destinations to our guests." 

"For a start, there will be one daily direct flight from Bali, Bandung and Yogyakarta to Singapore and two daily direct flights from Jakarta to Singapore. 

"With these new routes, more people in Indonesia will get to enjoy accessibility to Singapore. Through our extensive network, covering over 114 routes and 64 destinations, it opens the door to other destinations in the Asean region, Japan, China, Australia and Europe," he said. 

The new routes will be operated by AirAsia's Indonesian operations, currently the only airline flying the Bandung-Singapore route and the first low- fare airline to service the Yogyakarta-Singapore route. 

AirAsia Regional Head of Commercial Kathleen Tan said: "It is also convenient for Indonesians to visit Singapore, renowned as a shopping paradise, leisure centre and food haven. 

"The daily direct flights from out of four Indonesian cities will definitely enhance accessibility for the republic and continue to attract guests with our low fares and innovative services. 

"This enhanced passenger traffic will definitely boost tourism and stimulate local economies between Indonesia and Singapore," she added.

Five Asean Exchanges To Begin Electronic Trading

By D. Arul Rajoo, Bernama, February 23, 2009 19:28 PM 

BANGKOK, Feb 23 (Bernama) -- Malaysian investors can purchase directly trade stocks listed in Singapore, Thailand, the Philippines and Indonesia once the proposed Asian trading board starts operation next year. 

Bursa Malaysia Bhd's chief executive officer, Datuk Yusli Mohamed Yusoff, said the multilateral trading gateways was a result of more than one year of groundwork by a working group comprising all the five stock exchanges whose bourse capitalisation size was estimated to be more than US$1 trillion. 

Yusli said the Asean stock exchange was primarily an electronic linkages that would allow investors from other Asean countries to buy or sell Asean-listed securities through their local brokers. 

"Forging closer cooperation among regional exchanges is crucial for us to remain globally relevant. This will encourage greater intra-Asean trading and an integrated Asean capital market will raise the profile of this region's securities to the global investment community," he said. 

Yusri was speaking after a memorandum of understanding (MoU) signing ceremony between the five exchanges which was witnessed by Thai Finance Minister, Korn Chatikavani, here Monday. 

Bursa Malaysia, Indonesia Stock Exchange, Philippine Stock Exchange Inc, Singapore Exchange and the Stock Exchange of Thailand (SET) signed the MOU to form an Asean electronic trading link to enhance the competitiveness of their capital markets. 

Yusri said the e-trading link, through one single access point, allows intra-Asean cross border trading and would attract more international funds into Asean. 

"The next step after signing of the MOU is to work with technology partner to see how the tradings can be done. Eventually, an investor can invest in another country's exchange without having to call broker in that country," he said. 

According to him, this was the first time such linkages among separate owners are being introduced in the region, adding that similar and much more advanced concept exist in Europe but involves common ownerships. 

Earlier this month, Nongram Wongwanich, chief operation officer of SET, had said the collaboration would start with first bilateral stock trading either between SET and SGX or SET and the Bursa Malaysia as these three stock markets have the most readiness in terms of system. 

She had said that the second bilateral stock trading would start three months after the first one. 

In his speech, Korn said a stronger, integrated and more competitive Asean was necessary to respond to the changing global landscape. 

"Offering a single platform is a starting point to achieve our 2015 vision of a more integrated Asean capital market with harmonised rules, regulations and practices", he said.

Japan guarantees RI’s first samurai bond

Rendi A. Witular ,   THE JAKARTA POST ,   PHUKET, THAILAND  |  Mon, 02/23/2009 10:55 AM  

In agreement: Finance Minister Sri Mulyani Indrawati (right) and Japanese Parliamentary Secretary for Finance Shinsuke Suematsu shake hands after signing a financial sector deal in the Thai resort island of Phuket on Saturday. JP/Rendi A. Witular

Japan agreed Saturday to provide financial support worth US$1.5 billion for guaranteeing Indonesia’s planned yen-denominated bond, known as the samurai bond. 

Finance Minister Sri Mulyani Indrawati and Japanese Parliamentary Secretary for Finance Shinsuke Suematsu forged the guarantee deal during the special ASEAN+3 Finance Minister’s meeting in the Thai resort island of Phuket. 

Mulyani said the bond, which would be Indonesia’s first ever, was aimed at helping the government plug this year’s widening budget shortfall after it planned to unload more funds to stimulate the economy amid the global economic hard times. 

“The fund will be provided in the form of a guarantee by the Japanese Bank for International Cooperation (JBIC) to the Indonesian government in issuing yen-denominated foreign bonds in the Japanese capital market,” Mulyani said. 

“Under the deal, if the bond fails to lure the appetite of Japanese investors, and the yield is deemed too expensive for the Indonesian government to bear, Japan can convert the fund into ordinary loans to help cover the budget deficit.” 

Mulyani could not provide the exact timing for the issue, saying it would depend primarily on the condition of the global financial sector. 

Indonesia, Southeast Asia’s largest economy, will need to link the samurai bond with the JBIC because the country’s sovereign investment rating is insufficient for the issue, according to the Finance Ministry’s head of fiscal policy, Anggito Abimanyu. 

The JBIC has AAA rating. 

While primarily aimed at keeping the budget deficit in check, Anggito said the bond proceeds or the loans would be allocated mostly to finance trade and projects linked to Japan. 

The Finance Ministry’s director general for budget management, Anny Ratnawati, said last week

the deficit would swell to Rp 136.9 trillion ($11.1 billion), or 2.6 percent of the country’s GDP, from a previous forecast of Rp 129.5 trillion, or 2.5 percent of the GDP. 

Aside from the guarantee facility, Mulyani also said Japan had agreed to help the stability of the Indonesian economy and complement its current strong position of foreign reserves by upgrading the size of the existing bilateral swap arrangement. 

Under the Chiang Mai Initiative, Japan and Indonesia will double the swap deal to $12 billion.

The initiative was inked in Thailand in 2000, aimed at creating a network of bilateral swap arrangements among ASEAN+3 countries to address short-term liquidity difficulties in the region and to supplement existing international financial arrangements. 

ASEAN+3 includes the 10 members of ASEAN — the Philippines, Indonesia, Thailand, Malaysia, Singapore, Brunei, Vietnam, Myanmar, Cambodia and Laos — as well as the three East Asian nations of Japan, China and South Korea. 

The bigger swap allocation will strengthen Indonesia’s foreign currency reserves in case of a sharp depreciation in the rupiah against the US dollar. Latest central bank data shows Indonesia’s foreign exchange reserves currently stand at $50.87 million. 

Bank Indonesia uses the reserves to supply the financial market with the greenback, making sure the volatility in the rupiah can be maintained at favorable levels. 

The rupiah has been losing ground over the past weeks, hovering at above Rp 12,000 per dollar, higher than the Rp 11,000 earmarked under the planned revision of this year’s state budget, as banks shop for more dollars to pay for derivatives deals with exporters. 

While the declining value of the rupiah is in part good for exports, it creates a greater harm, especially for the country’s ability to pay dollar-denominated government and private sector debts, as well as the ability to finance international trade. 

“The deal with Japan, which is a very progressive move, can ease speculation in the rupiah because Indonesian foreign currency reserves are getting bigger and stronger. This will boost confidence in the market and in the businesses,” Mulyani said. 

She added Japan was ready to take part in a joint contingent loan facility for Indonesia, which is being elaborated by Indonesia and its development partners, including the World Bank, the Asian Development Bank and other countries. 

“Although the Indonesian economy remains sound, there’s still a need for a second line of defense in a bid to fully anticipate the worst from the impact of the global economic crisis,” she said.

Guarantee fund to go into effect this year

Benget Besalicto Tnb., THE JAKARTA POST, JAKARTA | Mon, 02/23/2009 10:53 AM  

The government will start operating the infrastructure guarantee fund this year with an initial fund of Rp 1 trillion allocated from the 2009 state budget, a senior official said Saturday. 

“We’ve finalized the draft of the regulation on the guarantee fund; now we’re waiting for President to sign it,” Bambang Susantono, infrastructure deputy to the coordinating minister for the economy, told The Jakarta Post. 

“I think we can start in the next few months.” 

He added the guarantee was “necessary to attract investors in developing infrastructure projects”. 

It was also important, he went on, to avoid any cancellation of infrastructure development, which is badly needed by Indonesia to accelerate economic growth and improve competitiveness at the international level, which is on a decline. 

He said the government regulation would rule what kind of infrastructure projects need to be guaranteed if there was any policy change made by governments. 

In the case of investors canceling projects due to policy changes on part of the government, the government may be required to pay financial compensation to the investors. 

Such stipulations are detailed in the upcoming government regulation. 

All of the guarantee fund will be used to guarantee infrastructure projects under the public private partnership (PPP) schemes for the next five to 10 years. 

“The existence of the fund will only be aimed at guaranteeing that the next governments will not make any changes to the agreed contracts already signed by previous governments,” Bambang said. 

But he added he could not yet disclose what projects would be guaranteed and how much each of them would be guaranteed for. 

“We’re waiting for the government regulation to be approved,” he explained. 

He also said part of the guarantee fund would be allocated from the state budget, while the rest would be in loans sourced from the Asian Development Bank (ADB) and the World Bank. 

The guarantee fund will differ from the planned infrastructure fund, which is also set to be established by the government soon to facilitate the financing of infrastructure projects. 

Due to the frequent shortages of funds for infrastructure development, the government recently announced the planned establishment of the Indonesia Infrastructure Fund Facility (IIFF), which could take place as early as March. 

This institution will be charged with raising funds to finance infrastructure projects under the public private partnership mechanism.

Sweden to launch waste refinery project in RI

The Jakarta Post, Wed, 02/18/2009 2:55 PM   

INDONESIA: Sweden, one of the few countries which fulfilled Kyoto Protocol emissions reduction target, in collaboration with Gadjah Mada University (UGM) in Yogyakarta, will launch the Waste Refinery Indonesia project in Yogyakarta, the Swedish Embassy said on Tuesday. 

From the Swedish side, the municipality of Boras and the University of Boras will work with UGM. 

Both Sweden and UGM are jointly organizing a two-day workshop in Yogyakarta that will be opened on Wednesday by Swedish Ambassador Ann Marie Bolin Pennegard and UGM rector Prof. Sudjarwadi, on waste refinery. Both Pennegard and Sudjarwadi will also launch the Waste Refinery Indonesia project. 

"The objective is to develop a network around Indonesia under the project name Waste Refinery Indonesia," the embassy said in a statement sent on Tuesday to The Jakarta Post. - JP

Indonesia, Thailand ink first ever student exchange deal

The Jakarta Post  |  Sat, 02/21/2009 5:10 PM  

Indonesia and Thailand have signed an agreement for an exchange student program to commencer this year, the first cooperation of its kind between the two countries, an official said. 

Director General for Higher Education Fasli Djalal said Saturday that Indonesia is set to host 28 students from Thailand who would take courses in Indonesian, cultural studies and technology. 

Higher education institutions that will host the students include Gajah Mada University, the University of Indonesia, the Bandung Institute of Technology, the Indonesian Education University, Hasanuddin University, Lambung Mangkurat University, the Surabaya Institute of Technology, Bina Nusantara University, Pancasila University, Muhammadiyah University and Petra University. 

In exchange, Indonesia will send nine post graduate students to Thailand to study international trade, tourism and hospitality. 

“We will only send a few because this is the first time we have had an exchange cooperation program with Thailand,” Fasli said as quoted by tempointeraktif.com. 

Fasli said he and Thailand’s Secretary-General of the Commission on Higher Education Sumate Yamnoon signed the agreement two days ago. (and)

Govt and ambassador inaugurate Japan-funded bridges

The Jakarta Post | Sat, 02/21/2009 5:48 PM  

Public Works Minister Djoko Kirmanto together with Japan’s Ambassador to Indonesia Toru Maeda inaugurated nine bridges in West Sumbawa on Saturday that were funded by the Japan International Cooperation Agency (JICA). 

The construction of the bridges, which cost approximately Rp 87.1 billion, took about two years and was carried out by a Japanese firm, Hazama Corporation. 

West Nusa Tenggara spokesperson Andy Hadianto said the bridges would unlock several areas in the southern part of Sumbawa from isolation and open more economic opportunities for the villagers. 

“The areas (in southern part of Sumbawa) are fertile. The new infrastructure will increase the value of the farming products,” he said as quoted by tempointeraktif.com. 

Andy said JICA would continue to fund 15 other bridges in Sumbawa while the local government would finance the construction of six new bridges. (and)

Indonesia Vice President to invite Guus Hidink

Jakarta (ANTARA News) - Vice President  M Jusuf Kalla has said that mutual approaches are being carried out to invite Dutch soccer coach Guus Hidink to train Indonesia's national soccer players under the All-Indonesia Football Association (PSSI). 

"I have asked Indonesian Ambassador to Russia Hamid Awaluddin to find out whether Guus Hidink still has the time to train our soccer players,"  Jusuf Kalla said after Friday prayers in Jakarta Friday. 

He also said that talks had already been held with the Russian version of KONI on the possibility of Guus Hidink coming to Indonesia, because he is now a coach of the Russian national soccer team. 

In the meantime,  Guus Hidink has signed a contract with the  Chelsea soccer club.

Related Article:

Indonesia joins race to host 2018, 2022 World Cup

ASEAN citizens will get hotel discounts in Indonesia

The Jakarta Post, JAKARTA | Sat, 02/21/2009 10:46 AM  

The Ministry of Culture and Tourism plans to intensify its promotional campaigns targeting the Southeast Asian market, including a special ASEAN discount program. 

“The details on the program will be discussed at the Association of Southeast Asian Nations (ASEAN) summit in Bangkok, Thailand, in March,” the ministry’s marketing directorate general Sapta Nirwandar said on Friday. 

“One of proposed programs is to have hotel discounts effective among ASEAN nations. This means if tourists can prove they are citizens of an ASEAN nation, they will automatically get a special discount,” he added. 

Sapta said that the hotel discount program had not yet been officially agreed by the ASEAN nations. “But the Indonesian and Malaysian governments have planned to try the program on a voluntary basis.” 

Sapta said that the ASEAN market could play a key role in maintaining the Indonesian tourism industry while the global economic crisis is hitting Western countries so badly. 

Around 6 million tourists came into the country in 2008, bringing in around US$7.5 billion in foreign exchange income. 

Indonesia managed to record the highest increase in tourism  in the ASEAN region from 2007 to 2008, with a volume growth of around 15.25 percent. However, the ministry has not set a higher target for 2009, due to the global downturn. 

As for this year’s income target, Sapta said that the ministry forecasts around $6.5 billion of foreign exchange from the tourism industry. 

But while the ministry has set a lower income target, it increased the promotional budget to $24 million in 2009 from $22 million last year. 

Sapta said that the ministry would allocate the budget more to niche markets rather than to global advertising,  since Indonesia’s tourism budget is very small compared to those of neighboring countries like Malaysia, which spent around US$100 million in 2008. 

“That is why we cannot afford a mass promotion such as airing advertisements on international television networks. It costs around Rp 75 million just for a 30 second ad-spot,” Sapta said. 

The ministry has scheduled several niche-specific events in West Sumatra, such as bicycle riding  in Singkarak and an old locomotive tour project in Padang Panjang. “We also plan to develop tourism in Lombok and Sumbawa. Currently, only around 130,000 tourists visit these areas annually. We plan to increase this by 1 million visitors in 2012,” Sapta said. (hdt)

Key projects ready to start as early as next month

Aditya Suharmoko, THE JAKARTA POST, JAKARTA | Sat, 02/21/2009 9:57 AM  

The government says infrastructure projects will be started as early as March to stimulate the economy amid the worsening global economic downturn. 

Finance Minister Sri Mulyani Indrawati said on Friday that ministries and government agencies had made preparations to start their new projects in March. 

“Based on the projects they’ve submitted, they’re ready to start implementing them in March.”

The government has included in its economic stimulus package Rp 10.2 trillion directly for the real sector, Rp 8.4 trillion of which is allocated to labor-intensive infrastructure projects. 

This amount is on top of over Rp 90 trillion already set aside in the 2009 state budget for infrastructure projects  under the auspices of various relevant ministries. 

Bambang Susantono, the deputy to  the Coordinating Minister for the Economy in charge of infrastructure, said the Rp 8.4 trillion of funds would be adequate to help cover important infrastructure projects. 

“The spread is good enough in terms of spatial coverage, areas, sectors. There are funds for trains, roads, ports and airports,” he said. 

The government has said there are 13 sectors whose infrastructure will be boosted this year to help mitigate the impact of the global economic slowdown. 

These include  multi-year project contracts covering roads, power plants and electrical transmission, airports, markets, trains, railways and ports, as well as handling disasters and developing low-cost apartments, village roads, irrigation schemes, fishermens’ houses and drinking water supply schemes. 

The start up of government-led infrastructure projects will be a major factor determining whether the economy can reach a full-year growth rate of between 4 and 5 percent this year, as forecast. 

Analysts have said the economy is bracing for the blows from the worst impacts of the global slowdown in the second half of the year. 

If the government is late in stimulating the economy, the economy may experience negative growth in the third quarter, said Purbaya Yudhi Sadewa, the chief researcher of Danareksa Research Institute. 

The government has created the Indonesia Infrastructure Fund Facility (IIFF) to help mobilize more funds to finance infrastructure projects in Indonesia. 

The Asian Development Bank has said it will inject Rp 1 trillion in funds to the IIFF out of Rp 4 trillion needed by the government. 

The government has said the Infrastructure Fund may be up and running by as early as March

Bambang said the World Bank and German development bank KfW had expressed interest to also support the IIFF. 

“We’re expecting additional funds of Rp 3 trillion to bring the capital (of IIFF) up to Rp 4 trillion this year,” he said. 

He added that the Finance Ministry had prepared the board of commissioners and directors of IIFF. 

“The selected people have said if they are chosen, they’ll expand the capital to Rp 20 trillion in the next five years,” said Bambang. 

The government expects the IIFF to provide equity and to finance infrastructure projects under the tried and practiced public-private partnership (PPP) mechanism.

DJ Eramet: Weda Bay Project: New Partnership With Mitsubishi

Trading Markets, Thu. February 19, 2009; Posted: 02:15 AM    

French metals group Eramet SA (ERA.FR) said Thursday it has agreed to sell 33.4% of its Strand Minerals (Indonesia) Pty Ltd. unit to Mitsubishi Corp. 

Strand Minerals (Indonesia) owns 90% of PT Wed Bay Nickel, the remaining 10% being held by Indonesian partner Antam, Eramet added. 

PT Weda Bay Nickel is the project and exploration company for the Weda Bay nickel cobalt project on the island of Halmahera in Indonesia. 

Under the terms of the agreement, Mitsubishi will pay Eramet about $145 million. This amount includes Mitsubishi's pro-rata share of the capital of Strand Minerals and other expenditures incurred by Eramet since the acquisition of Weda Bay in 2006 to assess the feasibility of the project. 

Eramet and Mitsubishi, with their very complementary competencies, will join forces to finalize project studies required to take the final development decision. 

The Weda Bay deposit is one of the largest undeveloped nickel projects globally, with an updated 5.1 million tons nickel contained in measured, indicated and inferred ore resources, which could ultimately enable Eramet to almost double its nickel production, with a targeted additional annual capacity of up to 65,000 tons of nickel. 

The project would use a hydrometallurgical process developed by Eramet at its research center in France. 

Company Web Site: www.eramet.fr

Garuda To Lease 8 Jetliners

The Jakarta Globe, Janeman Latul & Yessar Rosendar, February 21, 2009

State-owned airline, PT Garuda Indonesia, expects to sign a lease agreement on Mar. 3 with a Middle Eastern company to enable the 59-year-old carrier to lease 8 new Boeing 737-800NGs worth up to $360 million, Emirsyah Satar, Garuda’s CEO, told the Jakarta Globe. 

However, Emirsyah declined to release the name of the leasing company. Garuda’s original plan called for the airline to lease 14 planes funded by different investors in November last year. 

“There’s already a leasing company from the Middle East that will finance the aircraft purchase [that Garuda will use],” said Sofyan Djalil, minister of state-owned enterprises. “Garuda is going to sign it at the World Islamic Economic Forum. Leasing was preferred by Garuda in order not to burden its balance sheet.” 

Sofyan added that leasing provides more flexibility than buying as the company can replace the planes when the lease ends. The scheme can also shield Garuda’s balance sheet from fluctuating exchange rates as the planes are still owned by the leasing company and not Garuda. 

On Wednesday, the carrier also announced that it will turn to its cargo service arm, GO Product, to add about $13 million to revenue in 2009. In 2008, its cargo service contributed 5.5 percent, or Rp 1 trillion ($84 million), of the company’s total revenue of Rp 18 trillion. Garuda expects cargo capacity to increase.

Give Karen the Freedom to Bring About Change

The Jakarta Globe, Supramu Santosa, February 21, 2009 

Once again, Pertamina finds itself with a new captain at the helm, Karen Agustiawan, after three years commanded by Arie Sumarno, and short stints by Widia Purnama (two years), Afifi (one year), and Baihaki Hakim (three years). 

The fact that Pertamina is subject to so many leadership changes does nothing to benefit its growth and development. If meaningful change is to be brought about at Pertamina, management continuity is essential. A new leader of Pertamina who wishes to institute fundamental, comprehensive changes in the company — something Pertamina urgently needs if it is ever to become a world-class company — will need four or five years to develop and implement the necessary strategies. 

Pertamina has everything a corporation needs to become a world-class outfit. It has upstream, exploration and production assets with an amazing amount of potential. Its exploration areas are vast and, potentially, extremely lucrative and of huge interest to major international oil and gas companies. Pertamina’s exploration and production areas can be further optimized and maximized due to their current low recovery rates. By deploying state-of-the-art oil and gas technology, production from Pertamina’s fields can be significantly raised. By increasing exploration and optimizing exploitation, these upstream activities could become the cornerstone of incredible value creation for Pertamina. 

Pertamina also has huge downstream assets, including oil refineries and a vast distribution network throughout Indonesia of the sort that newcomers to the country’s downstream oil business, like Shell and Petronas, can only dream about. How much would it cost Shell, Petronas, or Exxon to establish distribution networks of the same extent as Pertamina’s? Although the oil and gas law has opened the door to competition in the downstream arena, Pertamina is light years ahead of its competitors. 

In terms of Pertamina’s human resource capabilities, it has competent and experts in many fields. While there is skepticism about the company’s human resources, this writer can vouchsafe, based on long interaction with Pertamina, that the company has a host of innovative and professional staff. What the company needs is to create a working environment and a culture that can motivate its staff to work professionally and to the best of their abilities. 

Under professional management, Pertamina should be able to develop into a well-respected, world-class oil and gas enterprise, as long as government gives the company the opportunities it needs to grow. Give Pertamina the chance to invest further in the upstream and downstream sectors. With its huge assets and major financing potential, growing Pertamina should not be difficult, whether based on cooperation with strategic industry partners, or through other sources of financing. 

However, in order for Pertamina to grow, political will on the part of all sides will be needed. Pertamina’s management needs to be given more space to implement its policies and decisions, just like any other oil and gas enterprise in the world, free of interference from the politicians. Place Pertamina under the supervision of a professional board of commissioners, the Development Finance Comptroller, or BPKP, and independent auditors, instead of the House of Representatives, or DPR, and the cabinet. To date, the head of Pertamina has had to spend too much time preparing for and attending meetings with the House and government. There is too much political interference in Pertamina’s policies, even as regards the nitty-gritty, such as the procurement of goods and services. 

While it is true that Pertamina has a duty to supply and distribute oil-based fuels at government-set, subsidized prices, the question of pricing and the size of subsidies, which are political decisions, should not be allowed to disrupt the company’s finances. Pertamina still needs to be allowed to earn a profit on these endeavors. Pertamina’s profit is also state profit, as the government is Pertamina’s sole shareholder. Unfortunately, the supply and pricing of subsidized fuels are highly sensitive areas, and it often seems that Pertamina’s performance is judged based solely on these issues. That’s why Pertamina needs to improve the management and monitoring of subsidized fuel supplies. Smooth distribution, free of the disruptions that are currently all too frequent, will diminish criticism of Pertamina, and allow management to concentrate on growing the company. 

We need to give Pertamina the freedom to act, just like other oil and gas enterprises. So, give Pertamina’s new president director, Karen Agustiawan, the time and the freedom she needs to realize her vision, accompanied, of course, by tight supervision by a professional board of commissioners. 

Supramu Santosa is CEO of oil and gas company Star Energy.

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Target of Energy Lamp Sales to be 180 Million Units

Friday, 20 February, 2009 | 15:12 WIB 

TEMPO Interactive, Jakarta:The Indonesian Lamp Association has targeted this year’s sale of energy-efficient lamps to be 180 million units. Half of them are produced by local producers while the rest are imported. 

“The state-owned electricity company PLN has 36 million family subscribers. If each family uses five lamps, that would make 180 million,” said Indonesian Lamp Association chairman John Mannopo in Jakarta yesterday. 

John explained that local products last year only topped 20 percent. Nevertheless, it is expected to grow this year. John is optimistic that local producers can supply 50 percent provided that Ministerial Decree no. 56 on Import Restriction on Certain Products is carried out properly. 

He thinks the regulation had a positive impact on the local industry. The impact could be felt since the end of last year. According to him, the average number of lamps that entered last year reached 8.5 million units. However, in December 2008, the number dropped to 2.5 million units. 

DESY PAKPAHAN

Indonesia and Australia go for comprehensive deal

Endy M. Bayuni, THE JAKARTA POST, SYDNEY | Fri, 02/20/2009 8:41 AM  

Australia wants a better investment climate and Indonesia wants assistance with its own production capacity. The two countries have now agreed that both items, along with trade liberalization, would go into the economic agreement that they are working on.

The trade ministers of the two countries concluded on Thursday another round of their meeting

to set up a bilateral free trade agreement (FTA), which they said would be built into the FTA

that will be signed later this month between the Association of Southeast Asian Nations (ASEAN) and Australia and New Zealand in Thailand. 

During their joint press conference, Minister Mari Pangestu of Indonesia underlined the importance of capacity building. 

She called it a key component of the future agreement to ensure that the benefits of a better investment climate would also accrue to the recipient country. 

She specifically mentioned Indonesia’s agriculture sector as one potential area where Australia could help in return for the opening up of the dairy and beef sectors to Australian investors. 

Her Australian counterpart Simon Crean underlined the importance of creating the right environment for Australian investors. 

“Investment is the new trade,” he said, pointing at the fact that investment could lead to better access to the global supply chain as well as to markets. 

Indonesia is Australia’s fourth largest trading partner in ASEAN, a rank that prompted Crean to describe a trade relationship that is “underdone” 

Two-way trade in 2007/8 reached A$10.3 billion, according to Australian official figures.

Australian investment in Indonesia was valued at A$3.4 billion at the end of 2007. 

Neither minister was willing to put a time frame on when the comprehensive economic agreement would be signed, in spite of the numerous meetings they have had in the past year. 

Crean however agreed that moving toward more free trade would be the best course to lift countries out of the current economic risis. “Protectionism only invites retaliatory action.” 

Addressing concerns at home about the possible negative impact on Indonesia’s own industry, Mari said the two countries have agreed to put the sensitive sectors as the last to be liberalized under the free trade agreement. 

Indonesia’s dairy and beef sector, she said, would only be liberalized between 2017 and 2020.

The meeting to discuss the bilateral free trade agreement also involved the business community from both sides. 

The trade meeting preceded the Australia-Indonesia Conference which was opened later on Thursday evening by Prime Minister Kevin Rudd. 

A total of 120 people, 60 from each side, are taking part in the conference which winds up Saturday.

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