RI admits lack of cooperation with Saudi over migrant workers

The Jakarta Post, Jakarta | Mon, 11/22/2010 9:54 AM

The Indonesian government has admitted it proposed but never signed a draft of a memorandum of understanding intended to improve protection for Indonesian migrant workers in Saudi Arabia, a top official says.

Manpower and Transmigration Ministry Secretary-General Setyoko said Sunday that Indonesia had a long time ago proposed a legal basis to guarantee protection for Indonesian migrant workers in Saudi Arabia.

“We proposed the MoU a long time ago. But, the agreement requires the political will from both parties to sit together and cooperate,” Setyoko said as quoted by Tempointeraktif.com.

Setyoko declined to comment on why both Indonesian and Saudi Arabian had not signed the agreement.

“We keep trying to use our diplomatic channels to talk about the issue. We are still waiting for the outcome of the talks,” he said.

“We will also invite the Saudi Arabian manpower ministry to discuss the draft of the agreement as soon as possible,” he added.

More than 4,300 Indonesian migrant workers were currently facing hardship, ranging from illness to sexual abuse, the Indonesian government said earlier.

That number constitutes 0.1 percent of the total 3.27 million Indonesian migrant workers worldwide.

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State-owned Enterprises Invited to Manage Middle East Projects

Tempo Interactive, Saturday, 27 March, 2010 | 09:38 WIB

TEMPO Interactive, Jakarta:State-owned Enterprises Minister Mustafa Abubakar said his office has invited state-owned enterprises to meet with Iraqi and Jordanian businessmen who offered business in the construction sector. “I invited them for a business-to-business meeting,” Mustafa said in Jakarta yesterday.

Among the state-owned enterprises invited were PT Wijaya Karya, PT Adi Karya, and PT Pembangunan Perumahan. With regards to the financial loss suffered in the Middle East, Mustafa said state-owned enterprises have learned a lot from their experience. “They have learned their lesson and will not let it happen again,” he said.

The investments offered included projects in road, housing, and building construction in post-war Iraq. The collaboration would be in the form of a partnership or a possible joint-venture. The investment value is high although Mustafa does not know the exact figures. “We have not talked about numbers yet,” he said.

PUTI NOVIYANDA

Emaar Properties Must Go Through Selection Process

Tempo Interactive, Wednesday, 17 March, 2010 | 16:53 WIB

TEMPO Interactive, Jakarta: Emaar Properties, a company owned by the Dubai Kingdom from the United Arab Emirates, must still undergo the selection process along with other potential investors in developing Putri Mandalika Resort, in the southern coast of Central Lombok, West Nusa Tenggara (NTB).

The same policy was stressed by NTB Investment Agency chief, Yakoub Abidin, in response to Emaar’s wish, as reported by Reuters. “The Mandalika project is open to everyone,” Yakoub said last week.

As reported by Reuters on Wednesday last week, the Emaar management was waiting for the Indonesian government’s response, represented by the Bali Tourism Development Corporation. "Indonesia is representing our company’s growth target,” said Emaar management.

Earlier, Emaar won the tender for the 1.250-hectare integrated tourism area project. However, the investment valued at US$ 600 million expired in July last year following Emaar’s financial troubles.

According to Yakoub, four other foreign investors have expressed their interest in the tourism area. They are from India, Tunisia, and other parts of Asia.

SUPRIYANTHO KHAFID

Govt to set up three SEZs for agribusiness

Aditya Suharmoko, THE JAKARTA POST, JAKARTA | Sat, 02/06/2010 1:03 PM | Business

The government is aiming to attract less than Rp 100 trillion (US$10.6 billion) in investment through the development of three special economic zones (SEZs) producing agricultural products this year.

The three zones will be located in Medan, North Sumatra, in Dumai, Riau, and in Merauke, Papua, Vice Agriculture Minister Bayu Krisnamurthi said Friday at the Coordinating Economic Ministry.

Medan, which produces crude palm oil (CPO), may attract Rp 12.5 trillion in investment, he said. "PT Perkebunan Nusantara III will provide 800 billion in initial investment."

Dumai needs Rp 20 trillion in investment for CPO production, Rp 2.5 trillion to come from PT Wilmar International Ltd., Bayu added.

"We want to increase CPO production, and raise CPO's added value by developing downstream industries. The SEZ approach is used to make private investors interested in developing downstream industries in a zone by using existing raw materials," he said.

Indonesia wants to develop half-processed goods to be sold abroad rather than sell raw materials.

Bayu said Indonesia expects to produce 40 million tons of CPO in 2020, almost double from 20 million tons targeted this year.

Merauke needs Rp 60 trillion in investment to become a food estate, producing various agriculture products, said Bayu.

"We're preparing land of 1.62 million hectares, suitable for food estate. But we initiate by developing from 500,000 hectares. In the first year we will start from 100,000 hectares," he said.

Bayu said the government would help develop supporting infrastructure in Merauke to ensure the region is ideal as an economic zone and viable for both domestic and foreign investment.

"Merauke is still *underdeveloped* so it needs a large initial investment of between Rp 2.5 trillion and Rp 3 trillion," Bayu said, adding that 32 investors from domestic and abroad such as the Middle East, Japan, Brazil and China were interested.

Vice President Boediono said Thursday the government would closely look at spatial planning to ensure more land for agricultural use, according to the Indonesian Chamber of Commerce and Industry.

Research from the Agriculture Ministry shows Indonesia has 190 million hectares of land, 101 million suitable for agricultural use. Now 64 million hectares is used for farming.

President Susilo Bambang Yudhoyono said the government would focus on 10 strategic and key commodities to feed Indonesia and the world.

Coordinating Economic Minister Hatta Rajasa said the government would cooperate with regional governments to build infrastructure in the three zones.

"Investment appetite is high. I am positive in 2010 investment will grow," he said, adding that the government has met with representatives from Japan and the US.

According to the National Development Planning Agency (Bappenas), Indonesia has identified six economic corridors - Eastern Sumatra-Northwestern Java, Northern Java, Kalimantan, Western Sulawesi, East Java-Bali-East Nusa Tenggara and Papua - to be developed through public-private partnerships.

Each corridor has its own focus industries.

Bappenas said Indonesia would need almost Rp 2,000 trillion in investment between 2010 and 2014 for infrastructure development.

PP signs property contract with Bin Laden Company

Nani Afrida, The Jakarta Post, Jakarta | Sun, 01/31/2010 5:57 PM

State construction company PT Pembangunan Perumahan (PP) has secured Rp 16.2 trillion ($1.8 billion) worth of contracts this year, including two with the Binladen Group construction conglomerate and holding company in the Middle East.

On Sunday, PP said in a statement that the two contracts from Binladen Group (SBG) were worth Rp 500 billion, but did not provide further details.

“We will also get additional work from the company worth Rp 1 trillion,” PP director Musyanif said.

PP’s domestic projects include the development of Hasanuddin University in South Sulawesi, a project worth Rp 450 billion.

Rp 3.6 trillion worth of the contracts for 2010 were carried over from 2009, he said.

Last year the company signed Rp 12.6 trillion worth of new contracts, twice the amount it had signed in 2008.

Govt gives Emaar the boot, looks for new funds

Andi Haswidi , The Jakarta Post | Wed, 01/27/2010 3:37 PM

The government has decided to terminate all commitments with Dubai-based Emaar Properties on a plan to build a US$600 million mega-tourism project in Lombok, West Nusa Tenggara.

Investment Coordinating Board (BKPM) chairman Gita Wirjawan said Tuesday that Emaar had failed to meet its share of the bargain in developing the project.

Gita said the government, represented by the West Nusa Tenggara government, had followed through with its commitments, including building an airport - to be completed in June - a 31-kilometer road connecting Mataram to the airport and an 18-kilometer road from the airport to Kuta Beach.

"*Emaar* failed to reciprocate in kind. We have taken this decision to ensure fairness and we will look for other possibilities," Gita said.

The mega-tourism project has been marked by finger-pointing since Emaar signed a joint venture agreement with the Bali Tourism Development Corporation (BTDC) in March 2008. The agreement included establishing a joint venture company called Emaar Lombok.

Emaar claimed last year that the Indonesian government had failed to follow through with some of its promises, citing in particular the clearance of a 1,200-hectare area of land required for construction.

In October, Alwi Shihab, Indonesia's special envoy to the Middle East, who also worked extensively on the project, said the land dispute was solved and that the project would follow through.

Further development showed that around 1,000 hectares had been set aside by the government for the project but still required certification from the National Land Agency (BPN), while the remainder still belonged to local residents.

A disagreement surrounding the company's investment contributions and ownership in the joint venture has also overshadowed the project.

State SOE Minister Mustafa Abubakar said earlier this month the deal with Emaar had expired, but the company would be given a chance to sign a new deal.

Both parties had agreed to a Dec. 31 deadline to solve the numerous problems plaguing the project. Mustafa said the deadline would not be extended but said he was willing to have fresh talks with Emaar about restarting the much-delayed project.

Gita hinted that the decision to kick Emaar out of Lombok was also in the interest of the property company as it was currently struggling from the impact of the financial crisis.

"Dubai World has been heavily affected by the financial crisis. They have to restructure $59 billion in debt. This will have repercussions on Emaar, which is based in Dubai.

"The company also embarked on massive projects in Saudi Arabia and the United Arab Emirates. There are a financial limitation. Secondly, they prefer to focus on settling their problems in the Middle East," Gita said.

No Emaar official was available for comment Tuesday.

Gita said his office had been in talks with investors interested in replacing Emaar.

"We have met with interested investors. One from the Middle East and another from outside the region," he said, refusing to elaborate further.

West Nusa Tenggara province, located just east of Bali, has become the central focus of the ministry's tourism programs, with a specific program aiming to draw one million tourists to the province by 2012.

The province is rich in marine life and will be developed as the center for the pearl trade and ecotourism. Famous Lombok tourist sites include Senggigi Beach, the three Gili islands, Mt. Rinjani and Lake Segara Anak.

Tourist spots in the more secluded Sumbawa Island include Mt. Tambora, Moyo Island, Jelenga Beach and Maluk Beach.

Indonesia says UAE fund plans to invest $5.2 bln

Reuters, Thu Jan 7, 2010 3:16am GMT

JAKARTA, Jan 7 (Reuters) - The UAE's Middle East Coal (MEC) plans to invest $5.2 billion in infrastructure in Indonesia's East Kalimantan including a power plant, a railway and a smelter, the head of Indonesia's investment agency (BKPM) said.

The projects in the province on Borneo island include an around 140-km railway, a 1,400 megawatt coal-fired power plant and an alumina smelter, Gita Wirjawan said late on Wednesday.

Wirjawan confirmed the plans in a mobile phone text message to Reuters, adding: "as for the railway project, the land clearing has been done in the past months and the first stone will be laid in March."

MEC from the emirate of Ras Al Khaimah is a joint venture between UAE investment fund RAK Minerals and Metals Investments (RMMI) and UAE-based mining company Trimex.

Wirjawan said that the projects were expected to be completed within the next 3-4 years as investors had received financing commitments from Middle East banks and had the technology needed for the projects.

Resources-rich East Kalimantan has big reserves of coal and other minerals.

Indonesia, the world's most populous Muslim nation, has been keen to attract more foreign investment investment from the Middle East.

The Southeast Asian country expects foreign direct investment to rise 15 percent this year after only reaching just below $10 billion last year, according to data from the investment agency.

(Reporting by Dicky Kristanto and Andreas Ismar; Editing by Ed Davies)

Indonesia’s first private railway project ready for construction

The Jakarta Post, Jakarta | Wed, 12/16/2009 9:21 AM

A group of investors will soon begin building the first ever private railway in Indonesia, worth US$1 billion, as a key part of the planned development of a massive $5 billion integrated industrial facility in East Kalimantan.

The project’s readiness was announced at a meeting Tuesday between Indonesian President Susilo Bambang Yudhoyono and the crown prince and deputy ruler of the Emirate of Ras Al Khaimah, Sheikh Saud Bin Saqr Al Qasimi.

The two were joined by Gita Wirjawan, chairman of Indonesia’s National Investment Coordinating Board (BKPM), Madhu Koneru, group CEO of MEC Holdings, Hari Sankaran, managing director and CEO of Infrastructure Leasing and Financial Services Ltd. (IL&FS), and Allen Alexander, the chairman, president and CEO of SavageCANAC Corporation, a media statement said.

MEC Coal and MEC Infra, two joint ventures of MEC Holdings and Ras Al Khaimah Investment Authority, will develop a 130-kilometer railway line to facilitate the transport of raw materials and finished products in and out of East Kutai regency in East Kalimantan.

Gita said MEC Infra had been able to purchase and clear the land for the entire corridor within just a few months.

“This undertaking will create multiple benefits for the development of the local economy in East Kalimantan,” Yudhoyono said in the statement.

“It sets a positive tone for future investments from the Middle East.”

Sheikh Saud said, “This type of public-private, Middle Eastern-Indonesian initiative is a fantastic example of what can be accomplished when the fundamentals make sense for all parties involved.

“This project will help meet the development needs of East Kalimantan communities, while also serving to meet the energy challenges in Asia.”

Under the project agreement, MEC Infra will invest up to $1 billion in constructing the railway line linking the mine site at Muara Wahau to Bengalon on the coast.

MEC’s mine and railway are central to the development of a complex of integrated industrial facilities.

These will include a power plant fuelled by coal from MEC Coal, an aluminium smelter, a fertilizer plant and a high-capacity port terminal, Gita said.

All these, he added, would require total “investment value of $5 billion”.

MEC Coal has a 12,000 hectare coal concession in East Kutai.

The statement also MEC and Nalco — an Indian government entity — would invest $2 billion for an aluminium smelter capable of producing 500,000 tons of aluminum a year, with another $2 billion for the construction of a 1,250-megawatt captive power plant and other facilities. Both are scheduled for completion by 2013.

“This investment serves as a huge vote of confidence from an investor base with which Indonesia shares long-term strategic interests,” Gita said.

Over the next five years, the project is expected to create 5,000 new jobs in the province.

MEC’s Koneru said the project would help “transform East Kalimantan into a model for the future of Indonesia by providing a strong platform for growth, helping Indonesia to attract further investments”.

Businessman to develop Islamic resorts

Indra Harsaputra and Achmad Faisal, The Jakarta Post, Surabaya | Tue, 09/01/2009 5:45 PM

A Sumenep legislative council member confirmed reports that two islands off Madura had been sold to a businessman who intends to develop them into resorts.

Councilor Badrul Aini said Tuesday that businessman Zainal Seniya bought the islands and had leased them to Canadian and Singaporean investors.

“Both Sitabok and Seradeng islands will be developed into maritime resorts equaling Bunaken [North Sulawesi],” Badrul said.

Local cleric Dailami Abu Hurairah, who is close to the businessman, said the two islands would be Islamic resorts and target Middle East tourists.

“We have been involved in the project and will help operate the maritime resorts, which will follow an Islamic concept,” Dailami said.

He said many Middle East tourists felt uncomfortable with major tourist destinations like Bali, which do not promote Islamic values.

Deputy Sumenep Regent Mochammad Dahlan said the two islands belonged to the state and had not been sold to anyone.

Indonesia Eximbank launched to boost exports

Aditya Suharmoko, The Jakarta Post, Jakarta | Tue, 09/01/2009 2:22 PM

Mahendra Siregar, chairman of Indonesia Eximbank’s board of directors, Finance Minister Sri Mulyani Indrawati and Trade Minister Marie Elka Pangestu talk at the official launch of the Indonesia Eximbank in Jakarta on Tuesday. (JP/R. Berto Wedhatama)

The government has officially launched the Indonesia Eximbank, an agency to help finance exports, particularly by micro-, small- and medium-sized enterprises (MSMEs).

Indonesia Eximbank will boost the number of exporters, which have difficulty securing financing from other financial institutions, Trade Minister Mari Elka Pangestu said Tuesday after the launch ceremony.

"We will identify potential exporters," she said.

Finance Minister Sri Mulyani Indrawati said she expected Indonesia Eximbank to help diversify exports to new destination markets.

The Middle East, Russia, Kazakhstan and Uzbekistan are among the new destination export markets, Mari said.

ICD moves ahead with plans to acquire BNI's sharia unit

Aditya Suharmoko, The Jakarta Post, JAKARTA | Wed, 03/04/2009 4:05 PM  

Dubai-based Islamic Corporation for the Development of the Private Sector (ICD) says it will go ahead with plans to acquire the sharia unit of Bank Negara Indonesia. 

The ICD said Tuesday it is still committed to executing the plan later on this year, to establish a major sharia bank in Indonesia, despite the global financial crisis. 

"Our intention is (to establish the bank) sometime this year. The crisis hasn't changed our resolve; although the crisis has forced everybody to reasses the situation, we're 100 percent committed to this project," said ICD chief executive officer Khaled M. Al-Aboodi. 

Al-Aboodi said the ICD would bring other investors, especially from the Middle East, to invest in the BNI's sharia unit. 

He added the new sharia bank would focus on "not only retail, but also corporate and investment" banking. "We'll provide a wholesale bank that supports businesses and individuals as well." 

ICD will inject US$450 million in funds to set up the new sharia bank. As BNI's sharia unit has a capital of Rp 500 billion ($41.49 million), the new bank's capital will reach around $500 million. 

"We'd like to make an impact. Small banks cannot make an impact." 

The central bank has announced it would cut the minimum capital requirement for banks seeking to spin off their sharia units to Rp 500 billion from Rp 1 trillion previously. 

BNI president director Gatot Suwondo has said the bank would spin off its sharia unit as soon as the regulations come into effect. 

ICD has so far invested in a number of companies and projects in the country, most of which went to PT Power Telecom (PowerTel) and PT Mandala Multifinance. 

Mandala received $8 million to fund its program for micro and small sized enterprises, and increased its capital base. PowerTel will receive about $50 million in phases for the development of fiber optic projects, said PowerTel deputy president director Temi Efendi. 

PowerTel, owned by the Tjokrosaputro family, has always been in the red since it was established in 2004. 

The Tjokrosaputro family owned Bank Pikko, before it was merged with Bank Century, which was then taken over by the government last year amid financial distress. 

ICD said it was looking at other projects worth $82 million in total. 

"We're interested in the financial sector, modern manufacture, infrastructure. We've looked at some of the projects, but we're looking for some regulations to be more clear, on the tollroads for example," said Al-Aboodi.

WIEF sees signings of 4 preliminary deals for $3b

Benget Besalicto Tnb., THE JAKARTA POST, JAKARTA | Tue, 03/03/2009 12:19 PM 
 

 Making partnerships fly: CEO of Dubai Aerospace Enterprise Capital Robert J. Genise (left) listens to the president director of national flag carrier PT Garuda Indonesia, Emirsyah Satar, before the signing of a preliminary agreement on the sidelines of the World Islamic Economic Forum (WIEF) in Jakarta on Monday. JP/R. Berto Wedhatama
 

The first day of the fifth World Islamic Economic Forum (WIEF) saw Monday the signing of four memorandum of agreements (MoAs), worth about US$3 billion. 

MoA is a term introduced during the WIEF event to help cement outline project agreements  that are more than half concluded. 

“These agreements amount to more than $3 billion,” said State Minister for State Enterprises Sofyan Djalil, who is also the co-chairman of the Indonesian national organizing committee of the WIEF. 

“However, the realization of these agreements are still dependant on further studies and competitive tenders. It can be higher or lower than the estimated value,” he told reporters during the three day forum. 

The first MoA is between Bank Muamalat, the country’s largest sharia financing provider, with National Commercial Bank Saudi Arabia on strategic business collaboration on remittance services, and Islamic Payment System Sdn berhad with PT Pos Indonesia on an Islamic payment system network designed to segregate retail money into sharia compliant funds and those that do not  comply with Islamic principles. 

The second MoA, estimated at $350 million, is between national flag carrier PT Garuda Indonesia and Dubai Aerospace Enterprises (DAE), for the sale and leaseback of eight new B737-800 aircraft.

 The third signing, covering two landmark G-to-G agreements estimated to be worth $1 billion, is between Indonesia’s East Kutai Regency of East Kalimantan province and the United Arab Emirates’ (UAE) Ras Al Khaimah (RAK) Investment Authority, for social and economic programs for the region. 

The fourth signing, estimated at $1.7 billion, is between state oil and gas firm Pertamina, the ETA Star Group Dubai, and Itochu Corporation of Japan, to upgrade Pertamina’s Balikpapan refinery. 

“The projects that we signed are more than 50 percent concluded, and we hope that these projects and co-operation will have a snowballing effect,” said Sofyan. 

He said Middle East countries’ investments in Indonesia for the last six years have been substantial, and the  forum shows that Middle East countries are now looking seriously at investment in Indonesia. 

More than 1,557 people, including 1,395 delegates, 85 speakers and reportedly 12 heads of state from 38 countries attended on the first day. 

Ebrahim Patel, the chairman of Minara Chamber of Commerce and Industry in South Africa, said that this had been the largest WIEF since its inception in Malaysia in 2005. 

“The scope of the WIEF  has gone beyond the Organization of Islamic Conference (OIC) nations, it has reached out to non-muslim and western countries which are now creating platforms where interaction between muslim and non muslim businesses can take place,” he said. 

“It’s not just a talkshop it’s an action and project oriented forum,” he added. 

The WIEF was first formed in 2003 during the 10th OIC Summit, and has both corporate and individual members. 

WIEF organizes global and regional forums, with the aim of fostering partnership s between Muslim entrepreneurs and between Muslim and non-Muslim businessmen. The 4th WIEF was held last May in Kuwait. 

At the Forum Muslim countries are promoting increased trade among themselves up to 25 percent in the next seven years to make up for a decline in their traditional markets due to the global crisis. 

The Muslim countries’ share in global trade is about 7 to 8  percent, while their intra-trade has risen  to around 13 percent, as compared to only about four percent in 2004, when the WIEF  was started. 

They account for 19 percent of the world’ population, but only 6 percent of its income. (fmb)

Indonesia realizes promotion to Middle East still insufficient

Jakarta (ANTARA News) - Indonesia realizes that its promotion to the Middle East is still insufficient causing investment from the region remains low. 

The country`s state enterprise minister, Sofyan Djalilm said here on Monday "we are still under-promoted in the Middle East so that only few investors from the region know the country while the potentials in our country are huge." 

The minister said at a press conference on the 5th World Islamic Economic Forum that a Middle Eastern investor told him over a lunch that afternoon about his wife who asked what for when he told her he would leave for Indonesia, impressing that the country was still unknown. 

However, Sofyan who is also a deputy chair of the meeting said the investor immediatelly called his wife upon arrival here to ask her to come to Jakara telling her that "shopping malls here are no less superior than those in the US or Europe." 

So, they really did not know much about Jakarta, the minister said. 

In view of that he hoped the holding of the World Islamic Economic Forum would make Middle Eastern investors know the country better and interested to invest in the country. 

He said he also hoped the forum would lead to agreements as well as their implementation. 

Another deputy chair of the meeting, Tanri Abeng, shared the minister`s view that Indonesia still insufficiently conducted promotion to the Middle East. In view that he said he planned to conduct better promotion efforts. 

"At the end of the meeting on March 4 we would conduct an exhibition on Indonesia to promote the country`s potentials. Moreover more participants attended the meeting this time and more than half of them came from the Middle East. The number of attendees was larger than it was in Malaysia before," he said. 

This means, he said, that Middle Eastern investors began to be interested in the country. "It has never happened before that the number of delegates reaching more than one thousand," he said. 

He said now was the opportunity for Indonesia to attract foreign investors. "They used to look at the US and Europe because of their financial sector but now when the West is in crisis they turned to the East," he said. 

He said investment in Eastern countries would not be the same as in the West. "In the Eastern countries it would go more to the real sector while in the West it would go the financial sector. This means an opportunity for us that have a huge pontential in the sector," he said. 

The chairman of the South African Chambers of Commerce and Industry, Ibrahim E Patel, said the event was an important forum for investors to know more about Moslem countries. 

"Here we would discuss substantial platforms stressing on partnership cooperation. We know that trade knows no state borders, politics, religions and races," he said.