ASEAN Affairs Forum

[Reashot Xigwin]

Local shipping industry eyes 20 percent growth in the next year
Nurfika Osman, The Jakarta Post, Jakarta | Headlines | Sat, December 08 2012, 12:47 PM

The Indonesian National Shipowners Association (INSA) predicts that Indonesia will see around 20 percent growth in the shipping industry next year on the back of the country’s healthy economic performance.

INSA chairwoman Carmelita Hartoto said that most local players, especially those involved in coal and offshore oil and gas, will add more vessels to expand their business in 2013.

“We will have 560 new ships to support national and international trade next year, especially in the coal and offshore oil industries. Despite the eurozone crisis and decreasing demand from China, we are confident that our shipping business will grow because of strong domestic demand,” Carmelita said in Jakarta on Friday at the Indonesia Shipping Outlook Seminar.

The additional 560 ships, including tug boats, bulk carriers, platform service vessels diving service vessels, and tankers, will increase the number of Indonesian flagged ships to 12,600 in 2013.

By operating 12,600 ships, Indonesian shippers are expected to be able to deliver up to 1.2 billion tons of cargo, for both the domestic and international market, she said.

For the year to date, the figure is still below 1 billion tons.

“We predicted that the one billion ton target would be only achieved in the next two to three years. But growth is faster than the estimate. The cabotage policy has also helped Indonesian shippers,” she added.

The government implemented the cabotage principle through a Presidential decree in 2005 requiring all vessels operating in Indonesian waters to be domestically owned.

The rules have brought a number of benefits to the shipping industry indicated by the increasing number of national flagged vessels for domestic maritime transportation and the amount of cargo delivered by the national fleet.

According to INSA data, Indonesia’s shipping fleet has nearly doubled from only 6,041 in 2005 to 12,000 ships in the current national fleet.

Despite the cabotage policy, several types of foreign vessels will be allowed to operate in oil and gas drilling and production activities until 2014, as local companies still cannot provide the technologically advanced facilities and personnel needed for sophisticated extraction activities.

Indonesia’s economic growth has attracted foreign shippers to collaborate with local shipowners to deliver cargo.

“Korea, Germany and Japan are among the countries that have strong interests in working with Indonesian shipping companies next year,” she said, adding that joint venture shipping companies were anticipated in 2013.

The fact that state-owned port operators Pelindo I to IV are now expanding their major ports has encouraged local shipowners to buy more ships.

One of the ports that the shippers are waiting for will be the country’s largest, Kalibaru in North Jakarta, expected to commence first phase operations in 2014 with a capacity of 1.5 million 20-foot equivalent units.

 

[ahfatzia]

Yingluck's rice problem in Thailand

After years as the world's top rice exporter, Thai PM Yingluck Shinawatra's populist policies are causing serious problems.

As the elected senator of northeastern Nakhom Phanom province, Dr. Vitthaya Inala is in a difficult position.

The majority of his roughly 750,000 constituents, many of them poor paddy farmers, are in full support of a year-old government scheme that promises them 15,000 baht ($488) per ton of white rice, he says, far more than they earned in the past.

“If this is a success, and poor farmers get the benefits, it will be very good for the Thai people,” says Dr. Vitthaya. Except the government’s rice-pledging policy is already proving to be a monumental failure, he adds.

Last week, the Senate Committee on Economics, Commerce and Industry, of which Dr. Vitthaya is vice-chairman, filed a damning report blaming the scheme over rampant corruption and a rising mountain of debt as big as the piles of unsold rice fill warehouses across Thailand. A populist policy that was part of the platform propelling the relative unknown Yingluck Shinawatra to power last May, the scheme now threatens to severely damage the government. Some say it could even bring the Prime Minister’s coalition down.

The chairman of the central bank has already criticized the scheme – so too have academics, economists and even the U.S. Department of Agriculture, the latter of whom warned of the policy’s effects on international rice prices – and at the end of this month Prime Minister Yingluck Shinawatra’s Pheu Thai party faces a two-day grilling from the opposition and the Senate all asking the same question: How did it go so wrong?

In theory, the policy makes perfect sense. If you pay farmers above the market rate for paddy they will earn more, Thai rice – already known for its quality – will rise in price and in turn force up prices on world markets.

But at 15,000 baht a ton, and 20,000 baht for high-quality Hom Mali jasmine, critics argue that Thai rice has simply become too expensive. As the government has struggled to sell rice to foreign governments at cost price, an increasing stockpile has accumulated costing the taxpayer a spiraling bill.

A recent Senate report said public debt, which was 42.4% of GDP at the end of April, would rise by an average of 4% per year if the scheme continues, and the Prime Minister has already admitted as much. Having spent 300 billion baht on its rice-pledging scheme this year, the government has earmarked an additional 405 billion baht for 2013, a combined roughly U.S. $33 billion.

Meanwhile, the rice needed to fund this policy remains holed up in storage slowly going bad, according to rice millers. With Thailand in the middle of its second harvest, the government is under pressure to either sell off as much as possible or risk running out of warehouse space. An estimated 14 million tons of rice are currently in storage across Thailand, a new record, and more than the country can sell in a year, even by the government own ambitious goal to export 8.5 million tons of rice in 2013.

Last month, Thai press reports said the Ministry of Commerce had made a deal “in principle” to store rice in an aircraft hangar at Bangkok’s Dong Muang Airport in a bid to find somewhere to put the incoming harvest.

“We are looking for warehouses anywhere,” says Amraporn Suntivong, vice president of the government’s Public Warehouse Association. “We are inviting warehouse owners to come forward.”

When the Democrat Party quizzes the government on the scheme at the end of this month, it is widely expected to point to mounting evidence that warehouse owners are benefiting from the scheme with storage rents having risen sharply in recent months.

Critics also say that coalition politicians are taking kickbacks on contracts from the millers and exporters to whom they have chosen to sell quotas of rice overseas, all while many of the poorest farmers are seeing their prices reduced significantly by the time the money filters down the food chain, albeit while still earning more than before Yingluck Shinawatra took power.

“We don’t know how much rice is in the warehouses, how much is being exported and how much the farmers are actually making – we don’t know anything,” says Democrat Party spokesman Chavanond Intarakomalyasut.

Kreetha Charatkulangkun, director of Tek Seng Rice Mill, a rice export company based in Bangkok, says the scheme has proven devastating for the country’s rice industry.

For years, Thailand was the world’s number one exporter in the world, but is expected to slip to the third position this year, with the U.S. Department of Agriculture estimating it will export 6.5 million tons of rice in 2012 compared with India’s 9.75 million tons and Vietnam 7 million tons.

“In my and many other opinions, the government’s rice-pledging scheme is very extreme and is clearly a vote-buying policy,” says Kreetha. “It is the worst political policy in the history of Thailand.”

As enemies of the state’s rice scheme have queued up to criticize Yingluck’s government, most have pointed fingers squarely at her brother, former Prime Minister Thaksin Shinawatra, who has calmly defended the policy in exile where he remains on the run from a two-year prison term for corruption. A day rarely passes without a Thai newspaper reporting on efforts by Yingluck to smooth her brother’s passage back to Thailand.

Meanwhile, the main farming areas in the north of the country remain as supportive of the current government as they were of Thaksin when he was in power from 2001 to 2006.

In a poll last month by Khon Kaen University in the northeastern Isan region (which includes Nakhom Phanom province), 81% of respondents said they supported the government’s overall performance, even if only 46.8% backed its performance on the economy, a figure much lower than in many other areas including the coalition’s handling of democratization, social issues like crime and drug use, foreign policy, and environmental protection.

Suthin Wainwiwat, director of E-Saan Poll which conducted the survey, said as long as the Shinawatras continue their populist policies aimed at the millions of families who farm in the north they will remain unstoppable at the ballot box, no matter the criticism in Bangkok.

“They support Yingluck because they hope that Thaksin will be able to come back and help them again,” he said.

How Rice is Causing a Crisis in Thailand - The Diplomat

 

[Reashot Xigwin]

Selling to China & India’s Middle Class – It’s a Vietnam Manufacturing Play

Op-Ed Commentary: Chris Devonshire-Ellis

Mar. 20 – Later this week, I’ll be speaking at the U.S. Department of Commerce “Hot Market Watch” event in Cincinnati. My (two) keynote lectures are about China and Vietnam, and with a little bit of India thrown in for good measure. The reasons for this are that the market dynamics over the global supply chain, the subsequent manufacturing base for that, and the opportunity to sell to more Asian consumers than ever before are all shifting. It’s something I’m looking forward to – having seen our firm, Dezan Shira & Associates, through 20 years of foreign investment advisory work in China. Six years ago we moved to do the same in India and, four years ago, to Vietnam. We spotted these changing dynamics way back, invested ourselves in these markets, and are now primary advisers to foreign investors throughout the emerging Asia region

Read more


Private equity looks to Vietnam and Indonesia - survey

By Costas Pitas

LONDON | Sun Dec 9, 2012 7:01pm EST

Dec 10 (Reuters) - Higher prices for companies in North America and political and regulatory risks in China are leading private equity investors to consider the emerging markets of southeast Asia, a survey has found.

Private equity firms that raised money from pension funds, insurers and endowments on the promise of delivering superior returns, have unearthed few deals in China and have competed fiercely for the businesses they can find, pushing up prices.

The trend to higher prices is echoed in private equity's largest market, the United States, where the supply of cheap financing from lenders has given buyout firms the firepower to pay more for companies.

Nascent Asian economies such as Indonesia and Vietnam were favoured by one fifth of investors over the region's more mature markets including China and India, according to a survey conducted by private equity firm Coller Capital.

Over half of the 131 investors questioned said the industry had been too optimistic about China and 69 percent felt the same about India citing issues around politics, corruption and regulation.

"It's partly a matter of people understanding the risks better and partly a matter of increasing competition, as more and more money, both domestic and international, chases deals in China," Jeremy Coller, Chief Investment Officer at Coller Capital told Reuters.

The Coller findings, based on a survey of investors in private equity funds from North America, Europe and Asia-Pacific, also reflect concerns over the long-term future of investment in the United States.

Two thirds of North American investors said that the poor performance of initial public offerings (IPOs) - when a company is first floated on the stock exchange - was likely to last for the foreseeable future.

"One of the universals is certainly the weight of legislation and the extra cost. Becoming a public company is more costly and more onerous in terms of regulation than it used to be," Coller said.

Global IPO activity has been weak following the 2008 financial crisis although an improvement in new share issuance towards the end of the third quarter could pave the way for a rebound in 2013, bankers have said.

U.S. leveraged buyout deals were up 27 percent in the first three quarters of 2012 compared with the previous year, and 96 percent higher in the third quarter at $28.9 billion, according to Thomson Reuters data.

Private equity firm CVC last month hired banks to sell a stake in Indonesian department store Matahari, hoping to double the value of its investment within just two and a half years.

 

[ahfatzia]

Farming in the sky in Singapore


SINGAPORE - With a population of five million crammed on a landmass of just 715 square kilometers, the tiny republic of Singapore has been forced to expand upwards, building high-rise residential complexes to house the country's many inhabitants.

Now, Singapore is applying the vertical model to urban agriculture, experimenting with rooftop gardens and vertical farms in order to feed its many residents.

Currently only 7% of Singapore's food is grown locally. The country imports most of its fresh vegetables and fruits daily from neighboring countries such as Malaysia, Thailand and the Philippines, as well as from more distant trading partners like Australia, New Zealand, Israel and Chile.

An influx of immigrants has resulted in a rapid crowding of Singapore's skyline, as more and more towering apartment buildings shoot up. And meanwhile, what little land was available for farming is disappearing fast.

The solution to the problem came in the form of a public-private partnership, with the launch of what has been hailed as the "world's first low carbon, water-driven rotating vertical farm" for growing tropical vegetables in an urban environment.

The result of a collaborative agreement between the Agri-Food and Veterinary Authority of Singapore (AVA) and a local firm, Sky Green, this venture aims to popularize urban farming techniques that are also environmentally friendly.

With a robust economy that boasts a gross domestic product of US$239.7 billion, Singapore has plenty of money. "But money (is) worthless without food," according to Sky Green Director Jack Ng.

full story: Asia Times Online :: Southeast Asia news and business from Indonesia, Philippines, Thailand, Malaysia and Vietnam

 

[ahfatzia]

Retailers leave China for Southeast Asia

Lotte Mart’s third store in Vietnam, which opened on Nov. 29.


Department stores, discount store chains and other retailers, which rushed to set up presence in China over the past few years, are increasingly turning their eyes to Vietnam and other rapidly growing Southeast Asian nations.

Some retailers have decided to downsize their operations in the world’s second largest economy, with others completely pulling out due to falling sales and rising costs. Korean and other foreign firms doing business in China have been hit by excessive competition, growing regulatory risks, and soaring labor and other expenses.

In contrast, Southeast Asia, which has been growing at a steady pace despite the ongoing global economic downturn, has emerged as the Eldorado for local retailers seeking to find new consumer markets. They have begun establishing operations in the region to target tens of millions of increasingly wealthy consumers there.

According to retail industry sources, Thursday, Shinsegae and Lotte _ Korea’s two largest retail giants _ have decided to scale down their operations in China, which have failed to make money.

E-Mart, the country’s largest discount store chain affiliated with Shinsegae Group, used to run 27 outlets in China. But over the past two years, it has shuttered 11 money-losing stores. The remaining 16 are still in operation but unlikely to post profits this year.

“We have completed the overhaul of our China business. So, things will be much better for our unit there this year and beyond,’’ an E-Mart spokesman said. “We will focus more on rapidly growing urban centers in southeastern and northern parts of China.’’

E-Mart also plans to enter Vietnam for new business opportunities. In cooperation with Vietnamese investment group U&I, it will open the first E-Mart store in Hanoi in 2013.

“We will place top priority on expanding our presence in Vietnam and other Southeast Asian nations to capitalize on the growing consumer market and foreign business-friendly environment. We look forward to doing business there,’’ the spokesman said.

The situation is not much different for retail units of Lotte Group. Lotte Department Store plans to complete the sale of its Beijing outlet early next year. The store has been incurring losses since opening in 2008. In 2011, it lost 28.1 billion won ($26 million).

In contrast to its shrinking China operation, Korea’s largest department store operator plans to build new branches in Southeast Asia. Lotte will open a store in Jakarta next year and in Hanoi in 2014.

Lotte Mart, the group’s discount store unit that currently operates 100 outlets in China, 30 in Indonesia and three in Vietnam, has also begun putting greater emphasis on Southeast Asia.

“The region holds a huge potential for growth. We will focus more on Indonesia and Vietnam to take advantage of growing consumer markets,’’ a Lotte Mart spokesman said. “We just opened our third store in Vietnam and plan to set up two more next year. We have seen faster sales growth in the two countries than China.’’

Bakeries in Southeast Asia

Korea’s bakery franchises have also established a strong presence in the region to seek new revenue sources with the local market having reached saturation point.

Paris Baguette of SPC Group, the country’s largest bakery operator, set up its first Southeast Asian store in Ho Chi Minh City in March. It opened its second store in Singapore in September.

It operates 102 stores in Beijing, Tianjin and other Chinese cities. In the U.S., 21 Paris Baguette bakeries are run by local units in Los Angeles and New York.

Another major local bakery CJ Foodville’s Tous les Jours, which entered the region in 2007, aims to become the largest bakery franchise in the region by sales in 2013.

It has set up bakery shops in Vietnam and Indonesia and is expanding its business in the Philippines, Malaysia and Cambodia.

The company currently operates a total of 42 outlets in the region and will open more to cater to young consumers, many of whom are hallyu fans.

Retailers leave China for Southeast Asia | THEAsiaN

 

[ahfatzia]

Asean Chair Urges North Korea to Call Off Rocket Launch


Phnom Penh. Cambodian Prime Minister and Asean chairman Hun Sen urged North Korea Monday to scrap a planned rocket launch, saying it would bring "fear and tension" to the region.

Pyongyang on Monday pushed back the window for the controversial planned launch by a week to December 29, but stressed it was pressing ahead with the mission in the face of international condemnation.

"In the name of the Asean chair, I appeal to North Korea to postpone the launch forever," Hun Sen said in a speech on national radio. "The launch will bring no benefits but only fear in the region and tension."

The premier said he had "the right to speak out" after foreign ministers of the 10-member Association of Southeast Asian Nations failed over the past week to reach agreement on a draft statement about the launch.

Hun Sen said his Foreign Minister Hor Namhong had been in talks with Asean counterparts but they could not reach "a consensus" on Cambodia's draft. He did not elaborate.

Pyongyang extended the December 10-22 window for the launch by a week due to a "technical deficiency," the Korean Committee of Space Technology said in a statement carried by the official Korean Central News Agency.

North Korea says the rocket launch is a peaceful mission aimed at putting a satellite in orbit.

The United States and its allies view it as a disguised ballistic missile test banned under UN resolutions prompted by the North's nuclear tests in 2006 and 2009.

Asean Chair Urges North Korea to Call Off Rocket Launch | The Jakarta Globe


It's good to see ASEAN participation in international geopolitical matters.

 

[nufix]

s

Retailers leave China for Southeast Asia


In contrast to its shrinking China operation, Korea’s largest department store operator plans to build new branches in Southeast Asia. Lotte will open a store in Jakarta next year and in Hanoi in 2014.

Lotte Mart, the group’s discount store unit that currently operates 100 outlets in China, 30 in Indonesia and three in Vietnam, has also begun putting greater emphasis on Southeast Asia.

“The region holds a huge potential for growth. We will focus more on Indonesia and Vietnam to take advantage of growing consumer markets,’’ a Lotte Mart spokesman said. “We just opened our third store in Vietnam and plan to set up two more next year. We have seen faster sales growth in the two countries than China.’’


Retailers leave China for Southeast Asia | THEAsiaN

There are already many local retails such as Indomart and Alfamart which have retail stores up to village and sub-district level. They are not going survive long in Indonesia, Carrefour Indonesia has been bought by Indonesia's firm Trans corp, and soon Giant mart will be acquired too. That's why in Indonesia, it is hard to find foreign retail stores like walmart.

 

[Zero_wing]

Philippine Exports up↑ 6.1% to $4.4 Billion USD in October 2012 | Rebuilding for the Better Philippines

 

[ahfatzia]

China Seeks ‘Good Relationship’ With ASEAN


China, the world’s most populous nation, is not likely to take any hard-line economic policy toward Indonesia and other Southeast Asia nations that make up Asean, as its incoming president, Xin Jinping, takes power in March.

“China needs to make a good relationship with Asean. Since 2000, China has seen Asean as one potential trading bloc,” Richard Tan, executive board chairman at the Indonesian Chinese Entrepreneur Association said on Friday.

“It shook hands with Asean for a free-trade pact before Asean had set up one with Japan and Korea,” he spoke after a seminar attended by Indonesian graduates of Tsinghua University in Beijing at the Borobudur Hotel.

China Daily reported on Sept. 22 on its website that Xi, in addressing the annual China-Asean Business Investment Summit in Nanning, Guangxi province, wanted a stronger trade and economic relationship between China and the Association of Southeast Asian Nations despite a dispute over territorial claims in the South China Sea. Asean’s 10 members are Indonesia, Thailand, Vietnam, Malaysia, Singapore, the Philippines, Brunei, Cambodia, Laos and Myanmar.

Richard was confident that the rising tension would not derail China’s intention to forge a stronger economic tie with the bloc. The Philippines and Vietnam protest intrusions by China into areas that the two nations claim are part of their territories.

Xi Jinping will be more moderate ... his country is getting bigger, it means a bigger responsibility and more difficult to govern. It will be hard to make any sharp maneuver, including derailing the already good relationship with overseas partners,” Richard said.

ICEA was established in Indonesia by prominent ethnic-Chinese enterpreneurs like Liem Sioe Liong, who is the founder of Salim Group; Eka Tjipta Wijaya, who is the founder of Sinar Mas; and Sukanto Tanoto, who is the founder of Royal Golden Eagle International.

The organization has played an important role in promoting Indonesia in China and abroad through trade fairs, investment and trade seminars, publications, education and training.

Asean has been among the top destinations for Chinese companies. Bilateral trade jumped to $292.78 billion in 2010 from $7.96 billion in 1991, according to Xinhua, the Chinese state media. The two economies seek to achieve $500 billion in trade by 2015, through a free-trade pact that was signed in 2004 and was implemented in 2005, according to a report by China Daily.

China confirmed its economic strength on Sunday with the release of some economic figures. Its National Bureau of Statistics announced that there was a double-digit increase in production at factories, workshops and mines for the first time since March, suggesting that the world’s second-biggest economy is weathering the effects of global slowdown.

Rizal Sukma, the executive director of the Center for Strategic and International Studies — a Jakarta-based think tank — said Asean should take advantage of a chance to boost trade with China, just as growth in western economies is slowing. China’s influence is rising and is challenging the United States’ economic dominance, he said.

“We should maintain all economic cooperations that are possible,” he said.

Indonesia had good relations with China during the presidency of Sukarno in the 1950s and early ’60s. That relationship turned under President Suharto, a strong anti-communist, but has strengthened in the past decade.

China Seeks ?Good Relationship? With Asean | The Jakarta Globe

 

[Reashot Xigwin]

What's happening to the ASEAN we know & love

Experts Suggest Asean Take a Vote To Make Decisions
Jakarta Globe | November 20, 2012

Seven of the 10 Asean leaders, including Indonesian President Susilo Bambang Yudhoyono, far right, join hands for a photo at the 21st leaders summit in Phnom Penh on Monday. (AFP Photo/Romeo Gacad) Seven of the 10 Asean leaders, including Indonesian President Susilo Bambang Yudhoyono, far right, join hands for a photo at the 21st leaders summit in Phnom Penh on Monday. (AFP Photo/Romeo Gacad)

With leaders of the Association of Southeast Asian Nations on the brink of failing to agree on how to handle the South China Sea disputes, experts here have suggested that the 10-nation bloc abandon its consensus decision making to allow it to decide on divided issues.

“It could be the end of Asean as we know it. There will be too many divided issues for them to get a consensus every time. Different positions toward South China Sea has proven it,” said Bantarto Bandoro, an international relations expert from the Indonesia Defense University.

“To be able to survive, Asean must use non-Asean ways, such as voting to reach a decision.”

Bantarto said by adopting a voting system to make decisions, the bloc could become a more credible organization as it would always be able to come out with a solution.

“Having a vote for a decision-making process would make them stronger from outside influences that can tear them apart, such as from China and the United States,” he said.

In its 45 years of existence, Asean has followed the so-called “Asean way,” which has been based on consensus decision-making in a sense that rejection of any one member would prevent the group from making a decision.

Meanwhile, Aleksius Jemadu, dean of Pelita Harapan University’s School of Social and Political Sciences, said that by the end of the day all Asean members would prioritize their perceived national interests and abide by domestic pressure rather than following loose regionalism such as Asean.

“What has Asean offered? Many people within the Southeast Asian region don’t feel the benefits of having Asean around. So, it’s pretty clear that the members would put their respective interests, in this case their territorial integrity, over Asean unity,” he said.

Both Bantarto and Aleksius agreed that when it came to national interests, such as territorial claims, Indonesia could not do much to bridge the gap.

Asean members Vietnam, the Philippines, Malaysia and Brunei, as well as Taiwan, have claims to parts of the sea. But China insists it has sovereign rights to virtually all of the sea. In an attempt to challenge China, the Philippines and Vietnam have relied on US support while Cambodia, the current chair of Asean, has been a close ally of China.

In a display of polarizing between China and the United States, the 10 Asean members have been divided during their summit on Sunday and Monday in Phnom Penh, on whether or not to come out with a legally-binding code of conduct for the South China Sea.

Cambodian Prime Minister Hun Sen said in their meeting on Monday that all 10 members of the bloc had agreed at a leaders’ summit on Sunday to not “internationalize” their disputes over rival claims to the South China Sea.

However, Philippine President Benigno Aquino abruptly raised his hand and tersely interjected. “There were several views expressed yesterday on Asean unity which we did not realize would be translated into an Asean consensus,” he said, according to his spokesman. “For the record, this was not our understanding. The Asean route is not the only route for us. As a sovereign state, it is our right to defend our national interests.”

Alternative diplomatic routes for the Philippines would likely involve the United States, a close ally that has said it has a national interest in freedom of navigation through the South China Sea’s vital shipping lanes. Cambodia’s political and economic ties with China have strengthened in recent years. “I think it’s very difficult to reach a consensus for the South China Sea issues. The Philippines will not budge while Cambodia will continue to protect China’s interests. It will end up like the July meeting,” Bantarto said.

An Asean foreign ministers’ meeting in Phnom Penh ended in July without issuing a joint communique for the first time in the bloc’s 45-year history because of divisions over how to handle the issue.

Additional reporting from Reuters, AFP

 

[nufix]

Indonesia's Wheat Imports Set to Jump at Least 19% on Flour Tax

Siem Reap, Cambodia. It was a chilly afternoon in 1993 at a rubber plant forest in Kampong Cham. Soehardjono Sastromihardjo, now Indonesian ambassador to Cambodia, was riding with a United Nations Transitional Authority in Cambodia convoy on a mission to supervise the country’s first general election, when a group of Khmer Rouge guerrillas appeared and stopped the convoy.

AK-47 rifles and grenade launchers were pointed at the trucks, ready to fire; a slight misstep could have resulted in disaster.

Without thinking, Soehardjono shouted: “Indonesia, Indonesia!”

Almost instantly the guns were lowered and the guerrillas retreated.

“That shows how high our name was held in Cambodia,” Soehardjono said in Siem Reap over the weekend, recalling the incident. “And it is still true now particularly among the political elites.”

Indonesia was involved in advanced talks in Cambodia during the late 1980s. Known as the Jakarta Informal Meeting, Indonesia was trying to help put an end to Vietnam’s invasion of Cambodia, in what some observers called the Third Indochina War (1978-91).

Despite these close ties, however, Indonesia has been slow to benefit from trade and investment with Cambodia, often finding itself behind other countries eager to get a foothold in the country. Indonesia’s exports to Cambodia last year were worth about $220 million, according to Soehardjono. That is a tiny drop in the $12.3 billion in total trade that Cambodia did last year.

China and Thailand made up more than half (52.5 percent) of Cambodia’s imports of $6.9 billion last year, while the United States accounts for the lion’s share of Cambodia’s exports (41.5 percent), according to the CIA World Factbook.

“We must capitalize on our close political assets for better economic ties,” Soehardjono said. He spoke in an interview with the Jakarta Globe, which was invited by the Indonesian government to attend an Asean meeting this week.

Mohamad Helmi, business development director of Galuh Prabu Trijaya, an Indonesian trading company, echoed the sentiment.

“I came to start a business here seven years ago,” Helmi recalled, “I found Cambodians disappointed. They wondered why, right after peace, Indonesians stopped coming here.”

Helmi said the Cambodian government has been very accommodating to investors, and encourages more Indonesian businesses to come to the country.

Talks to push business ties between the two countries have been held. Soehardjono said Cambodian Prime Minister Hun Sen asked three things of Indonesia on the sidelines of the Asean Summit in Bali, last November. He wanted Indonesia to import rice from Cambodia, have direct flights between the countries and invest in its telecommunications sector.

Cambodia has exported rice to Vietnam, Thailand and Europe.

“Ironically, we import rice from those two countries,” Soehardjono said. “Why don’t we import directly from Cambodia?”

Hun Sen asked for direct flights between Indonesia and Cambodia to boost tourism in the two countries. A province in Central Java has a “sister temple province agreement” with Cambodia’s Siem Reap province. As part of the agreement, the Central Java government suggests that tourists at Borobudur Temple visit Angkor Wat Temple, and vice versa.

“That arrangement won’t work if it takes a whole day to travel between the two places,” Soehardjono said.

A tourist flying on Malaysia Airlines from Jakarta to Siem Reap, for example, would have to spend four hours on the plane and another four hours in transit at Kuala Lumpur International Airport.

The third request from Hun Sen was for Indonesian telecommunications company Telekomunikasi Indonesia to invest in Cambodian telecommunications provider CamGSM. Telkom pulled out of the bidding in October last year prior to the talks, partly because of price differences.

Cambodia’s economy has been growing at 6 percent annually for the last two years, pointing to a promising future for investors in the country.

Soehardjono said it was now up to the Indonesian business community to enter the Cambodian market. “Our consumer products are in high demand, in particular our pharmaceuticals, which they regard as having good quality,” he said, adding that agricultural machinery, fertilizer and tires from Indonesia were also well received.

Helmi said the agricultural sector in Cambodia was lucrative with low labor costs and improving yields.

And foreign investors can hold up to a 100 percent stake in Cambodia, though that could change in 2015. “So, if my fellow Indonesians want to come to Cambodia, the time is now,” he said.

Indonesia Bonding With Cambodia in Trade | The Jakarta Globe


I wish Indonesia's businessman would stop thinking that business prospect in Cambodia is low. In the meantime, Cambodia has great agriculture products which Indonesia needs because Indonesia can't provide them by itself, many of Indonesia's agricultural fields were turned into rails, road links, power plant, and Industrial parks following industrialization plan by Mr. Vice President. If Indonesia able to invest modernized plantation and farming like in Nigeria, Indonesia may be able to gain benefit from crop sharing.

 

[nufix]

Indonesian Firm Seeks to Build Nuclear Medicine Factory in US

Indonesia’s state-owned nuclear technology firm Batan Teknologi (BatanTek) plans to build a nuclear medicine factory in the United States by 2013 to produce radioisotopes for the US market.

Indonesia’s State Enterprises Minister Dahlan Iskan said on Tuesday that BatanTek’s president director, Yudiutomo Imardjoko, was currently in the United States to negotiate details of the plan with US officials, among others.

He said the subsidiary of the National Atomic Energy Agency (Batan) has been exporting radioisotopes for medical purposes to several countries in Southeast Asia, and will start shipping them to China and Japan as well next month.

The US market has also expressed interest in BatanTek products. However, shipping is problematic due to radioisotopes’ nuclear instability, thus the plan to build a production factory in the United States.

“I’ve approved of [the factory proposal]; we expect to conquer the US [radioisotope] market,” Dahlan said, adding that BatanTek had developed a new radioisotope technology that even the United States did not yet have.

He further said construction of the factory was expected to be completed in 2013, and that BatanTek was in the process of recruiting Indonesian graduates with nuclear expertise to prepare for its operations.

“We will also coordinate with the state minister for research and technology [to support the operations],” Dahlan said, as quoted by the Indonesian news portal vivanews.com.

Indonesian Firm Seeks to Build Nuclear Medicine Factory in US | The Jakarta Globe

Despite the news, having decades of experience in nuclear technology, and exporting radioactive materials, yet Indonesia hasn't put interest in building Nuclear Power Plant.

 

[ahfatzia]

ASEAN launches disaster emergency logistics system

The ASEAN Coordinating Centre for Humanitarian Assistance on Disaster Management (AHA Centre) has officially launched a Disaster Emergency Logistic System for ASEAN.

The launch of the system indicates an ongoing process for improving disaster management in the region and its existence will complete AHA Centre’s roles.

“The Disaster Emergency Logistic System is developed to ensure a quick availability of emergency relief items that can be accessed by member states following medium to large-scale disasters”, Executive Director of AHA Centre, Said Faisal said in a press release.

According to Deputy Secretary General of ASEAN for Socio-Cultural Community, Alicia Dela Rosa Bala, the fact that an operational AHA Centre, which is ready to complement the efforts of governments and lead in a regionally-coordinated disaster response if such an action is requested and becomes necessary, is quite remarkable. It is a testament to the commitment of ASEAN leaders to realising the vision of a disaster-resilient community.

After its establishment on 17 November 2011, the Jakarta-based AHA Centre has been functioning conducting disaster risk monitoring on daily basis, generating and sharing information to the National Disaster Management Organisations (NDMOs) in ASEAN member states.

Soon after disaster strikes, AHA Centre deploys its team to conduct rapid assessments, and to deliver aid to affected ASEAN member countries./.VNA

ASEAN launches disaster emergency logistics system -- Vietnam+ (VietnamPlus)


ASEAN nations are prone for many natural disasters and, hopefully, AHA Center can alleviate some of the sufferings.

 

[Reashot Xigwin]

ASEAN services to flood RI
Linda Yulisman, The Jakarta Post, Jakarta | Headlines | Thu, December 13 2012, 12:02 PM

Indonesia is slated to ratify the eighth package of the ASEAN (Association of Southeast Asian Nations) Framework Agreement on Services (AFAS) next year, which will further open the country’s service sector to regional players.

The deal is a prelude to the establishment of the ASEAN single market in 2015 that will see free flows of labor, trade and services among the association’s member nations.

AFAS ratification will affect sectors related to telecommunications, business services, education, tourism, health, recreation and logistics, covering around 22 subsectors, according to the Trade Ministry.

The agreement is expected to strengthen Indonesia’s commitment to the liberalization of the sectors by 2015.

“In 2015, companies [from other ASEAN nations] will be able to have as much as 70 percent of foreign equity participation in Indonesia,” said the ministry’s director for trade and service negotiations, Sondang Anggraini, on Wednesday during a workshop hosted by the ministry.

The government is preparing several legal frameworks to further regulate the service trade that will help local firms to achieve greater gains from liberalization, such as by selling services to other countries, according to Sondang.

“The policy will help shift the country’s source of foreign currency from the export of goods to the export of services,” Sondang said.

In recent years, Indonesia has seen a rise in the contributions made by the service sector to its economy.

Service-related sectors accounted for 53.13 percent of gross domestic product (GDP) in 2011, up from 48.20 percent in 2006.

Indonesia Logistics and Forwarders Association (ALFI) executive director Theo Kumaat was cautious about liberalization in the logistics sector, as it would severely impact local logistics players still struggling with output inefficiency.

According to Theo, Indonesia’s high costs of doing business had undermined its performance relative to its regional peers.

Indonesia ranks 59th on the World Bank’s 2012 logistics performance index, lower than fellow ASEAN members Vietnam and the Philippines

Despite the low ranking, Indonesia has seen a significant improvement in logistical handling competency and tracking systems, according to the World Bank.

“Most of our local companies are not yet ready to compete with regional players. If the government insists on liberalization, I am afraid that local players will only deal with subcontracting work to serve foreign companies,” Theo said.

The logistics sector, according to Theo, was still grappling with a shortage of skilled local workers. Opening more doors for more skilled foreign workers could result in jobs filling up once liberalization takes place.

In anticipation of changes in labor regulations, local stakeholders are planning to set up an institution that will establish standards and certifications for both local and foreign workers.

Liberalization of logistics services under the eighth AFAS comprises two major sectors: packaging and freight transportation, including maritime, freight, rail and road transportation; cargo handling services; storage and warehousing; freight transportation agency services; and courier services.

Indonesian Logistics Association (ALI) chairman Zaldy Masita said the government should keep the 49 percent cap for foreign ownership in local firms ahead of 2015.

“In general, our domestic players are not ready because there are so many issues that have yet to be addressed by the government. Only big local firms will thrive under liberalization,” he said.

At present, several foreign companies own majority stakes of up to 95 percent in local logistics firms as they operated before the government included logistics on a list of investments restricted for foreign entities in 2010. At present, foreign ownership is capped at 49 percent.

Papua to enjoy broadband next year
Mariel Grazella, The Jakarta Post, Jakarta | Business | Wed, December 12 2012, 11:48 AM

Indonesia’s easternmost province of Papua will connect to high-speed Internet later than scheduled after the Communications and Information Ministry said that broadband would make headway into the province in 2013.

Communications and Information Minister Tifatul Sembiring said that as many as 27 provinces across Indonesia now had access to broadband Internet via the Palapa Ring.

The Palapa Ring is a project aimed at linking Sumatra, Kalimantan, Nusa Tenggara, Sulawesi, Maluku and Papua to eight existing network connections, or backhauls, via approximately 35,380 kilometers of undersea and 2
1,870 kilometers of underground fiber-optic cables.

Fiber optics, unlike copper cables, enable fast data transmission, a prerequisite for broadband Internet. The ministry and a consortium of telecommunication companies kicked off the project, worth US$700 million, in 2009 and targets its completion by 2014.

“The establishing of broadband connections has been carried out across the provincial capital cities located on Java island,” he said on Tuesday.

He added that major cities and industrial hubs including Jakarta and its surrounding areas, as well as Bandung and Semarang, were already connected to broadband Internet.

However, five cities still have to wait until next year for broadband connections. “The cities include Jayapura, the capital of Papua, Manokwari [West Papua capital], and Ternate [in North Maluku], in addition to Kendari in Southeast Sulawesi and Ambon [Maluku capital],” he said.

He added that broadband penetration across the 27 provinces was “still low, lower than 12 percent”. “Ideally, the penetration rate should be at 100 percent,” he said.

He added that the government aimed to connect all major cities and industrial hubs in Indonesia with broadband connections by 2015.

“Our target is to even connect homes with fiber optic cables,” he said.

Under the national broadband plan, the government plans to transform Indonesia into a knowledge-based society by 2015 by improving Internet access. By 2020, the government expects the country to have gone digital through the application of e-government initiatives.

However, besides the still low Internet penetration rates, e-government schemes have lagged. Several regions have pushed back the disbursement dates for electronic identification, or e-KTP.

Tifatul said the contribution of information technology, which includes the Internet, toward the gross domestic production (GDP) has risen in the last decade.

A study by the World Bank shows that a 10 percent rise in broadband penetration would increase GDP by 1.38 percent.

 

[ahfatzia]

Cambodia snubs critical UN envoy

The UN human rights envoy to Cambodia voiced regret Friday at an apparent snub by government officials adding he was also "surprised" by criticism he has received for highlighting rights abuses.

Surya Subedi, UN special rapporteur on the situation of Human Rights in Cambodia speaks to the media in Phnom Penh on May 9, 2012. Subedi voiced regret Friday at an apparent snub by government officials adding he was also "surprised" by criticism he has received for highlighting rights abuses.

"I very much regret that I was not able to interact with government interlocutors this time," Surya Subedi told reporters in Phnom Penh, after a trip to Cambodia concluded without the usual meetings with senior officials.

"I would be looking to hear directly from the government, from appropriate channels, as to the reasons why," he said.

The snub comes after Subedi published reports this year expressing concern over an uptick in violent land conflicts, freedom of speech restrictions and a perceived lack of independence in the court system.

Strongman Prime Minister Hun Sen indicated on Thursday that he had no intention of meeting Subedi, warning against people acting "like the bosses of Cambodia".

"I don't have time to meet him and listen to his advice," he said in a speech on national radio. "Why is it for me to take responsibility before foreigners?"

It marks the second time Hun Sen has openly lashed out at Subedi, after urging the Nepal-born envoy in October to "go and help his own country".

Subedi, who became UN special rapporteur for human rights in Cambodia in 2009 after his predecessor resigned amid a war of words with Phnom Penh, said he was taken aback by the personal attack.

"I must say I am a little surprised by the reaction to some of my recommendations," he said. "The focus should remain on the substance of what I am recommending, and not on me as a person."

But he added that he was "hopeful" of returning to a normal working relationship with the government soon.

The Cambodian government has faced mounting criticism from rights groups in recent years for allegedly cracking down on dissidents and protesters in cases that are often linked to land disputes.

Subedi expressed "serious concern" in the high-profile case of jailed government critic and radio station owner Mam Sonando who was denied bail by a court of appeal on Friday.

US President Barack Obama told Hun Sen last month that his government's human rights violations were "an impediment" to better bilateral ties.

Cambodia snubs critical UN envoy | Bangkok Post: news

...............


Thailand militants vow more attacks on teachers

Bomb squad members inspect the site of a roadside bomb attack by suspected separatist militants on an army vehicle in Thailand's restive southern province of Narathiwat.


BANGKOK: Thailand pledged on Friday to tighten security for teachers in its restive south as a leaflet campaign threatened further violence against educators amid widespread school closures over safety fears.

Two teachers were shot dead on Tuesday in the latest in a spate of attacks on educators. Lessons have been halted at around 1,200 schools this week in the Muslim-majority south, where nine years of unrest have cost thousands of lives.

Education Minister Phongthep Thepkanjana told reporters that "officials must intensify security measures" for teachers, often targeted by militants who see the education system as an effort by Bangkok to impose Buddhist culture.

Leaflets threatening further violence against educators, timed to coincide with a visit to the region on Thursday by Prime Minister Yingluck Shinawatra, have also raised the stakes, said Phongthep.

"We have to seriously beef up security for teachers," he said, adding that authorities hoped increased safety measures for some 20,000 teachers in the region would enable schools to reopen on Monday.

The leaflets, which were not signed by any group, read "The war is not yet over, don't count the teachers' corpses yet", said Sanguan Intarak of the local teachers' association.

He said they were believed to have been distributed in Songkhla province, which borders the restive region, because security is lighter in the area.

Near daily attacks - including shootings, bombings and even beheadings - mean violence is a part of life for many in Thailand's southern provinces of Narathiwat, Pattani and Yala.

More than 5,300 people, both Buddhist and Muslim, have been killed since the unrest reignited in 2004, according to Deep South Watch which monitors the unrest.

The violence has left 157 educators dead and the United Nations this week said it had claimed the lives of more than 50 children.

Tuesday's violence saw a headmistress and teacher shot dead at a school in Pattani, while a separate attack at a teashop in Narathiwat left five dead, including a baby girl.

Last week in Narathiwat a 32-year-old teacher was killed by gunmen as she left school on Monday and another teacher was shot and wounded the following day.

In the latest attack in the region, Narathiwat police said six soldiers were wounded in a roadside bomb attack in the province early Friday.

Thailand militants vow more attacks on teachers - Channel NewsAsia


Thailand must safeguard her students and teachers.