Indonesia Economy Forum

[Nike]

In Meeting With SBY, Japan Industry Leaders Pledge Continued Investment
By Primus Dorimulu on 10:00 am December 16, 2013.
Category Business, Economy
Tags: Indonesian President Susilo Bambang Yudhoyono, Japan-Indonesia
Tokyo. Top Japanese companies have expressed their interest in expanding their investment in Indonesia, following their meeting with President Susilo Bambang Yudhoyono in Tokyo last week, according to the head of Indonesia’s Investment Coordinating Board, or BKPM.

Yudhoyono, accompanied by a number of cabinet ministers and officials, attended a dinner on Friday with around 20 senior management figures representing companies such as Toshiba, Panasonic, Mitsubishi, Marubeni, Bank of Tokyo Mitsubishi, Itochu, Taisei, Toray Industries and Sumitomo Mitsui Banking.

“Traditionally, these corporations have been willing to set up operations in Indonesia,” Mahendra Siregar, the BKPM chief, said on Friday.

Japanese Prime Minister Shinzo Abe affirmed the country’s intention to play a bigger role in helping boost Indonesia’s economy.

According to data from the Japan External Trade Organization (Jetro), in the first nine months of 2012 Indonesia ranked as the top investment destination of choice for Japanese businesses in Southeast Asia.

Japanese investors are especially active in the transportation sector, basic industries like cement, metals, machinery, electronics, petrochemicals, raw materials and pharmaceuticals.

From January to September this year, realized Japanese investment in Indonesia stood at $1.15 billion from 278 projects.

The figure is down sharply from the $2.45 billion worth of investment in 405 projects recorded in 2012. The shortfall is seen as a direct consequence of tighter liquidity on world markets.

Total trade between Japan and Indonesia for the first three quarters of 2013 stood at $32.23 billion, with Indonesia running a surplus of $5.13 billion.

In Meeting With SBY, Japan Industry Leaders Pledge Continued Investment - The Jakarta Globe

 

[Indos]

Ore export ban will force
Freeport to halt most operations
Raras Cahyafitri, The Jakarta Post, Jakarta | Business | Fri, December 13 2013, 8:38 AM

Troublesome times ahead?: Freeport Indonesia’s Grasberg mine complex in Papua is one of the largest copper and gold mines in the world, but the company will have to cut production by at least 60 percent if the government does not ease a regulation on a raw mineral export ban. (AFP/Olivia Rondonuwu)

PT Freeport Indonesia, a subsidiary of US-based Freeport McMoRan Copper and Gold Inc., says it may have to shut down most operations at its Grasberg mine in Papua if the ban on raw ore exports set to take effect in January goes through as planned.

Freeport Indonesia president director Rozik Soetjipto said on Thursday that the company would have to cut its production by 60 percent, since the existing smelting plant it used would not be able to process the company’s entire ore output.

He also said that the copper and gold mining giant would have to lay off more than half of the company’s employees, or around 16,000 workers. “If forced, we are ready with production adjustment. However, we don’t know how long that can last.

The overhead cost will be huge, and layoffs will happen,” Rozik said over the phone on Thursday.

Currently, Freeport Indonesia delivers 40 percent of its annual production of around 2.5 million tons of copper concentrates to a local smelter belonging to PT Smelting in Gresik, East Java. The company has a 25 percent stake in Smelting, which produces 300,000 tons of copper cathode per year.

Rozik said that the 60 percent cut in production would cause a 65 percent drop in its sales, a loss of about US$5 billion a year. The fall in revenue would result in the government missing out on roughly $1.6 billion from taxes, royalties and dividends.

Rozik said that Freeport was petitioning the government to allow it to continue to export its copper concentrates, which the company said had been half-processed to add value.

He said that allowing Freeport to export its copper would not breach the law. “We are trying to convince the government that the impact of this will be tremendous, for the company, government and society,” he said.

Industry players are waiting to see whether the government will fully implement the 2009 Mining Law, which requires mining companies to process their ores domestically before export. The law, which is to go into force Jan. 12 next year, will consequently prohibit the export of unprocessed ore.

The government failed to persuade lawmakers last week to allow an exemption for miners that had shown a commitment to building smelters. The government is still looking for a way to sidestep the law, possibly by adjusting the minimum purity level for processed ores.

Mining companies have known since 2009 that they would have to build smelters to comply with the law, but so far few have.

Indonesia is a major supplier of several minerals needed for industries around the world. Consequently, any ban in ore export will tighten the world’s supply and drive up prices, which have been falling due to the weakened global economy.

In anticipation of the ban, large Japanese nickel producers are seeking to increase ore purchases from the Philippines and New Caledonia, Bloomberg reported on Thursday. Sumitomo Metal Mining Co. will secure 40 percent of its imports from the Philippines and 60 percent from New Caledonia. Pacific Metals Co. and Nippon Yakin Kogyo Co. will make similar moves.

“No doubt it’s going to be chaos in January if Indonesia stops ore shipments. Because of the concern, we’ve halted imports from Indonesia from this month through next March,” Nippon Yakin spokesman Yusuke Takahashi said.

Indonesia supplied 44 percent of Japan’s nickel ore imports of 4.7 million metric tons last year, trade data quoted by Bloomberg shows. Indonesia also provided more than half of China’s nickel ore imports of 65 million tons in 2012, along with 47 percent of the Philippines’.

Three-month futures on the London Metal Exchange rose 0.9 percent to $14,150 a ton at 2:03 p.m. in Tokyo after touching a one-month high of $14,180 yesterday. Prices may average $14,750 a ton in the first quarter and $15,250 in the final, Barclays Plc estimates.

Ore export ban will force Freeport to halt most operations | The Jakarta Post

We have given you 4 years preparation time....no more relaxing ...Freeport. The Gold is still inside the surface of Indonesia....we dont lose it.....

 

[Nike]

Batan may begin construction of nuclear power plant in 2015
Tue, December 17 2013 10:44 | 385 Views

Jakarta (ANTARA News) - The head of the National Nuclear Energy Agency (BATAN), Djarot S. Wisnusubroto, has said he expects the construction of a nuclear power plant (PLTN) to begin by 2015.

"It will be impossible for us to begin construction of a PLTN next year because of the legislative and presidential elections. Most likely, it will begin in 2015," Djarot said at the opening of a nanotechnology symposium in Serpong, Tangerang district, Banten, on Monday.

He said the results of a feasibility study of two locations for the construction of a PLTN in Bangka Belitung, namely South Bangka Belitung and West Bangka Belitung, indicated that both the sites are suitable for the construction of a nuclear power plant.

The result of the survey recommends the construction of about 10 plants with a total capacity of 10,000 MW in the two regions.

"We have not decided where the plants will be constructed. The government will decide that," he added.

He noted that more than 60 percent of the people surveyed supported the construction of a PLTN in the interest of generating the required power supply. Power outages are common in Indonesia.

"BATAN has been successful in developing nuclear energy. Over the past 30 years, we have developed nuclear reactors in Serpong and maintained them safely," the BATAN head said.

Djarot added that BATAN also planned to build a non-commercial PLTN reactor in the vicinity of the Technology and Science Research Center (Puspitek) in Serpong in 2015. That would prove nuclear energy generation is safe if managed appropriately.

Indonesian Research and Technology Minister Gusti Muhammad Hatta said late last month that the government is committed to its plan of building a nuclear power plant, noting that over 76 percent of the people surveyed support the development of a PLTN.

"We will build a nuclear reactor for generating power," Minister Gusti Muhammad Hatta had stated. However, the location of the nuclear power plant, which will have a capacity of approximately 30 MW, has not yet been decided.

According to a survey conducted by an independent organization for BATAN, 76.5 percent of Indonesians approve of nuclear development for scientific and technological purposes, such as energy development, medical care, animal husbandry and food security.

It was reported recently that studies are underway on the possibility of building two nuclear power plants in Bangka Belitung province, with a capacity of 10,600 MW. Nuclear power plants are expected to supply and meet 40 percent of the requirement for electricity in Sumatra, Java and Bali.

"The nuclear power plants are expected to become operational by 2025 or 2030 and, hopefully, they will meet 40 percent of the electricity needs of Sumatra, Java and Bali," said Governor of Bangka Belitung province Ekon Maulana Ali.

The government plans to build two nuclear power plants with a combined capacity of 10,600 MW. One plant will be built in the West Bangka district with a capacity of 10,000 MW, while the second one will be in Permis, South Bangka, with a capacity of 600 MW.

"The central government hopes that by 2015, the preparatory and planning stages will be completed. If the feasibility study results show that the locations are feasible for the construction of a nuclear power plant, then the government will proceed with the project," he added.

(T.A014/A/KR-BSR/B003)
Editor: Aditia Maruli

COPYRIGHT © 2013

Batan may begin construction of nuclear power plant in 2015 - ANTARA News

Well i hope this plans can be done

 

[Nike]

Diversified exports, reform
keys to economic growth

The Jakarta Post, Jakarta | Business | Wed, December 18 2013, 12:38 PM

The government should carry out structural reforms to boost economic growth, which is expected to drop next year to around 5.3 percent — from this year’s projection of 5.4 percent — due to reduced investment and weaker external demand, an expert has said.

The International Monetary Fund (IMF) senior resident representative for Indonesia, Benedict Bingham, told a press conference on Tuesday that his organization recommended the government control energy subsidies and diversify exports in a bid to increase both local and foreign investment.

“Anything that will help reduce the contribution of the oil deficit to the current-account deficit would be very helpful,” he said, adding that anything that the government could do on energy subsidies would be a good move.

Citing the IMF’s latest quarterly consultation report made available on Monday, Bingham said that the current-account deficit would remain above 3 percent of gross domestic product (GDP) this year and next year.

According to a report from Bank Indonesia (BI), the current-account deficit in the third quarter this year narrowed to US$8.4 billion or 3.8 percent of GDP, compared to $9.9 billion, or 4.4 percent of GDP, in the previous quarter.

Bingham said that the combination of slower domestic demand and economic growth, tighter monetary policy and a weaker rupiah was expected to affect the current account.

He added that the current monetary policy should be maintained, led by tax and subsidy reforms, and the exchange rate and bond yields should continue to reflect market conditions in order to facilitate an orderly adjustment to a challenging global environment.

He said that for longer-term growth, the solution lay in diversifying the country’s exports. He said that commodities, such as gas, coal and rubber, still amounted to more than 45 percent of the country’s total non-oil exports.

“A heavy concentration on commodity-based exports is not healthy for the current account and not healthy for growth prospects, either,” Bingham said, adding that commodity prices would continue to soften next year.

He said that Indonesia had huge untapped potential as it had around 45 percent of the labor force within the ASEAN-5 — Indonesia, Malaysia, Singapore, Thailand and the Philippines — but its non-commodity exports accounted for only 8 percent of a total exports in the region.

Bingham explained that diversifying exports would help the country reduce its unemployment rate as non-commodity businesses were more labor intensive.

One of the World Bank’s lead economists, Jim Brumby, said the government could not stimulate the economy simply by increasing productivity, but it had to look to logistics, creativity and infrastructure to boost productivity in both the domestic and international markets. (koi)

Diversified exports, reform keys to economic growth | The Jakarta Post

 

[Nike]

Revision of law on livestock must be accelerated: Minister
Thu, December 19 2013 11:06 | 318 Views

Jakarta (ANTARA News) - Trade Minister Gita Wirjawan hoped that the revision of Law No. 18/2009 on livestock and animal health would be accelerated to facilitate beef procurement through imports.

"I call on parties concerned to finish revising the law soon so that it will enable us to import beef from countries based on a zone system, not on a country basis," the minister said during a coordination meeting here on Wednesday.

He said that the revision of the law had reached the phase of deliberating the checklist problem by the ministry of agriculture. The process was expected to be completed at the end of January 2014 at the latest.

"If the checklist is already discussed the revision will probably be finished soon. It will give us freedom to import cattle," the minister said.

He said that if the revision was already completed, particularly on the clause that arranged the country-base system, Indonesia could import cattle or beef from any country like Brazil, which now adopted a zone-based import system.

"We can import cattle from any country as far as the country concerned has zones which are free from cattle diseases. Now we cannot import cattle from any country if it has a disease in one of its zones," Wirjawan said.

Agriculture Minister Suswono said meanwhile that the revision of the law was now being conducted together with the House of Representatives. It was expected to be finished at early sessions of the DPRs next sitting period.

"It is now being deliberated together with the DPR. We hope in the next sitting in January it will be finished. The government and the DPR have the same spirit," the minister said.

Suswono said that the revision of the law was very important for Indonesia to enable it to import cattle from alternative countries apart from Australia. But the interest of breeders at home is also taken into account in revising the law, he added.

"We should not be tied to one country only. We hope other alternatives, yet local breeders should neither be ignored and for that we should allow a price level which will encourage them to run cattle farming," the minister said.(*)
Editor: Heru

COPYRIGHT © 2013

Revision of law on livestock must be accelerated: Minister - ANTARA News

 

[Daniel808]

Indonesian companies secure Chinese deals worth $33 billion on Xi visit.
Oct 3 (Reuters) - Indonesian companies secured $32.8 billion of financing and investment from Chinese firms on Thursday during a state visit by President Xi Jinping, an Indonesian government official said.
Xi, in his first visit as president to southeast Asia's biggest country, became the first foreign leader to address Indonesian lawmakers in parliament.
He said China hoped trade with the 10-member Association of Southeast Asian Nations (ASEAN) would reach $1 trillion by 2020, from $320 billion in 2012, according to ASEAN's website.
Negotiated by companies including Indonesian state-owned firms and privately held Sinar Mas Group, deals included a $1.8 billion loan to PT OKI Pulp & Paper Mills - an affiliate of Sinar Mas - to build a mill in Sumatra, and funding for five Boeing 777-300 ER planes for PT Garuda Indonesia.
Several Chinese companies also pledged to invest in Indonesia, including Hangzou Jinjian Group Co. Ltd, which plans to spend $600 million on a bauxite-processing complex there, according to the government official.

Indonesian companies secure Chinese deals worth $33 bln on Xi visit| Reuters










Waning rupiah not triggered
by Fed tapering: BI



Bank Indonesia (BI) Governor Agus Martowardojo claimed that the weakening of rupiah, which hit Rp 12,191 per US dollar on Thursday, the lowest level for five years, was not triggered by the US Federal Reserve's statement that it would begin tapering massive US stimulus in January.

“Tapering was anticipated […] it is only US$ 10 billion. The interest rate [in the US] has also been maintained at a relatively low level. So, basically, we consider tapering positive,” Agus told reporters at the State Palace on Thursday.

“The rupiah slightly weakened because purchases of foreign currencies usually increase around the year end. After we pass this period, [the rupiah] will be normal again,” he added.

Agus said that the response from the global market was good. “But still, we have to keep up our monetary and fiscal programs, as well as our real sectors to make our domestic situation even better,” he said.

Previously, BI spokesperson Difi A. Johansyah said the Fed’s tapering confirmation was positive in providing certainty.

“We can see that the global financial market’s reaction to the tapering policy is relatively stable because they are already ‘priced-in’. This means the looming uncertainty that shadowed the global economy has gone,” he said.

Waning rupiah not triggered by Fed tapering: BI | The Jakarta Post

 

[Nike]

Worked to Death? A Young Copywriter’s Passing Inspires Reflection Online

By Jakarta Globe on 1:39 pm December 19, 2013.
Category Featured, News
Tags: accidental death, Indonesia advertising

The death of a young advertising copywriter has touched a nerve in Indonesia where the 24-year-old’s passing has become a cautionary tale about the exhausting realities of holding down a white-collar career.
http://www.thejakartaglobe.com/tag/indonesia-advertising/

Mita Diran, a copywriter at Young & Rubicam Indonesia, was deep into another marathon shift on Dec. 14 when she aired her frustration over the unrealistic demands of her job on Twitter. It was a common theme of Mita’s writing. Her posts on Facebook, Twitter and Tumblr often lamented the impact the #AgencyLife had on her real life. Her work week had ballooned beyond weekdays, she wrote. Her overtime hours routinely bled into the next day.

“30 hours of working and still going strooong,” she tweeted at 5:47 p.m. on Dec. 14.

Hours later, Mita collapsed at a pizzeria near Senopati, South Jakarta, and fell into a coma.

She was dead the next day.

It’s unclear what caused Mita’s death. Her mother, in an interview with VivaLife, said her daughter died of a ruptured blood vessel in her brain. Doctors at South Jakarta’s Rumah Sakit Pusat Pertamina (RSPP) told Mita’s mother she had elevated sugar levels.

Her father, an advertising executive, said that Mita had worked for three straight days before her death, according to a screengrab shared on the Internet. Her coworker placed the blame on too many bottles of Kratingdaeng — the original uncarbonated version of Red Bull sold in small glass bottles throughout Southeast Asia. It is unknown if her death has any connection to being overworked.

Several hospital officials declined to comment on Mita’s death. Her father’s phone was off for two days when the Jakarta Globe attempted to contact him. He did not return text messages sent by this newspaper’s staff.

The Internet, though, was quick to reach a conclusion: Mita was worked to death. The story of her death has been published worldwide, from the Malaysian blog VenusBuzz to wide-reaching sites like Gawker and Buzzfeed. The consensus online was that Mita had died of exhaustion after excessive amounts of overtime.

A spokeswoman for Young & Rubicam Indonesia said the company was looking into claims that Mita had worked for three straight days. The company complies with Indonesian labor law, which prohibits working more than three hours of overtime per day, spokeswoman Sie Zin Lie told the Jakarta Globe.

“Up until now, we’re still trying to find out what really happened internally,” she said. “We are deeply affected by the loss of Mita and we pray for the family to have the strength to be able to get through this difficult time.

“Our priority at the moment is to support and pray for Mita’s family. All the employees of Y&R are in mourning at the time.”

The company employs 6,500 people in 90 countries with offices everywhere from New York to Yangon, according to its website. Y&R Indonesia’s clients include LG, Sony and the World Wildlife Fund. The firm released a statement on Facebook expressing its condolences to Mita’s friends and family. The company closed its doors on Dec. 16 as employees attended the woman’s funeral at Jakarta’s Jeruk Purut cemetery.

“It is with a heavy heart and deep sadness that we have to inform you we have lost our friend, sister, and work colleague, Mita Diran, earlier this evening,” the statement read. “Mita was a talented copywriter with a gentle smile who will always live on in our hearts.”

Online Mita comes across as an eager, but exhausted copywriter; a woman who was simultaneously enamored by the advertising industry and exasperated with its demanding workload. On Oct. 26 Mita tweeted “So it’s 2AM, Friday night and I’m at the office, nibbling on junk food with 9 other creatives. I’m actually okay with this. #AgencyLife“

But four days later she wrote “Lately, all my tweets sound tired” at 11:22 p.m. Another user retweeted the post shortly after Mita’s death, adding “May You Rest in Peace Dear.” It was a day after Mita’s death and the start of a groundswell of support. Her final post was retweeted more than 1,800 times as news of her death spread online.

We live in an age where our lives online remain long after our death. We spend our days relaying our thoughts 140 characters at a time, venting on Facebook and sharing sepia-toned Instagram memories. It continues on and on until one day when it just stops. What is left behind is a crystallized version of who we once were. For most, Mita was a complete stranger in a faraway land. But her life, at least the one discovered by those who followed the breadcrumbs left behind online, has struck a chord worldwide.

Feelings of exhaustion are common in the advertising industry, especially among those in the creative department, explained Christine Putri, the head of the creative division at the Jakarta-based advertising company M-Solving.

“It’s kind of tricky because creative people work depending on their mood,” Christine said. “You can’t force them to work 9-to-5. They might not be able to work during normal working hours, as you can’t force the idea to come between those hours.

“That’s why, when people start heading home, creative people normally start working, usually up to midnight or 2 a.m. in the morning.”

The company, Y&R Indonesia, is not at fault, Christine said
Mita Diran (Photo via Facebook)

“You can’t really blame on the company,” she said. “Working hours are something negotiable, to be adjusted with the way you work. We need to know how to keep awake until late at night in a healthy way. You should not consume energy drinks which might trigger heart problems. The way you do it with vitamins and basically just living healthily.”

Indonesian lawmaker Rieke Diah Pitaloka, who sits on the House of Representatives commission on labor issues, hoped Mita’s death would serve as a reminder to government officials tasked with policing for violations of labor law. Controversial issues like contract laborers and minimum wage hikes routinely pull thousands of workers to the streets of the capital in large labor protests. But the complaints of white collar workers, the men and women employed in the private sectors, often goes unheard.

“This incident should have opened the eyes of state officials,” Rieke said.

“[The officials] are paid with people’s money so that they will take preventive and repressive actions toward the K3 regulation violators,” she said, referring to the nation’s labor regulations.

At least one industry insider has called on Asia’s advertising firms to view cases like Mita’s death as a reason for reform. Steve Elrick, the former Asia Pacific executive creative director at BBH, wrote an editorial on the marketing and advertising blog Mumbrella titled “Come on, adland. How are you going to respond to this tragedy?” criticizing what he called “extreme” work conditions.

“This really isn’t about working long hours and a work life balance – those are conversations being held around the world in just about every business. This is about extremes; extremes that often seem to be becoming norms,” Elrick wrote. “If it was many other industries it would be classified as sweat shop labour and defined as illegal - but of course it’s advertising, a ‘cushy,’ sometimes professional, and often seemingly glamorous office job.

“The positive spin being that it’s a career choice where people willingly clock up crazy hours with a hunger and a passion to prove themselves and get ahead. And often it’s just that.”
Worked to Death? A Young Copywriter's Passing Inspires Reflection Online - The Jakarta Globe

 

[Nike]

Telkom Plans to Set Up Operations in Macau, Taiwan in 1st Quarter of 2014
By Francezka Nangoy on 2:31 pm December 20, 2013.
Category Business, Corporate News
Tags: indonesia, Internet, mobile phone, telcom, Telekomunikasi Indonesia


Arief Yahya, Telkom president director, plans an overseas expansion next year that includes Macau and Taiwan. (Photo courtesy of Telkom)

[Updated at 2:45 p.m. on Dec. 20, 2013]

Telekomunikasi Indonesia plans to provide services in Macau and Taiwan early next year, following the establishment of a subsidiary in the United States, as it aims to be the biggest telecommunication company based in Southeast Asia.

Arief Yahya, president director of the largest telecommunication company in Indonesia known as Telkom, told reporters in Jakarta on Thursday that it aims to enter Macau and Taiwan in the first quarter. Macau and Taiwan would be the eighth and ninth countries for Telkom in which it does business.

He did not offer much detail on the entrance to these countries.

Earlier this year, he said the prospects of Telkom doing business in Macau and Taiwan would be in the wholesale traffic business, which means handing international telecommunications to Indonesia and vice versa.

The company is aiming to enter 10 overseas markets by 2015 and become the largest telecommunication company in Southeast Asia. It is currently the second largest after Singapore Telecommunication.

Telkom recently set up a subsidiary in the US, which is its seventh operation outside Indonesia, Arief said.

He said the company has been operating in the US for a while, but this is the first time Telkom has set up a company in the US.

The subsidiary is called Telkom USA and was established on Dec. 11.

“Traffic to the US is very big, especially Internet traffic. You have to realize that a lot of the websites accessed from Indonesia are there,” Arief said.

For its expansion plan, he said Telkom is not spending a lot of investment since the company is renting a network from an existing operator in the US. However, he also said the company already has four network nodes installed in the US for its existing wholesale business.

He said the pay-as-you-go scheme — or having a pre-paid account — for its expansion in the US is “the safest entry strategy” for Telkom.

Meanwhile, Telkom is also aiming to double its customer base in East Timor. He had said earlier this year that the number of its cellular subscribers there may reach 100,000 subscribers and it aims for another 100,000 in 2014.

Its competitor, Timor Telecom, which is currently that nation’s market leader, claims to have 600,000 cellular subscribers.

In January this year, Telkom entered East Timor with $50 million in investment to operate GSM and 3G services. The company’s network coverage has reached 95 percent of East Timor.

Telkom’s other overseas expansion also covers a business in Myanmar where it secured a license to handle international networks to and from Myanmar.

Telkom Plans to Set Up Operations in Macau, Taiwan in 1st Quarter of 2014 - The Jakarta Globe

With Santa Costume, Muslim Workers Don Cloak of Doubt and Guilt
Marcel Thee meets Muslims struggling to reconcile their work commitments with their personal beliefs during Christmas

By Marcel Thee on 10:27 am December 20, 2013.
Category Featured, Features
Tags: Christmas, Indonesian Muslims

Shoppers visit a mall decked-out in Christmas decorations on Dec 16, 2013. (EPA Photo/Bagus Indahono)

With porcelain skin, the height of a model and sculpture-like features, Diana is a very eye-catching mobile phone saleswoman. This December, the red Santa hats that she and her colleagues don at their post in front of an elaborately decorated Christmas tree make Diana and her shop just that much more noticeable among the mid-day mall crowd. Nothing about this is out of the ordinary. It is just another example of a corporation getting the best out of the season. However, Christmas — its pop culture connections notwithstanding — is inherently a Christian holiday and Diana is Muslim.

This happens every year, of course. Malls get decked with majestic plastic trees, fake puffy cotton snow, toddler-sized candy canes and North Pole fashion for shopkeepers. It’s all a cheery habit that happens with many other religious holidays as well. However, for some the Christmas aesthetic they are expected to take part in goes over and above the uncomfortable agreement their workplace demands.

“If my parents knew I was wearing this,” Diana says pointing at her jolly red hat, “they would be extremely upset,” says the 23-year-old, who asked that her real name not be used for the purposes of this story. She also asked that the mall where she works not be divulged.

Though her parents are “understanding” Muslims, Diana says she considers donning a “Christian-related” hat creates an emotional conflict in her that she can only justify because she needs to make some money.

“This is easy money that I make [as sales promotion girl, or SPG]. I don’t mind wearing whatever kind of dresses my employees ask,” she says, no doubt referring to the revealing mini dresses that saleswomen are often asked to wear.

“But wearing something that goes against my belief system is very uncomfortable,” Diana said.

Like many of her peers, Diana’s solution is to pray that no one she knows will be traversing whatever mall she is working at.

Likewise, Lisa (not her real name), a shopkeeper at a clothing store at a mall in Serpong, Tangerang, says jokingly that she is always prepared to take off her Santa hat at the sight of “any old men in a peci [skull cap] because they look like [her] dad.”

Lisa, who is currently holding her first job, says that wearing a Santa hat is “not too bad,” but she fears that her company may ask her to wear something more elaborately Christmas-y.

“Maybe next they’ll ask us to wear a [full] Christmas and Santa costume too; all red,” she says, though she admits that this fear has as much to do with not wanting to look foolish as not wanting to violate her religious beliefs.

“It’s fine,” says Hasan, an attendant at a surf-related clothing store at the Lippo Supermall who only agreed to give out his first name.

Unlike Diana, 20-year-old Hasan has no qualms about being a Muslim wearing a Santa hat and spending eight hours a day listening to a Christmas music playlist throughout the month of December.

“It’s just a funny character and story,” he says of Santa and the folklore that surrounds jolly old St. Nick. Hasan admits that he knows little about how Santa Claus is tied to Christmas.

“I don’t know what Santa is for Christians,” he says. “Is he some kind of prophet?”

Hasan says that everything goes back to how his “soul” is comfortable with his own beliefs. He considers it odd that some non-Christians feel uncomfortable with what he considers the simple task of just wearing a costume. “If [the employers] ask us to perform a religious ritual, that might be a different issue, but this is OK,” Hasan rationalizes.

Diana and Lisa feel differently from Hasan but they seem to have come to terms with donning their seasonal getup without much fanfare. By Diana’s third day on this particular gig, she admits to barely realizing that she was wearing Christmas wear. Quite a feat considering she adheres to the belief that Muslims should not be involved in anything related to Christmas.

“I have many Christian friends, but no, I don’t wish them a merry Christmas. It is against my [religious and familial] teachings,” she says. Diana added that the Christmas ornaments at her work space made her feel slightly uncomfortable, “like I’m celebrating it.”

Lisa has experienced the same kind of regularity and acceptance, saying that her working days go without much fanfare, as usual. Asked whether there have been any uncomfortable moments or experiences that came from “dressing up Christian,” she said no.

“All my colleagues [the majority of whom are Muslim] wear the same thing, which helps make me feel comfortable. Most of them have undergone the same emotional conflict before and they let me know that what I’m doing is OK and not a sin,” she said.

For his part, Hasan says that he has experienced mild teasing from his close friends whenever they pass by his work place, but it has always been in good spirit.

For Randy Apriza Akbar, the manager of a large-scale event and wedding photography team whose job requires frequent photo gigs at churches during Christian ceremonies, there is no dilemma.

The majority of the people on his various photo crews are Muslim, and none have balked at the idea of undertaking a Christian-related job, including the few corporate Christmas parties they’ll be documenting nearing the 25th.

“What matters is that we are making money in a halal way,” the 26-year-old Muslim says.

With Santa Costume, Muslim Workers Don Cloak of Doubt and Guilt - The Jakarta Globe

Indonesia Ore Export Ban Could Boost Shipping Costs
By Keith Wallis on 1:17 pm December 20, 2013.
Category Business, Commodities, Featured
Tags: Indonesia mining, Indonesia ore ban

A barge on the river of Mahakam to load coal from the mining area in Samarinda, East Kalimantan, is shown in this photo taken on Nov. 10, 2013. (AFP Photo/Bay Ismoyo)

Singapore. Indonesia’s plan to ban exports of unrefined nickel and other minerals could drive up shipping costs as Chinese importers seek new supplies from more distant sources such as Australia and New Caledonia.

China typically buys most of its nickel ore from the Southeast nation, which plans to force mining companies from January to process raw metals before shipping them overseas as part of a drive to boost the value of exports.

“If there is a shift to other sources that have a greater ton-mile impact it will be very positive for the market,” said Khalid Hashim, managing director of Precious Shipping, one of Thailand’s largest dry cargo owners.

Charter rates for ships carrying dry bulk cargoes such as nickel ore and bauxite to China from Indonesia have already soared more than 50 per cent from late August to early December after Beijing boosted imports ahead of the planned ban, shipping data showed.

The French South Pacific territory of New Caledonia, Australia, Russia and the Philippines could boost nickel ore exports to fill the gap left by the Indonesian ban, said Jayendu Krishna, senior manager at Drewry Maritime Services.

Greater Chinese imports from Australia, New Caledonia and Russia would benefit smaller dry bulk vessels such as handysize and supramax ships of between 28,000-60,000 deadweight tonnes (dwt). But the Philippines is closer to China than Indonesia.

Will it stick?

Chinese imports of nickel ore, used to make stainless steel, in the first 10 months of 2013 rose 18 percent from the year before to 57 million tonnes, with around 31.3 million from Indonesia and 25.3 million tonnes from the Philippines, China customs figures showed.

“Indonesia is the No.1 exporting nation with about 55 million tonnes of exports expected for 2013,” said Peter Sand, chief shipping analyst at shipping trade body BIMCO. That compares with 48.5 million tonnes last year, according to data from GTIS and consultancy Drewry Maritime Research.

But some market participants question whether the ban by Indonesia, the world’s top exporter of nickel ore, will last.

Major miner Freeport McMoRan Copper & Gold has warned that the ban could cost Southeast Asia’s biggest economy $1.6 billion in lost revenue next year.

“This is not the first time Indonesia has threatened [a ban],” said Ian Claxton, managing director of Thai dry bulk owner Thoresen & Co (Bangkok). “[But] in the event the ban should stick then alternative sources need to be found. This will increase tonne mile demand, not a bad thing for supramaxes.”

Supramax charter rates between Indonesia and China topped $10,400 per day on Dec. 6 compared with a daily average of $6,171 in 2013, according to data from Clarkson Research Services, a unit of the British ship broking house.

A nickel ore export ban would make shipping safer as Indonesian ore is especially prone to liquefaction as it is loaded in remote areas where facilities to check moisture content are not available, said Hashim at Precious Shipping.

Some 81 seamen were killed in five incidents between October 2010 and February 2012 where ships capsized and sank after their nickel ore cargoes liquefied, said shipping insurer the American P&I Club.

Reuters

Indonesia Ore Export Ban Could Boost Shipping Costs - The Jakarta Globe

 

[Nike]

Indopura to Start Building $500m Alumina Plant
By Suara Pembaruan on 11:42 pm December 19, 2013.
Category Business, Corporate News
Tags: Indonesia ore ban, Indopura, Raw mineral exports
Indopura Resources, a joint venture between companies from Indonesia, Singapore, and China, started the construction of its $500 million chemical grade alumina plant in Kubu, West Kalimantan, in an attempt to tap rich bauxite resources in the region.

Indonesia is seeking to reap more added value from its rich mineral resources, with a planned mineral ore export ban starting Jan. 14.

The government issued a ministerial decree banning exports of some raw minerals — including bauxite — that would require the country’s miners to process their mineral ore before exporting.

“We are committed to investing in bauxite refinery in West Kalimantan, which has bauxite deposits of about 4.3 billion tons,” M. Arief Winata, Indopura’s managing director told reporters in a ground-breaking ceremony on Wednesday.

Arief said the plant would sit on 224 hectares of land and be online by the end of 2017: “We will process the bauxite so that it can have an added value to Indonesia’s economy and provide 1,500 jobs.”

He added that the plant would be able to produce 1.2 million metric tons of CGA per year.

CGA is used in the production of refractories, abrasives, building materials, integrated circuit packaging and materials for liquid crystal displays.

The ore bauxite for Indopura’s plant will be supplied from a 27,000-hectare mining area owned by Laman Mining, in Ketapang, West Kalimantan.

Arief said the company had designed and planned the plant’s construction for about a year, including conducting a feasibility study. For engineering, procurement, and construction of the plant, Indopura is working with Northern Heavy Industries Group, China State Construction Engineering Corporation, Zhongtai Construction Group and the Northeastern University Engineering and Research Institute.

Aneka Tambang, Indopura’s joint state mining company, is completing its first CGA plant in Taya, West Kalimantan, and will start production in April next year.

Antam has been building the plant since June 2011 and it is intended to process the company’s bauxite reserves to produce up to 295,000 tons of CGA per year.

The Indonesian government announced the policy to tighten its grip exports of ore minerals ostensibly to increase the value of its natural resources by processing them locally.

Mining accounted for only 12 percent of the country’s gross domestic product in 2011.

Indopura to Start Building $500m Alumina Plant - The Jakarta Globe

 

[Nike]

Jakarta to Add Rp 30b in Roads to Minimize Accidents at Railway Crossings
By Lenny Tristia Tambun on 11:24 am December 18, 2013.
Category Jakarta, News
Tags: jakarta infrastructure, Jakarta roads
The Jakarta administration has announced plans to build five overpasses and underpasses at railway crossings to minimize train accidents within the capital.

“Overpasses will be built at the railway crossings in Bintaro and Permata Hijau, while underpasses will be built at Ulujami and Madiun,” Wahyu Wijayanto, the head of programs and funding at the Jakarta Development Planning Board (Bappeda), told the Jakarta Globe on Tuesday.

The construction of the overpasses and underpasses will be handled by the city’s public works office, he said. The project is expected to be finished within 10 months and will cost Rp 30 billion ($246,000).

“The overpass construction in Bintaro will be prioritized and will start in the beginning of 2014,” Wahyu said, adding that the Bintaro area was prioritized because heavy traffic congestion along railroad crossings in the area made it an accident-prone area.

Eight people were killed and around 90 were injured on Dec. 9 after a train from Serpong to Tanah Abang struck a Pertamina gasoline tanker at around 11:20 a.m. at the Bintaro railroad crossing.

Jakarta Deputy Governor Basuki Tjahaja Purnama said that during the construction, a section of Jalan Raya Bintaro would be closed and traffic there would be rerouted.

“We have made a study to determine whether the road will be closed only to private cars, or motorcycles too. We realize the roadblock will upset people because the traffic congestion will get even worse,” Basuki said.

Nevertheless, he said, the city government decided to go ahead with the plan to prevent fatal accidents in the future.

Gatra magazine reported earlier this month that there were 549 railway crossings in Jakarta — 197 were built illegally by local residents; 186 were manned by security officers; and 123 were legal but not manned.

Azas Tigor Nainggolan, chairman of the independent Jakarta Citizens Forum (Fakta), who also serves as chairman of the city-funded Jakarta Transportation Council, said that most train accidents in Jakarta were the fault of careless motorists and poor railway maintenance and weak regulations imposed by state-owned railway operator Kereta Api Indonesia.

The results of the Bintaro crash investigation are still unknown, but Azas speculated that one problem may be the increasingly standard use of railroad crossing sirens to control traffic regardless of whether trains are passing or not.

Previously the Jakarta administration announced that it would consider scrapping two of its three overpasses planned for 2014 and six of its seven underpass projects, because construction plans clashed with the intended course of an elevated railway funded by the central government, also set to kick off next year.

Manggas Rudy Siahaan, head of the Jakarta Public Works Agency, said that the city’s plans to build overpasses in Mangga Dua and Gunung Sahari would have to be reconsidered.

Work on the long-delayed Kampung Melayu-Tanah Abang elevated road would continue, he said.

Six underpasses — at Jalan Kartini, Jalan Industri, Jalan Cendrawasih and Jalan Garuda; and between Jalan Guntur and Jalan Cik Di Tiro; and Jalan Halimun to Jalan Madiun — have come under review.

Manggas said that the underpasses, overpasses and elevated roads were intended to ease traffic bottlenecks at key nodes throughout the city.

The Rp 9 trillion rail project will have two 10-kilometer sections: one in the eastern part of the city and another in the west. Manggas did not say how the conflict had arisen or how it might have been avoided.

These rail projects are not related to the planned monorail project and mass rapid transit rail line that are also under construction.

The monorail will run through downtown Jakarta, while the MRT will run on a south-to-north line through the city’s central business district.

Jakarta to Add Rp 30b in Roads to Minimize Accidents at Railway Crossings - The Jakarta Globe

 

[Nike]

Mandiri Sekuritas eyes
Rp 12t
Tassia Sipahutar, The Jakarta Post | Business | Fri, December 20 2013, 12:51 PM

Securities firm PT Mandiri Sekuritas, a publicly listed Bank Mandiri unit, is aiming for Rp 12 trillion (US$984.33 million) in total underwriting business next year.

According to Mandiri Sekuritas managing director Iman Rachman, the company hopes to underwrite 10 initial public offerings (IPOs) and 20 bond issuances.

He said the company had so far received IPO mandates from three firms operating in the logistics,
financial and infrastructure sectors.

“The total value of the three planned IPOs ranges from Rp 3 trillion to Rp 4 trillion. Hopefully they will be realized in the first quarter of 2014,” he told a press conference held on Thursday.

Two of the three firms had actually planned to go public this year, but were forced to hold back due to volatility in the stock market, he added.

Mandiri Sekuritas has also secured mandates from eight firms — in finance, consumer goods, retail and transportation — that wish to sell debt papers in the first half of next year. The total amount of funds targeted from the bond issuances stands at between Rp 8 trillion and Rp 9 trillion.

The company’s 2014 business-value target is only slightly higher than what it achieved this year. Data from Mandiri Sekuritas shows that it managed to underwrite five IPOs, 22 bond issuances and three rights issues in 2013, with a total business value of Rp 11.2 trillion.

Iman said the company was also looking to assist Indonesian firms issuing ringgit-denominated bonds in 2014 as it had established a partnership with Malaysia’s RHB Investment Bank Berhad in the middle of this year.

“We would like to bring two to three Indonesian firms to the Malaysian bond market next year, but we are still discussing it with RHB because the requirements that apply there are different from what we have here,” he said.

In the domestic equity-trading market, Mandiri Sekuritas hopes to increase its share to 4 percent next year, from the current 3.8 percent.

In an effort to reach the target, the firm would expand its retail customer base to 45,000 clients and open new branch offices, said Mandiri Sekuritas president director Abiprayadi Riyanto.

“Some of the new clients will hopefully come from Bank Mandiri’s existing customers,” he said.

Mandiri Sekuritas managing director Laksono W. Widodo said the contribution from the retail segment was expected to exceed 40 percent of its equity-trading business in 2014.

According to the latest data, Mandiri Sekuritas recorded Rp 108.2 trillion from equity trading throughout this year, up from Rp 62.2 trillion in 2012. All of its segments reported increases, but it was the retail segment that booked the highest rise, from 20 percent of equity trading last year to 36 percent this year.

Mandiri Sekuritas estimates that equity trading among its retail clients will be even more robust, with the Indonesia Stock Exchange (IDX) reducing the share lot size from the current 500 shares each to 100 shares on Jan. 6, 2014.

Mandiri Sekuritas eyes Rp 12t | The Jakarta Post

RI universities cannot
compete internationally

Fuad Rakhman, Yogyakarta | Opinion | Sat, December 07 2013, 1:08 PM

Universities in Indonesia are having difficulties matching the world’s prominent universities and even Asia’s best.

None of our universities are on the list of the 100 best Asian universities in 2013, according to Times Higher Education, while Singapore, Thailand and Malaysia have institutions on the list. Despite the abundant resources spent by the government on improving the quality of education, it seems our “best universities” cannot even be the best (or even close to the best) in ASEAN, let alone in Asia or globally. Here are some problems we face in improving our higher education system.

First, the best people do not become lecturers. All parents, if they had the choice, would pick the best people to teach their children. It is widely accepted that the quality of education systems cannot exceed the quality of teachers.

However, the best students have no desire to become lecturers. They usually go to large multinational companies, which compete aggressively to recruit our best graduates. Some companies provide scholarships to top students, with the agreement that the students must work for the companies following graduation.

On the contrary, our universities do not usually have clear recruitment strategies and procedures. University officials are mostly very passive and not very creative when it comes to recruiting new lecturers. Faculty staff do not bother to attract talented candidates or seriously look at selecting the best students who could become excellent teachers.

Second, there is no financial security for lecturers. The main salary of a lecturer is insignificant compared to those with similar education levels who work in other industries. Low salaries make university lecturer positions unattractive to the country’s best and brightest.

There are many great Indonesian PhD holders who have opted to teach in universities abroad, earning much more than they would have done working in Indonesian universities. Unfortunately, we cannot expect them to return to Indonesia to strengthen our educational systems for many reasons, one being the amount of salary involved.

Further, faculty members resort to other sources of income to survive. The side jobs include teaching in other universities, becoming consultants, establishing a business and public speaking. These side jobs have significantly distracted our lecturers from their commitment to the quality of higher education.

As a result, being a lecturer is a full-time job only on paper. Some are even willing to cancel classes for these side jobs, especially if the jobs provide significant monetary incentives. Further, many offices of lecturers are vacant most of the time. This would never happen in good universities with established governing systems.

Therefore, if the Education and Culture Ministry has difficulties finding ways to absorb the 20 percent budget from the government, it might start thinking about increasing the salaries of university lecturers.

Third, reward and punishment systems are ineffective. University lecturers are perceived as the most valuable assets to the academic institutions. In fact, some argue the lecturers are the university itself, as most decisions concerning the institution are made by lecturers. However, these so called “assets” can be classified into three groups: Operating assets, non-operating assets and troubled assets.

Many faculty members are great teachers, productive researchers and effective administrators (operating assets), while some of them are ineffective in their main assignments (non-operating assets), and there are usually a few who create chronic problems for the institution and who are persistent in their bad behavior (troubled assets).

Ideally, the operating assets are rewarded, the non-operating assets are warned or further trained and the troubled assets are “liquidated”. Unfortunately, what sometimes happens is that the institution punishes the high performing (usually young) lecturers by giving them more assignments (with no financial incentives), while the university does not have the authority to warn misbehaving, or fire troubled lecturers.

Fourth, there is too much teaching and not enough research. To promote research, world-class universities usually limit teaching loads to three or fewer courses per semester for their faculty. Some lecturers hired to conduct research will teach even fewer classes.

College deans are pure administrators and they do not usually teach, while department heads might teach one class per semester. Their income is not dependent upon how many classes they teach as they receive a fixed salary, and the teaching load is agreed during the hiring process.

Yet in Indonesia, many lecturers are severely overloaded as they might teach more than 10 classes per semester — with financial incentives for teaching more classes. Even deans, department heads and other officials sometimes teach many classes. Thus, it is difficult for a lecturer to control his teaching quality and to find time for research.

What usually happens is that our lecturers will co-author studies with their students and shift the research workload to the students. In good universities, most lecturers co-author with other lecturers. This difference in research partnerships definitely affects the quality of research.

Even lecturers in a so-called “teaching university” abroad do not usually teach more than five classes per semester.

A university in Indonesia wanting to declare itself a “research university” should limit the teaching load of its faculty members to provide space for research. We need to establish a compensation system to reduce the teaching load without lowering the income, and a system that fosters research.

The writer is a lecturer at the School of Economics and Business, Gadjah Mada University (UGM) in Yogyakarta. He has lectured in the US and the Middle East.

Paper Edition | Page: 7

RI universities cannot compete internationally | The Jakarta Post

 

[Daniel808]

Indonesian economy to grow
6% in 2014



Vice President Boediono has said he is optimistic that with better control of food-price inflation Indonesia’s economy will grow by between 5 percent and 6 percent in 2014.

“I predict that our economic growth will improve next year although it is not likely to be over 6 percent as occurred in 2011. However, this cannot be avoided if we want a balance between stability and economic growth,” said Boediono.

He was speaking to journalists and foreign diplomats at the Jakarta Foreign Correspondence Club in Jakarta on Monday, as quoted by Antara news agency.

Boediono added that Indonesia’s inflation rate until the end of 2013 was expected to reach 8 percent and this figure was far above the country’s average inflation rate during the last several years, which was between 4 and 5 percent annually.

“There are several factors that have triggered such a high inflation rate, including the fuel price hikes and increases in non-rice food commodity prices,” he said.

Boediono was also confident that investment and consumer spending in 2014 would remain high. Activities centering on the 2014 general elections would likely contribute positively to growth as well, he said.

Boediono added that oil imports would probably reduce due to the government’s plan to shift from petroleum diesel to palm-oil based biofuels.

On economic growth and stability, the Vice President said Indonesia was still noted globally as a high-growth country. After enjoying stable economic growth of 6 percent annually, Indonesia’s economic growth fell to 4 percent when the economic crisis hit in 2008. The country later restored pre-2008 rates of annual GDP growth of 6 percent, exceeding growth in other countries with the exception of China.

Boediono acknowledged that Indonesia had been suffering a current-account deficit since the fourth quarter of 2011.

“This is caused by decreased export values due to declines in commodity prices in the international market. Moreover, imports remain high particularly of subsidized fuel for domestic needs,” said Boediono.

“In 2012, Indonesia’s growth was also still supported by investment and consumer spending that was relatively high despite weaker exports,” he went on.

Declining export values in 2013 were one of major causes of Indonesia’s weaker economic growth. Nevertheless, Boediono said, there were many positive factors that could raise enthusiasm in 2014, so that he was optimistic 6 percent growth was achievable for Indonesia in the midst of the ongoing global economic slow down. (ebf)

RI’s economy to grow 6% in 2014: VP | The Jakarta Post

Nice Number lol

Indonesia pushes pro-investment reform




Slower growth in Indonesia may provide an impetus to realise a range of reforms that the government is planning, changes that could open several important and attractive sectors to greater foreign investment.

On November 6, the Investment Coordinating Board (Badan Koordinasi Penanaman Modal, BKPM) announced plans to allow foreign investment in airports and ports, and to ease restrictions in the telecommunications and pharmaceutical sectors. The announcement came just hours after official figures showed GDP growth had slowed for a fifth consecutive quarter, albeit to 5.62% - still impressive by international standards.

The BKPM chairman, Mahendra Siregar, told reporters the government would allow foreign companies to hold stakes of up to 100% in airports, airport services and ports, while permitting 49% ownership of freight terminals. Currently, state-owned companies PT Angkasa Pura and PT Pelindo own and operate airports and seaports, respectively. With Indonesia planning to open 24 new airports by 2015, private capital and expertise in management could help support expansion. Local press reports suggest that restrictions on foreign investment in financial institutions, tourism, healthcare and advertising could also be loosened.

However, Sofjan Wanandi, chairman of the Indonesian Employers’ Association, told the local press restrictions could be imposed on the retail and logistics sectors, in which foreign ownership of 100% is allowed.

Further details of potential liberalisation have yet to be released, but on December 5, Mahendra told the press President Susilo Bambang Yudhoyono had promised his advisers the reforms would be finalised as soon as possible.



Rules last modified in 2010


News on the reforms is long-awaited. The BKPM was due to revise the so-called negative investments list (Daftar Negatif Investasi, DNI), which sets limits on foreign ownership of assets in various sectors, this year. The list, which is issued by presidential decree, was last modified in 2010, when the BKPM was headed by Gita Wirjawan, who is now trade minister.

The 2010 revisions – which were announced after some delay – eased restrictions on investment in sectors including education, construction, health care, postal services and telecommunications, while tightening other requirements.



Reform driven by slowing growth


The renewed sense of urgency about DNI revisions may be partly associated with the upcoming parliamentary and presidential elections, but most media reports suggest that it is mainly driven by concerns over slowing growth. While GDP expansion of more than 5% may be high by international standards, this remains a relatively poor country with a large and growing population, and the government wishes to continue delivering higher incomes and jobs.

One of the reasons for sluggish growth is lower investment. In the third quarter of this year, realised investments grew 22.9% year-on-year, according to Indonesia Investments, a Dutch-run organisation. This may seem a high figure, but it is low compared to recent performances – and realised investments grew just 0.7% quarter-on-quarter in Q3 2013, a significant slowdown.

A number of factors are acting as a drag on previously buoyant growth, including inflation, weak external demand, higher interest rates and a depreciation of the rupiah, Indonesia’s currency. All are affecting investor confidence. This year the country saw an outflow from its financial markets of $1.4bn to early December, compared to a $1.7bn inflow in 2012. A recent survey by the British Chamber of Commerce Indonesia found that 60% of the total respondents remained confident about their business in the country, down from 83% last year, while the chamber’s ease of doing business rating fell to 50% from 65%.

In an increasingly competitive environment, in which many emerging markets are seeking investment to drive growth, even Indonesia, with its large and growing domestic market, ample resources and strategic location cannot rest on its laurels.

As the IMF said in an August report on Indonesia, “More intense structural reform efforts are needed to reduce supply bottlenecks, broaden the export base, and bolster medium-term economic and employment growth…the main priorities continue to be accelerating infrastructure investment, creating a more open and predictable trade and investment regime.”

Encouraging foreign investment in important sectors such as transport and communications would be an important step in the right direction, ease stress on infrastructure and help enhance Indonesia’s ability to meet its economic potential.

Indonesia pushes pro-investment reform | Economy | Indonesia | Oxford Business Group

Indonesia seeks loophole for mining export ban -economy minister.

Dec 19 (Reuters) - Indonesia's government is looking to find a loophole in next month's ban on the export of unprocessed metal ore, chief economic minister Hatta Rajasa said on Thursday, aimed at miners that already process domestically.

From January 12, mining companies must process their ore before shipping it overseas, a measure that aims to boost the value of exports from Indonesia, the world's top exporter of nickel ore, thermal coal and refined tin.

Uncertainty over the export ban has drawn protests from small mining companies as well as major players, including U.S. giants Freeport McMoRan Copper & Gold and Newmont Mining Corp. which now turn only about a third of their production into refined copper domestically in Indonesia.

Indonesia seeks loophole for mining export ban -economy minister| Reuters

 

[MarveL]

Indonesia Shows Progress in Rebalancing Economy

By Farida Husna
Jan. 2, 2014 5:29 a.m. ET

JAKARTA—Indonesia ran a surprise trade surplus in November and inflation came in below expectations, marking progress in authorities' struggle to rebalance the economy and keep it from overheating.

The $776.8 million trade surplus was Indonesia's highest in almost two years and confounded analysts' predictions that the ledger would show a small deficit. The surplus was achieved mainly by cutting imports, a key step to righting a current-account imbalance that has left Indonesia vulnerable to capital outflows just as the U.S. Federal Reserve winds down a stimulus program that in recent years has flooded global markets with cash.

The improving picture comes after investors punished Indonesia last year because its economy was overheating and consumers were importing massive amounts of goods, even as global demand for Indonesia's commodity exports waned. The exodus of money sent the rupiah tumbling about 20% against the dollar, making it the worst-performing currency in Asia last year.

That sent authorities scurrying to right the ship. Bank Indonesia has raised its benchmark interest rate by 1.75 percentage points since June to attract funds and fight inflation, while the government has slashed fuel subsidies and opened more sectors to foreign investment.

The tighter policy, together with the weak currency, have combined to slow the economy and choke off imports. That helped narrow the current-account deficit to 3.8% of gross domestic product in the third quarter, from 4.4% in the second.

On Thursday, the Central Statistics Agency said imports fell 10.55% from a year earlier and 3.35% from the previous month. Exports rose 1.45% on a monthly basis but fell 2.4% from a year earlier. That resulted in a trade surplus that was well above the $57 million median deficit forecast in a poll of seven economists and October's revised $24 million surplus.

"We think that this improvement in the trade balance is likely sustainable in 2014," ANZ economists Devika Mehndiratta and Glenn Maguire said in a research note. They predicted Indonesia's current-account deficit would shrink to about 2.8% of GDP this year, from some 3.5% of GDP in 2013.

Thursday's trade figures helped lift the rupiah to 12,160 rupiah to the dollar from an intraday low of 12,250. But the worst may not be over: Barclays BARC.LN +0.98%
analysts said the rupiah should continue to depreciate, "given the country's still-sizable current account deficit, an increased political risk premium ahead of elections" and expected U.S. dollar strength as the Fed slows its asset purchases.

Meanwhile, inflation rose in December on higher food prices but came in below analysts' forecasts. The statistics agency said the consumer-price index rose 0.55% in December from a month earlier, faster than November's 0.12% rise. From a year earlier, inflation was largely steady at 8.38%—but was sharply above the December 2012 level of 4.30%.

Still, that base effect can cut both ways. High inflation readings in the second half of 2013 mean the data later this year likely will seem tame by comparison.

"By December 2014 CPI inflation is likely to be close to 5% year-on-year, within the central bank's comfort zone," DBS economist Gundy Cahyadi said ahead of Thursday's data.

Bank Indonesia is aiming to keep inflation in a range of 3.5% to 5.5% this year.

Core inflation, which excludes volatile prices of food products and goods governed by administrative controls, rose 4.98% on an annual basis in December, up from 4.80% in November.

Indonesia Shows Progress in Rebalancing Economy - WSJ.com

 

[Daniel808]

Indonesia drums up demand for $4bn US dollar bond

Indonesia has sold the largest US dollar bond in Asia since 1998, moving to bolster its foreign currency holdings as the Federal Reserve begins to pare back its asset purchases.

The Indonesian government wooed investors with coupons higher than those offered last year, enabling it to increase its planned $3bn issue to $4bn.

The total amount, sold in two $2bn tranches of 10-year and 30-year bonds, matched South Korea’s deal in April 1998, the largest Asian dollar bond sale outside Japan on record, according to Dealogic data.

The 10-year bonds were priced to yield 5.95 per cent, a sharp increase from Indonesia’s debt sale in April last year when it borrowed at a record low of 3.5 per cent. The yield on the 30-year bond was also higher, at 6.85 per cent compared with nine months ago.

The new bonds offer a higher coupon than Indonesia’s outstanding debt of similar duration, helping attract investor interest. In the secondary market, the 30-year bonds sold last year currently trade at 78 cents on the dollar and yield around 6.35 per cent, according to Bloomberg data.

Since last year’s bond, the Indonesian rupiah has fallen by more than 24 per cent against the dollar as investors were spooked by the country’s large and widening current account deficit. The deficit leaves Indonesia reliant on foreign money to pay its bills, making it particularly exposed to any reduction in global liquidity.

The rupiah is Asia’s worst performing currency since the first mention of “tapering” by Fed chairman Ben Bernanke in May last year. Globally, only the Argentine peso has done worse. Indonesia’s bond and equity markets have suffered steep declines exacerbated by uncertainty over this year’s presidential election.


In an effort to stem the outflow of capital, and to help close the deficit, the central bank has raised benchmark interest rates by 175 basis points since June. Bank Indonesia hopes the higher borrowing costs will cut demand for expensive imports as the economy slows.

The World Bank recently cut its growth forecast for this year to 5.3 per cent. In 2012, Indonesia’s economy grew 6.3 per cent.

But while India, a fellow Asian member of the “Fragile Five” emerging markets deemed particularly exposed to the end of US quantitative easing, has enjoyed a bounce in its currency in recent months, the rupiah has extended its slide.

Wednesday’s deal was 4.4 times covered, with 3 per cent of the 30-year bonds going to local investors and two-thirds to US investors. Indonesia’s sovereign debt market remains heavily dependent on foreign demand, with overseas investors holding around a third of the outstanding bonds.

Sri Lanka this week tapped international markets to raise $1bn in five-year debt, backed by strong US demand.



Indonesia drums up demand for $4bn US dollar bond - FT.com

 

[Nike]

Indonesia’s Infrastructure Spending Projected to Reach $39 Billion in 2014
By Tito Summa Siahaan on 8:16 am January 10, 2014.
Category Business, Economy, Featured
Tags: Indonesia infrastructure

Infrastructure spending in Southeast Asia’s largest economy may total Rp 469.7 trillion ($39 billion) this year, according to an official from the Public Works Ministry.

The country’s poor infrastructure, such as roads, airports and seaports, has been cited as one reason many foreign investors are unwilling to put money into the country.

Hediyanto said the state budget would contribute Rp 208.7 trillion to the total spending, followed by contributions from regional governments, investment from state enterprises and the private sector with Rp 103.9 trillion, Rp 89.9 trillion and Rp 67.2 trillion, respectively.

“There is still a gap of around Rp 52 trillion in our infrastructure spending,” the official added.

Hediyanto said the investment gap was due to limitations in the government budgets and the ministry is seeking to plug the discrepancies by inviting more foreign investment through public and private partnership.

The infrastructure spending will create a construction market worth at least Rp 407 trillion, a 10.2 percent increase from last year, according to Hediyanto.

The construction market is estimated by taking into account spending for building materials and services, while excluding expenditure for land acquisition.

He added that the country’s construction market has been growing at double-digit rates for the past couple of years.

“If this pace can be maintained, it could reach Rp 1,000 trillion in the next five years,” Hediyanto said.

But he warned that the country’s increasing need for infrastructure investment needs to be supported by improvement in domestic capacity.

“We have identified several challenges in order for the benefit of construction growth remains within the country,” he said.

He added that one challenge in particular was the risk that stems from importing raw materials.

“Now, Indonesia needs to import more than half of its asphalt needs,” he added.

The ministry estimates the current consumption of asphalt is 1.2 million metric tons a year, while domestic production capacity is less than 500,000 tons.

In addition, last year’s domestic cement sales of 52.7 million tons outstripped the domestic production of 49.9 million tons.

Indonesia has more than 106,000 units of heavy equipment, but more than 70,000 of them are located in the greater Jakarta area. From the total 117,000 contractors, more than 40 percent are based in Java.

Hediyanto lamented the lack of specialization among contractors.

“All of our contractors are general contractors, big or small. What we need in the future is a lot of small specialized contractors while the larger ones can remain as general contractors.”

Specialized contractors would reduce the number of total contractors thus making the process in project execution a lot simpler, according to Hediyanto.

“In China, there are only 62,000 contractors despite the country’s much larger population. That is because they have a lot of contractors who operate in niche markets,” he said.

The small number of certified professionals in the sector adds to the ministry’s concerns with only 400,000 having any kind of certification out of a total workforce of some 6.9 million.

Indonesia’s Infrastructure Spending Projected to Reach $39 Billion in 2014 - The Jakarta Globe

Indonesia-Philippines Divide Shown in Record Start
By Bloomberg on 10:27 am January 10, 2014.
Category Business, Economy, Featured
Tags: bond sale, Indonesia current account deficit, Indonesia economy, Philippines

The Philippines has paid 1.75 percentage points less than similarly-rated Indonesia during a record start for Asian sovereign dollar debt sales, as investors become more selective in emerging markets.

Indonesia sold $4 billion of bonds on Jan. 7, including $2 billion of 10-year notes at 5.95 percent, while the Philippines yesterday offered $1.5 billion of paper of the same maturity at 4.2 percent, data compiled by Bloomberg shows.

Asian nations, replenishing coffers before the Federal Reserve tapers stimulus policies, have now raised a record $6.5 billion this year, 44 percent more than the previous monthly high in January 2010.

Sovereign debt issuance will be larger and more diverse in Asia this year, according to JPMorgan Chase, the top arranger of global bonds for the last two years.

Indonesia will issue $7 billion of external debt in total, Malaysia and Vietnam $1.5 billion each and Thailand $1.25 billion, the bank estimated in a December report.

Indonesia, grappling with a record current-account deficit and a currency that plunged 21 percent last year, is losing out to the Philippines, where foreign worker remittances are keeping the nation in surplus.

“Investors do recognize the fundamental stories for the two countries are very different and diverging,” said Avanti Save, a Singapore-based credit strategist at Barclays. “Sovereigns are front-loading bond issuance given expectations of rising US rates. Bond issuance from Korea, Thailand and a second offering from Indonesia are possible.”

Record Matched Indonesia’s $4 billion bond sale matched a record set by South Korea for the region’s largest-ever sovereign offer in 1998, Bloomberg-compiled data show.

Southeast Asia’s biggest economy also sold $2 billion of 30-year securities at a yield of 6.85 percent, the finance ministry’s debt management office said in a Jan. 8 statement.

“This transaction proves foreign investors are still interested and are confident in Indonesia’s economy,” Robert Pakpahan, a director general at the office, said in an e-mail that day.

Yields on dollar sovereign notes in Indonesia rose 214 basis points last year, the most since 2008, as foreign investors withdrew from the country after the Fed threatened to pare its bond-buying program.

Bank Indonesia raised its benchmark rate by 1.75 percentage points since early June to help reduce imports and slow the economy.

Room to tighten

“We see room for Indonesian sovereign bonds to tighten, as they’re now trading closer to mid-double B sovereigns,” JPMorgan analysts led by Hong Kong-based Soo Chong Lim wrote in a Dec. 2 report. Indonesia’s “improved policy stance complements low public and external debt levels, strong growth, and relatively attractive spread levels versus other large current-account deficit countries such as India, South Africa, and Turkey.”

The yield gap in dollar debt between the Philippines and Indonesia hit a four-month high of 168.8 basis points on Jan. 7, down from a four-year high of 187.6 basis points in August, JPMorgan indexes show.

“We prefer Indonesia’s dollar bonds because they offer better yield and Indonesia’s macroeconomic fundamentals appear to have bottomed,” Chia Tse Chern, a senior director at UOB Asset Management, which oversees about $35 billion, said in a e- mail interview yesterday.

He added that Philippine debt will receive “strong technical support” because the nation’s outstanding dollar bonds will remain unchanged after the sale. Funding Requirements Indonesia, which shares a Baa3 rating by Moody’s Investors Service and BBB- by Fitch Ratings with the Philippines, is rated one rank lower at BB+ by Standard & Poor’s. Differences between bond prices for Indonesia and Philippines reflect how the former requires a larger amount of dollar bonds per year versus the Philippines, which only has a $1 billion program in 2014, said Joey Cuyegkeng, a Manila-based economist at ING Groep NV.

President Benigno Aquino’s economic reforms have helped spur the fastest growth in Southeast Asia. He raised excise taxes on tobacco and alcohol, ousted the top judge for illegally concealing his wealth and made contraceptives free for the poor during his first three years in office.

The country will use the proceeds from its latest sale to buy back foreign-currency bonds and for budgetary support, the person familiar with the matter said yesterday.

The Philippines bought back six different series of dollar notes for $1.08 billion, after paying $1.2 billion for its foreign-currency bonds in November 2012. Philippine Allure “Philippine debt is relatively attractive because the credit rating trajectory for the Philippines is much better than for Indonesia, growth is solid and the political situation is stable,” Sergey Dergachev, who helps oversee about $9 billion as a senior portfolio manager at Union Investment Privatfonds in Frankfurt, said in an e-mail interview.

Even so, he added, “Indonesia was very cheap and brought the deal in a very bullish market phase.”

Sri Lanka kicked off the dollar sovereign sales in Asia this year, issuing $1 billion of 6 percent securities due January 2019 on Jan. 6, according to data compiled by Bloomberg.

The notes, sold to investors at par, were trading at 100.62 cents on the dollar today, prices compiled by Bloomberg show. Indonesia’s 30-year debentures, sold at 98.734, were trading at 100.17 cents, compared with 100.70 cents yesterday, the data show.

“We do expect gross issuance to remain at a healthy level in line with 2013,” said Neeraj Seth, the Singapore-based head of Asian credit at BlackRock, the world’s biggest asset manager with $4 trillion as of Sept. 30.

“The expectation of potentially higher rates does play a role in some front loading of issuance but it’s not the only reason. Some of the sovereigns didn’t issue last year.”

Bloomberg

Indonesia-Philippines Divide Shown in Record Start - The Jakarta Globe

Indonesia to Raise Copper Export Taxes to 60% in H2 2016
By Rieka Rahadiana on 5:24 pm January 13, 2014.
Category Business, Commodities
Tags: Finance Minister Chatib Basri, Indonesia copper, raw mineral export ban

Indonesia will introduce a progressive export tax for copper concentrate that will rise to a maximum 60 percent of a shipment’s value by the second half of 2016, in bid to lift domestic refining capacity, the finance minister said on Monday.

President Susilo Bambang Yudhoyono signed last-minute regulations on Saturday to ease a mineral export ban for certain minerals, allowing exports of copper concentrate to continue.

“The aim of the export tax is not revenue, but more on securing the domestic market,” said Finance Minister Chatib Basri. “The policy will hit us in the short term, but we will post a trade surplus in 2016-2017.”

Reuters

Indonesia to Raise Copper Export Taxes to 60% in H2 2016 - The Jakarta Globe

India, Indonesia’s Push for Dollars Helps Send Asian FX Reserves to Record High
By Suvashree Dey Choudhury & Rieka Rahadiana on 12:39 pm January 13, 2014.
Category Business
Tags: Forex, India, US Federal Reserve

As the US Federal Reserve winds down an era of easy money, Asia has built up record-high currency reserves, as countries especially those most dependent on foreign capital inflows amass dollars in case investors cut and run.

Foreign exchange reserves in 13 Asian countries excluding Japan tracked by Thomson Reuters are expected to have risen 3.2 percent to a record high $6 trillion in the October-December quarter, marking a near 12 percent increase for the whole year.

The estimate includes an expected 3.8 percent rise in China’s FX reserves to an all-time high of $3.8 trillion, or a whopping 19.5 percent surge for the year. The country will report numbers in coming days.

The rise in reserves in the last quarter was led by India and Indonesia, according to data this week, providing comfort about two countries dependent on foreign money to help narrow their traditionally hefty current account deficits.

Both took further steps this week to bolster their defenses, with Indonesia raising $4 billion via a bond sale, and India expanding a currency swap agreement with Japan to potentially as much as $50 billion from $15 billion after going on a massive drive late last year to raise money from abroad.

Yet analysts say both may need to do more to avoid the type of painful measures, including interest rate hikes, they undertook last year when foreign investors raced to the exits amid fears the Fed was about to start winding down its money-printing stimulus program.

That is especially true for Indonesia, given its current-account deficit hit a record 4.4 percent of gross domestic product in the second quarter of 2013.

“Recent global bond issuance should help to shore up market confidence, but Indonesia still needs more funds either from sovereign or domestic bonds to cover its current account deficit,” said Rangga Cipta, an economist for Samuel Sekuritas in Jakarta.

“And as risks from global trends and inflation continue to be seen ahead, BI [Bank Indonesia] still needs to increase the benchmark rate in the first half.”

Although Indonesia’s reserves rose by 3.9 percent in the October-December quarter to $99.4 billion, the biggest rise since the first three months of 2011, it still saw reserves fall 12 percent for 2013, after hitting a more than 2-1/2 year low in July.

Indonesia’s reserves cover only around five months of imports and around 1.6 times short-term debt, among the lowest in the region, according to JPMorgan estimates last month.

Jakarta has also sought additional cover through currency swaps with other Southeast Asian countries as well as Japan.

Staying on guard

India is also seen as vulnerable, although confidence is improving after FX reserves surged 7 percent in the October-December quarter to $295.71 billion, the biggest quarterly increase since January-March 2008.

India on Friday said FX reserves in the week ended on Jan. 3 fell to $293.11 billion.

The big improvement came after lenders took advantage of central bank subsidies to raise $34 billion from deposits and capital abroad. Worries about its current-account deficit and foreign outflows drove the rupee currency down by as much as 20 percent to record lows last year.

Policymakers in India and Indonesia have pledged renewed vigilance after the Fed said in December it would start to reduce monthly bond purchases by $10 billion a month.

Both countries were forced to take strong measures last year after their currencies tumbled, with Bank Indonesia raising interest rates by a total of 175 basis points since June, although it held policy steady on Thursday.

Despite the hikes, foreign investors still ended selling $1.8 billion worth of shares in Indonesia, according to Credit Suisse estimates, and Rp 53.31 trillion ($4.37 billion) in government bonds, according to the finance ministry.

Meanwhile, the Reserve Bank of India raised short-term rates in June. Although a rebound in the rupee has allowed it to wind down those emergency steps, it had to raise interest rates by 50 bps to deal with surging inflation.

RBI officials say continuing to build their FX reserves will be a priority, especially by buying dollars at advantageous rates.

“There is a change in strategy now. The current strategy is to build reserves whenever there is an opportunity so that whenever required we can protect the currency,” said an Indian policymaker who declined to be identified talking about the country’s FX strategy.

Malaysia remains another source of concerns for analysts.

Foreign investors have big holdings in its markets, while the central bank has traditionally been reluctant to intervene even as currency reserves fell 3.4 percent to $134.9 billion last year, near their lowest in 1-1/2 years.

These worries contrast with the rest of the region, where reserves in South Korea and Taiwan hit record highs, and where the prospect of currency appreciation against the slumping Japanese yen had been a stronger concern.

Although South Korea has been suspected of intervening in recent months to prevent the won from appreciating too much against the yen, analysts say that could change now that the dollar has strengthened after the start of the Fed taper.

“It’s hard to expect the won to keep rising against the dollar given the external uncertainties about the pace of the US tapering and how that affects the US economy,” said Son Eun-jung, a currency analysts at Woori Futures in Seoul.

Reuters

India, Indonesia's Push for Dollars Helps Send Asian FX Reserves to Record High - The Jakarta Globe