Indonesia Economy Forum

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IMF: Indonesia Outlook for 2016 Solid, Thanks to Economic Reform Measures

Jakarta. Indonesia’s economic outlook remains solid, with ongoing reforms by the government expected to help GDP growth rebound to 5 percent next year, the International Monetary Fund says.

An IMF team that visited the country from Dec. 7 to 17 said it found the government had demonstrated “sound monetary management and a prudent fiscal stance” in the past year to navigate through the challenging environment of weak commodity prices, global economic slowdown, and financial market volatility.

“Overall, macroeconomic performance in 2015 has been satisfactory,” Luis E. Breuer, the head of the delegation, said in a statement issued on Tuesday.

“Economic growth has stabilized and is projected to reach 4.7 percent this year. A moderate acceleration to around 5 percent is forecast in 2016. Investment activity [will] lead the recovery, in particular, public sector spending.”

While the IMF’s growth forecast is lower than the government’s projection of 5.3 percent, Breuer said the medium-term outlook also remained favorable, thanks to a series of stimulus measures issued by the government to streamline business and investment activity. Inflation next year should hover between 3 and 5 percent, with a moderate increase in the current-account deficit, he said.

“The authorities expressed a strong commitment to continue with structural reforms to establish new drivers of growth, including reviewing the role of domestic and foreign investment and assessing the benefits of regional trading arrangements,” Breuer said, noting that more flexibility in labor practices could encourage employment as well as new private investment.

Breuer also called Bank Indonesia’s current monetary policy stance “appropriate” in helping the economy adjust to external pressures, even as calls mount for the central bank to cut its key interest rate in help spur growth.

BI has held its rate at 7.5 percent since February, citing efforts to maintain the weakening rupiah, which has lost nearly 10 percent of its value against the US dollar since the start of the year.

Breuer said there were some downside risks to the outlook, cautioning of further declines in commodity prices as well as slowing demand from Indonesia’s main trading partners, such as China, and concerns about the government’s execution of its economic reform plans.

“Domestic risks could arise from slower-than-expected progress on implementation of key structural reforms, tax revenue and infrastructure spending,” he said, adding there were also challenges with revenue mobilization, as much of the government’s revenue is derived from commodities.


IMF: Indonesia Outlook for 2016 Solid, Thanks to Economic Reform Measures | Jakarta Globe

 

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Google Co-Founder Sergey Brin Visiting Indonesia

Jakarta. Sergey Brin, one of the founders of tech giant Google, is currently visiting Indonesia to meet with top government officials in Southeast Asia's largest economy, a local media outlet reported on Monday.

Brin arrived in Jakarta on Monday after spending time in Raja Ampat, Papua. During his visit, Brin was scheduled to meet with Tourism Minister Arief Yahya as well as Communications and Information Technology Minister Rudiantara.

The Google co-founder was also slated to discuss Google's Project Loon, an initiative to bring Internet access to remote areas of Indonesia by using a balloon-powered network, and also to show support for the local start-up ecosystem with the communications minister, according to a report by Kompas.com.

Earlier in October, three of the country's largest operators — state-owned Telkomsel, Indosat and XL Axiata — announceda plan to team up with Alphabet, Google's holding company, to test Project Loon in Indonesia.

Google Co-Founder Sergey Brin Visiting Indonesia | Jakarta Globe

 

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Workers is in process to finishing the renovation efforts of Jakarta Old City districts. The effort to renovate 17 buildings is led by Jakarta Special Administrative government, to preserve the historic building in which had a historical ties towards Jakarta culture and identity. ANTARA PHOTO/Wahyu Putro A/foc/15.

Pekerja menyelesaikan renovasi gedung di Kawasan Kota Tua Jakarta, Senin (28/12). Pemda DKI Jakarta melakukan peremajaan 17 gedung di Kawasan Kota Tua sebagai salahsatu usaha untuk melestarikan bangunan bersejarah. ANTARA FOTO/Wahyu Putro A/foc/15.

 

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President not keen to take hasty decision on Masela project
Selasa, 29 Desember 2015 20:17 WIB | 237 Views

Jakarta (ANTARA News) - President Joko Widodo (Jokowi) expressed that he would not hurry in arriving at a decision on the development of the Masela oil and gas block in Maluku province.

While opening a limited meeting to discuss the Masela block at the presidential office here on Tuesday, President Jokowi emphasized that a right decision needs to be taken for the Masela project.

"The development of the Masela block is a huge project, and therefore, the decision to be made must be true and correct," the president noted.

According to Jokowi, the wealth of natural resources of oil and gas will sooner or later run out.

Hence, on the occasion, the president urged the relevant parties to conduct detailed calculations and study, so that a right decision is taken on the fate of the Masela block.

"I know that this great project will offer economic benefits and create an immediate value add, which will have a multiplier effect on our national economy," he added.(*)

President not keen to take hasty decision on Masela project - ANTARA News

 

[Zero_wing]

Workers is in process to finishing the renovation efforts of Jakarta Old City districts. The effort to renovate 17 buildings is led by Jakarta Special Administrative government, to preserve the historic building in which had a historical ties towards Jakarta culture and identity. ANTARA PHOTO/Wahyu Putro A/foc/15.

Pekerja menyelesaikan renovasi gedung di Kawasan Kota Tua Jakarta, Senin (28/12). Pemda DKI Jakarta melakukan peremajaan 17 gedung di Kawasan Kota Tua sebagai salahsatu usaha untuk melestarikan bangunan bersejarah. ANTARA FOTO/Wahyu Putro A/foc/15.

Good value the past

 

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BKPM: Power Plant Projects Dominate 2015 Investment Proposals

Jakarta. Power plant projects dominated investment proposals in Indonesia with up to 37.5 percent of the total this year, taking the government one step closer to achieving its goal of rolling out 35 gigawatts in additional power-generating capacity by 2019.

Indonesia's Investment Coordinating Board (BKPM) reported that it received Rp 707.37 trillion worth of principle license proposals for projects in the electricity, water and gas sectors between Jan. 1 and Dec. 28 this year, tripling from the same period last year.

The country booked about Rp 1,886 trillion worth of principle licenses in total so far this year, up 45 percent from the same period last year, according to BKPM.

Still, actual execution of the proposed projects — one of the country's biggest stumbling blocks — remains to be proven.

"Whenever we visit construction sites this year, one of the biggest problems is energy. Because of that, realizing this investment in the long run will be crucial in boosting the competitiveness of other sectors," BKPM chief Franky Sibarani said in a statement received by the Jakarta Globe on Tuesday.

He said that the government has been making attempts to streamline and improve the licensing process as well as offering tax allowance facilities in the electricity sector in order to achieve the 35 gigawatt goal.

This included efforts to coordinate with the Ministry of Energy and Mineral Resources and state electricity operator Perusahaan Listrik Negara to cut the licensing process to 25 permits within 256 days compared to 49 permits in 923 days, according to a statement


BKPM: Power Plant Projects Dominate 2015 Investment Proposals | Jakarta Globe

OJK Targets Bilateral Cooperations With Thailand, Myanmar in New Year

Jakarta. Indonesia's financial regulator, the Financial Services Authority, known as OJK, has set a target to seal bilateral cooperations with two Association of Southeast Asian Nations in the first quarter of the new year.

Thailand and Myanmar will be the first two nations in the Asean bloc to form such cooperations with Indonesia ahead of the 2020 target of wider banking sector liberalization as set out by the Asean Banking Integration Framework.

OJK Chairman Muliaman D. Hadad said Indonesia is committed to solidifying bilateral cooperations with all countries in the bloc, so Asean members can enjoy reciprocal interactions.

By the first quarter of next year only two nations — Thailand and Myanmar — can settle banking sector bilateral cooperations with Indonesia, while the remaining nations still needing further discussions.

"Currently, we are awaiting for answers from Malaysia. There are things cannot be settled right now about the payment system. Overthere, the payment system also involves the private sector," Muliaman said recently.

The bloc — with a combined population of 600 million and a total gross domestic product of around $3 trillion — will roll-out economic integration on Jan. 1, 2016.

Banking integration has a target of 2020, as financial systems in individual countries need further time for consolidation.

Indonesia's low financial services penetration

OJK's cooperation with its regional peers should allow reciprocity for Indonesian banks and further growth, as currently lenders from Indonesia have limited expansion among Asean, Muliaman said.

Still, he warned Indonesia's large market share is at risk of being eaten by regional competition, as financial products are yet to penetrate local markets in far-flung provinces.

The ratio of assets of commercial banks operating in Indonesia to the nation's GDP remains relatively low at 55 percent, compared to regional rivals which reach up to 88 percent.

Agus Martowardojo, the central bank governor and a veteran banker, highlighted the gap between expansion of lenders from Indonesia's neighbouring countries like Singapore and Malaysia in Indonesia and vice versa.

Four banks currently operating in Indonesia and owned by Singaporean investors — DBS Indonesia, Bank Danamon Indonesia, OCBC NISP and UOB Indonesia — already operate thousands of branch offices and ATMs in the country. Similarly, Malaysian-controlled lenders Maybank Indonesia and CIMB Niaga have enjoyed successful expansion.

Agus pointed to locally-owned banks, like Bank Mandiri and Bank Negara Indonesia, as examples of lenders which will face difficulty in expanding in the more financially developed Singapore and Malaysia

OJK Targets Bilateral Cooperations With Thailand, Myanmar in New Year | Jakarta Globe

 

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Kertas dengan tulisan ala kadar-nya ini bakalan masuk museum habis dibuka kapsul waktunya 70 tahun kemudian

 

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Kertas dengan tulisan ala kadar-nya ini bakalan masuk museum habis dibuka kapsul waktunya 70 tahun kemudian

Will become the most wanted collector item 70 years from now, at least in Indonesia.

 

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RI enters 2016, confident of solid economic foundation
Rabu, 30 Desember 2015 09:33 WIB | 293 Views
Pewarta: Andi Abdussalam

Jakarta (ANTARA News) - Indonesias economy grew at a slow pace in 2015 due to internal and external factors but government is confident of solid prospects as it enters 2016 since it has laid a strong economic foundation.

The global pressures and economic downturns, coupled with internal factors such as a drop in exports, low budget absorption, decline in the rupiahs exchange rate and weakening of the peoples purchasing power, contributed to a slowdown in Indonesias economic progress.

However, Indonesias economic prospects remain strong as it enters 2016 since it took significant steps over the past few years.

"In 2015, we were able to build a good and strong foundation," President Joko Widodo (Jokowi) stated while opening a plenary cabinet meeting at his office in Jakarta on December 23, 2015.

The International Monetary Fund (IMF) also confirmed that the countrys economic prospects remain solid, thanks to the significant steps it took over the past several years.

"They (the Indonesian government) have demonstrated wise monetary and fiscal management policies, supported by historic fuel oil subsidy reforms in 2015," Luis E. Breuer, the IMF team leader in Indonesia, said in a statement made available to ANTARA last week.

The indications of the national economic slowdown were visible in the first half of 2015. According to the Central Bureau of Statistics (BPS), the economy grew by 4.67 percent year-on-year in the second quarter, down from 5.12 percent in the same period last year.

The second-quarter growth also declined when compared to 4.71 percent growth rate in the previous quarter.

Indonesias economic growth started showing signs of improvement in the third quarter when it rose to 4.67 percent year-on-year, fueled by government spending and household consumption.

Overall, the economic growth during the January-September 2015 period stood at 4.71 percent. The government has forecast that the economy will grow by 4.9 percent in the fourth quarter. Thus, it implies that the economic growth will fall short of its target of 5.5 percent for the entire year of 2015.

The IMF team is of the view that what has been done by the Indonesian government has contributed to Indonesias macroeconomic stability and supported growth. "As a result, Indonesia could trudge the path safely amid difficult external environment in 2015 due to a fall in commodity prices, the shift in the global financial condition and the slowing down of growth in countries that were Indonesias trade partners," noted Luis E. Breuer.

As per the IMF, Indonesia has advantageous mid-term prospects supported by inclusive growth policy agenda, that have set Indonesia in the path towards stability.

Overall, the IMF viewed Indonesias macroeconomic performance in 2015 as satisfying with a stable economic growth projected at 4.7 percent. It is seen as a moderate acceleration to pursue an economic growth prediction of about 5.0 percent in 2016.

"Investment activities will lead to recovery, especially in the public expenditure sector. Weak commodity prices and demand from Indonesian trade partners will improve and will contribute to growth. Inflation will also sharply fall to a predicted 3.0 percent at the end of 2015. Next year (2016), it is expected to be in the range of 3.0-5.0 percent," he said.

Besides that, external transaction deficit is also expected to narrow significantly in 2015, estimated at 2.0 percent of the Gross Domestic Product (GDP) with low imports. Import projection in 2016 will, however, increase due to increasing domestic demand.

"Fiscal deficit in 2015 is predicted to increase though it will remain under 3.0 percent of the GDP," stated Breuer.

Therefore, President Jokowi has expressed belief that the nations foundation is strong enough to meet the challenges in 2016 in terms of budget policy, infrastructure growth, and country-centric development.

"In 2015, we have built a good and strong foundation," he stated while opening a plenary cabinet meeting at his office here on Wednesday (Dec 23).

With regard to the budget policy, he explained that the government had shifted the fuel oil subsidy to programs that directly benefit the people.

The government has also expedited infrastructure development, including of toll roads, railway lines, airports, and seaports, he added.

"We have also altered the orientation of development, which is no longer centered in Java but in Indonesia as a whole, starting from the outermost and the most backward regions," he remarked.

With such a strong foundation in place, he hoped Indonesia would progress faster and strive harder as the challenges in 2016 are more difficult compared to those encountered in 2015.

President Widodo affirmed that 2015 was a year full of challenges for Indonesia ranging from the global economic slowdown, the plummeting commodity prices, forest and peatland fires in various regions in the country, and depreciation of the countrys rupiah against the US dollar.

He stated that the global economy would not fully recover next year, and it would be a challenge in itself.

He, however, hoped that the economic slowdown would not worsen next year.

"We will also face an era of competition, and at the regional level, we are all aware that we will enter the era of the ASEAN Economic Community," he added.(*)

RI enters 2016, confident of solid economic foundation - ANTARA News

 

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Construction said to be
top dog next year
The Jakarta Post, Jakarta | Business | Wed, December 30 2015, 5:40 PM

As the government is set to accelerate the development of infrastructure and telecommunications, investors have been advised to closely monitor a number of stocks related to construction and telecommunications next year as their investment options.

KDB Daewoo Securities research head Taye Shim said that builders had shown positive progress with 22,356 new contracts this year, a 10 percent increase from last year.

“Unlike developers, which are mostly affected by lower investor interest in houses and apartments, construction firms can always build other things, especially with the government’s ambitious infrastructure project until 2019,” Taye said recently.

According to National Planning Agency data, the government aims to construct an additional 8,200 kilometers worth of roads, 3,258 km new railroads, 172 new seaports, 15 new airports, new power plants, 90,000 new household gas networks and 28 dams by 2019.

KDB Daewoo data said contractors’ projects this year went to buildings (45.9 percent), followed by ports (21.3 percent), roads and bridges (18.7 percent), energy related infrastructure (12.2 percent ), with the remaining 1.9 percent having gone to irrigation and other construction work.

Credit Suisse also placed construction as the top market next year on account of the projected high government spending on the sector.

“The catalyst for the sector can be the continued momentum on disbursements for new projects and tenders,” said Jahanzeb Naseer, the bank’s head of equity research for Indonesia.

The bank estimated state spending for infrastructure this year to grow 19 percent to Rp 250 trillion (US$18.2 billion), while for next year, the figure is expected to increase 21 percent to Rp 300 trillion.

Meanwhile, Bahana Securities rated the sector “neutral”, saying that the main challenges would stem from cash flow management and securing financing, particularly owing to increased investment and
project sizes.

However, the company expected faster development prospects on toll roads as it saw improved land acquisition procedures, propelling the government’s plan to build highways. In addition, the government has also offered viability gap funding to attract investment in unfavorable toll road sections.

Securities companies also saw information and communications technology (ICT) as having huge potential sales growth on the back of high consumption in the country’s 250 million strong population.

Daewoo noted that ICT grew at around 11 percent this year.

According to the Indonesian Internet Service Providers Association (APJII), Indonesia had 88.1 million internet users in 2014, 39.4 percent of the total population. Of the figure, 85 percent of users accessed the internet through a smartphone. Within the next two years, internet penetration and smartphone users nationwide are forecast to hit 55 percent and 41 percent, respectively.

Meanwhile, Bahana expected continued improvement in the smartphone proportion, from 37 percent currently to 50 percent by 2017. “This should have a positive impact on data usage as well as ARPU [Average Revenue per User],” Bahana’s head of research, Harry Su, said. (rbk)


- See more at: Construction said to be top dog next year | The Jakarta Post

 

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UNESCO recognizes nine Balinese dances

Nine traditional Balinese dances have been recognized as part of the world’s intangible cultural heritage following a UNESCO session in Namibia on Wednesday. Balinese dances included on the list were the Barong Ket, Joged Bumbung, Legong Keraton, Topeng Sidhakarya, Baris Upacara, Sanghyang Dedari and Rejang dances, as well as the Wayang Wong and Gambuh dance dramas.

UNESCO recognizes nine Balinese dances | The Jakarta Post

 

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Jakarta to build multi-storey housing complexes
Kamis, 31 Desember 2015 08:56 WIB | 298 Views

Jakarta (ANTARA News) - The Jakarta provincial government has formulated plans to build 22,000 units of multi-storey housing complexes at 31 different locations in the Indonesias capital city.

"We have prepared a plan with Rp3.1 trillion budget to construct these multi-storey housing complexes. Currently, we are awaiting the auction process to start," Jakarta Governor Basuki Tjahaja Purnama, better known as Ahok, remarked here on Wednesday.

According to him, the city government has set a target of building 50 complexes of such multi-storey houses every year.

"Actually, we think we would be able to build about 30 to 50 flats (multi-storey housing complexes) every year. This year we failed to reach the target, but next year, we will speed up this development process," Ahok explained.

The governor further said the housing towers will be prioritized for residents affected by the rivers and reservoirs normalization program in the city.

Four of the 31 multi-storey housing complexes will be near the traditional markets of Tanah Abang, Serdang, Kebon Melati and Grogol.(*)

Jakarta to build multi-storey housing complexes - ANTARA News

 

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New Wamena airport in mountainous Papua region inagurated today (31/12/2015)

This simple yet modern airport might not look much, but if we compare with the previous facilities, this is already a big improvement for Papua.

The old building (before got caught on fire on 2011)

After got caught on fire on 26 September 2011, this airport was reduced to this miserable state for quite a long time.

So yeah, this is a big improvement.