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Why Indonesia’s markets kept calm and carried on

Leslie Shaffer | @LeslieShaffer1
2 Hours AgoCNBC.com

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As Indonesia's capital Jakarta was being rocked by its worst terror attack in six years, the country's central bank was meeting less than two miles away from the epicenter.

Rate-setters chose to proceed with their on-going meeting, deciding to cut the benchmark interest rate by 25 basis points to 7.25 percent, in line with analysts' expectations.

The central bank's move, coupled with a reasonably swift recovery in the country's stock market and the currency, underscored the muted reaction of investors to the tragic event.

"We should never belittle the impact of any one event, but it is part of a situation where we're seeing a broad range of uncertainties in the world right now and sadly, this is just one of them," David Howard-Jones, a partner at consultancy Oliver Wyman, told CNBC's Squawk Box. "We've already seen substantial turmoil in the financial markets for a range of other reasons in the last couple of weeks."

Indonesia's financial markets barely blinked.

The Jakarta Composite Index, which was down around 0.2 percent before the attacks, tumbled as much as 1.78 percent in their wake, but quickly recovered in the afternoon session to close down 0.53 percent, making it one of the region's best performers for the day. The index is down around 14 percent since the beginning of 2015.

The rupiah also retraced its initial losses. The dollar fetched as much as 13,960 rupiah after the attacks, but by late afternoon, it was around 13,850 rupiah, similar to levels before the news.

In early trade Friday, a dollar was worth 13,390 rupiah and the Jakarta Composite was up 0.4 percent.

The market shrug-off wasn't just a local phenomenon. In overnight trade, the U.S.-listed Indonesia exchange-traded fund (ETF) , iShares MSCI Indonesia (EIDO), actually ended up 1.32 percent.

One reason for the calm: The longer term impact may be limited.

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Indonesia Tourism Revenue, % of GDP (Source: Bloomberg, OCBC)
Unlike nearby Thailand, tourism just doesn't matter that much to Jakarta itself, or even the country as a whole.

"Tourism – a sector that would understandably be most sensitive – makes up just around 1 percent of the economy. The silver lining here too is that Jakarta is never traditionally a tourist magnet, unlike Bali, for instance," Wellian Wiranto, an economist at OCBC Bank, said in a note late Thursday. "Bank Indonesia did what it did, which is to cut rate by 25bps across all three key rates, partly because it knows that such terrorist attacks would have little long-term repercussions for the Indonesian economy."

The terror groups on Southeast Asia's doorstep
Wiranto noted that in the wake of the last major terrorist attack in Jakarta -- the 2009 bombings of two luxury hotels -- the effects petered out quickly.

OCBC's figures include direct tourism revenue, without extrapolating secondary effects such as restaurants and retail figures.

The World Travel & Tourism Council estimates that travel and tourism contributed 3.2 percent of Indonesia's gross domestic product (GDP) in 2014, while the total contribution was around 9.3 percent of GDP.

But the attacks may complicate efforts to revive the country's flagging economy and Indonesia's President Joko Widodo's initiative to drive tourism growth. ANZ estimated the attack could shave 0.25 percentage point off Indonesia's economic growth forecast for the first quarter.

"Foreign tourist arrivals had grown by 7.19 percent last year and this pace of growth could be expected to slow in 2016 given today's events," ANZ said in a note on Thursday.

But general ignorance may help keep the tourists coming. A 2013 poll from Australian opinion polling company Newspoll found that around 29 percent of all Australians claim to have visited Indonesia at some point, but only 70 percent knew that popular tourist destination Bali was in Indonesia. In 2013, around 11 percent of foreign tourist arrivals were from Australian residents.

There is, however, another potential reason markets kept their cool: The attacks, for which ISIS claimed responsibility, don't appear to have been carried out by the A-team, with some analysts calling them "amateurish." While apparently timed to coincide with a busy lunch period in a major shopping area, most of the casualties were the attackers themselves.

An Indonesian and a Canadian were killed in the attack and 20 people were wounded, Reuters reported. Five suicide bombers blew themselves up.

That may be because Indonesia's counter-terrorism forces had already moved in response to warnings late last year.

"They actually did a good job of cracking down in December against ISIS ringleaders and crews that were reported to be plotting widespread attacks geared toward Christmas and New Year's," noted Jonah Blank, senior political scientist at researcher Rand, on CNBC's The Rundown. "It's quite possible that the Indonesian (counterterrorism force) Detachment 88 and other units headed off a much, much bigger and more important attack and this is merely the residue."

Outside the financial markets, foreign investment into Indonesia will likely be closely watched, but it may not be affected much.

Lin Neumann, managing director of AmCham Indonesia, told CNBC's SquawkBox that terrorist attacks in the country aren't new and foreign companies operating in Indonesia already factorthe country's security situation into their decisions.

He found the effective police response to Thursday's attack encouraging.

"This is an overwhelmingly moderate progressive Muslim majority country and there is no tolerance here for this kind of activity," Neumann said. "The worst thing that could happen would be for people to conclude that it's a dangerous place for investment. I don't think it is and I think there hasn't been enough of this kind of activity to scare away investors."

Indonesian markets carry on despite terror attacks
 
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Terror attacks will not affect monetary conditions: Minister
Jumat, 15 Januari 2016 07:09 WIB | 544 Views

Jakarta (ANTARA News) - The Coordinating Minister for Economic Affairs, Darmin Nasution said on Thursday that monetary conditions will not be affected by the terror attacks that took place in Jakarta on Thursday.

"No, they will not (be affected). The stock exchange has returned to its normal condition and so there is no need to worry about the monetary conditions," he said at the presidential palace.

He said he hoped the incident would not be blown up excessively to make the situation fearful and hurt the countrys monetary performance.

Darmin further stated that it was normal for the market to react after the incident had happened, but "it must not be blown up. It is alright for a reaction to happen but it will be normal again by tomorrow."

The minister said he had monitored the market until closing time on Thursday evening and had seen no sign of excessive reaction, with regards to the rupiah exchange rate against the U.S. dollar.

Even the Jakarta share price index remained normal, he pointed out.

Darmin said the incident had been dealt with by the relevant authorities and called on people to remain calm and not to overreact.

"We can say that the impact is not much as it was handled quickly and so it has waned," he said.(*)
Terror attacks will not affect monetary conditions: Minister - ANTARA News
 
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Trade deficit may continue in 2016: Chief economic minister
Jumat, 15 Januari 2016 20:40 WIB | 300 Views

Jakarta (ANTARA News) - There is a high likelihood that the trade deficit in December would continue throughout 2016, according to Coordinating Minister for Economic Affairs Darmin Nasution.

"The trend indeed exists," he stated here on Friday.

He noted that the trend could occur as the economy is expected to improve, which would lead to imports, especially of capital goods, necessary to boost the investment value.

On the other hand, exports are forecast to remain weak due to the declining demand from advanced countries and global economic growth, which is projected to still remain slow, he affirmed.

"Deficit is not always bad. If the economy moves, the imports will rise. However, exports will not automatically increase since the global economy has not yet improved," he pointed out.

According to the National Statistics Agency (BPS), Indonesia had recorded a trade surplus of US$7.51 billion in 2015, although it had suffered a deficit of US$235.8 million.

"The balance of trade from January to December 2015 was in surplus of US$7.51 billion, while there was a deficit of US$235.8 million in December," BPS Chief Suryamin remarked at a press conference.

He stated that during the January-December 2015 period, exports reached US$150.25 billion, while imports were recorded at US$142.74 billion.

Suryamin added that the US$235.8 million deficit in December 2015 occurred as the imports had reached US$12.12 billion, while exports were recorded at only US$11.89 billion.(*)
 
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Foreign tourists still heading to Yogyakarta despite Jakarta attacks

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Photo: Reuters

YOGYAKARTA - There has been no tour cancellations to Yogyakarta followingThursday's terror attack in Central Jakarta, the Indonesian Hotel and Restaurant Association (PHRI) said.

"It's true there were foreign casualties in the terror attack, but we assured them (tourists) that Yogyakarta was safe and foreigners would still be able to find comfort here. (So far) there have been no cancellations," Yogyakarta PHRI secretary Dedy Pranowo Eryono told thejakartapost.com on Friday (Jan 15).

According to Mr Dedy, the impact of the attack was not significant because Jakarta - located some 400km away from Yogyakarta - was not the main entry gate for foreign tourists, who usually visited Bali prior to exploring other destinations throughout the archipelago.

"It's a different situation compared to the 2012 Bali bombing. Following that incident, many cancellations were made and the number of foreign tourists significantly dropped," said Mr Dedy, adding that visitors from Europe, Japan and Australia would continued to arrive in Indonesia throughout January,which is usually a less hectic period for tourism compared with October and November.

Separately, Garuda Java Tour and Travel owner Edi Prabowo said his company expected to serve some 300 Japanese tourists visiting Yogyakarta, Java's cultural heartland, in January.

"Some visitors were worried at first and asked (us) about the situation after the attack, but after being informed, they feel safe to travel to Yogyakarta," said Mr Edi.

Yogyakarta Tourism Agency head Aris Riyatna confirmed that no cancellations had been made by travel agents catering to foreigners as of Friday afternoon.

"We have coordinated with travel agents and others to deliver correct information and intensively communicate with foreign travel agents," said Mr Aris.

He added that tourists from the Netherlands, Japan and Malaysia account for the majority of visitors to the city. Total arrivals reached 281,000 last year, an increase of 17 per cent from the year before.

"For domestic tourists, the number reached 3.4 million, a 21 per cent increase from 2014," Mr Aris said.

Foreign tourists still heading to Yogyakarta despite Jakarta attacks, AsiaOne Asia News
 
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The tourist industry is not affected by terror

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Foreign tourists visiting Prambanan, Sleman, Yogyakarta, on Friday (15/1). Terror in Jakarta the day before did not have an impact on the decline in the number of tourists in the area.

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Highway construction projects Cileunyi-Sumedang-Dawuan (Cisumdawu) across Rancakalong, Sumedang regency, West Java, in the works, as seen on Thursday. Aside from being a supporting infrastructure in the West Java International Airport Kertajati, Majalengka, the toll is expected to also support other sectors that help the growth of the economy of West Java.
 
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World Bank: Indonesia Among the World’s Least-Connected Countries


Jakarta.
Indonesia continues to have one of the poorest rates of Internet connectivity and access of any country in the world, a new report by the World Bank has confirmed.

The lender’s “World Development Report 2016: Digital Dividends” looks at how digital technology and its impact on the economy have spread in many parts of the world. In many countries, however, access to the Internet remains out of reach of many, and governments lack the regulations to keep pace with the growth of technology.

The report ranks Indonesia behind only India and China as the country with the highest number of people without access to the Internet. Worldwide, there were 3.2 billion Internet users out of a total population of 7.4 billion in 2015, according to the report.

“For Indonesia to reap the benefits of steamships took 160 years after their invention ... Mobile phones and the Internet took only a few years,” the report said.

“So, while digital technologies have been spreading, digital dividends have not. Why? For two reasons. First, nearly 60 percent of the world’s people are still offline and can’t participate in the digital economy in any meaningful way. Second, some of the perceived benefits of digital technologies are offset by emerging risks.”

The report suggests that digital technologies, especially the Internet, have dramatically changed the way people get information, which in turn has promoted financial inclusion, created jobs and boosted the economy.

Governments need to encourage market competition, public-private partnerships and make effective regulations for the Internet and mobile operators to encourage universal and affordable access to the digital technologies, the World Bank said.

“Digital development strategies need to be broader than ICT strategies. Connectivity for all remains an important goal and a tremendous challenge,” the report said.

“But countries also need to create favorable conditions for technology to be effective. When the analogue complements are absent, the development impact will be disappointing. But when countries build a strong analog foundation, they will reap ample digital dividends – in faster growth, more jobs, and better services.”

The World Bank noted that the Indonesian government was on the right track to addressing the issues raised in the report. State-owned telecoms firm Telekomunikasi Indonesia, for instance, has a Digital Network road map that aims to improve Internet connectivity nationwide.

Communications Minister Rudiantara told Jakarta Globe that the government was also finalizing an e-commerce road map to keep pace with the explosive growth in online selling and buying.

“We are currently discussing the road map. There are 30 initiatives in it, one of which is about funding. There are many forms of funding, including funding for startups and for established companies,” he said.
World Bank: Indonesia Among the World’s Least-Connected Countries | Jakarta Globe

there is still some untapped potential growth and investment in communication sector, means a large economic resources yet to be developed

Japan's JFE Steel Starts Production in Indonesia
Jakarta.
JFE Steel Galvanizing Indonesia, the wholly-owned local unit of Japanese JFE Steel Corporation, has started production at its steel plant in Bekasi, West Java, two months ahead of schedule, the company said in a statement on Friday.

The plant, with a capacity of 400,000 galvanized steel sheets a year, is JFE's third plant in Asia outside of Japan, after similar factories in China and Thailand.

JFE Steel expects to cater to rising demand from automotive manufacturers, the company said in the statement.

The company pointed to Indonesia's increasing immersion in the global automotive supply chain and repositioning itself as a hub for exporting cars from global manufacturers — on top of its already huge domestic market.

Sales are expected to rise to between 1.05 million and 1.1 million units this year, from an estimated 1 million units in 2015, the Indonesian Automotive Industry Association (Gaikindo) has predicted.

Japanese manufacturers Toyota, Honda, Suzuki and Nissan have all expanded production capacity in Indonesia. Saic General Motor Wuling — a joint venture between General Motors China, Shanghai-based SAIC Motor and Liuzhou-based Liuzhou Wuling Motors — is set to begin construction on its $397 million plant in Cikarang which will start production in 2017.

Japan's JFE Steel Starts Production in Indonesia | Jakarta Globe
 
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Pembangunan Masjid Menara TertinggiMenteri Agama Lukman Hakim Saifuddin (kiri) menyerahkan bantuan kepada Wakil Ketua Umum Pembangunan Masjid Agung Medan, Musa Idhishah (kanan) dalam rangkaian peletakan batu pertama, di Medan, Sumatera Utara, Jumat (15/1). Masjid Agung yang direncanakan selesai tahun 2018, dirancang memiliki menara masjid tertinggi di Asia yakni setinggi 199 meter. ANTARA FOTO/Irsan Mulyadi/pd/16


expect this Mosque will become a new historical landmark in Medan, North Sumatera
 
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PLN hemat Rp 1,5 T per tahun pakai kapal listrik terapung
[Power Ship helped PLN saved 1,5 T Rupiahs a year]


Reporter : Novita Intan Sari | Minggu, 17 Januari 2016


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Merdeka.com - PT Perusahaan Listrik Negara (PLN) telah mengoperasikan kapal pembangkit listrik atau Marine Vessel Power Plant (MVPP) Karadeniz Powership Zeynep Sultan yang disewa dari Turki. Kapal ini digunakan untuk keperluan pasokan listrik sementara di berbagai daerah.

Direktur Bisnis Regional Sumatera PLN, Amir Rosidin mengatakan ada beberapa daerah seperti Amurang, Belawan, Lombok, Kupang dan Ambon mengalami krisis listrik.

"Kita sekarang sewa lima lokasi di Gorontalo (ada kekurangan daya 5mega setiap hari, kondisi banyak daerah yang padam) Belawan, Kupang, Ambon, dan NTB. Memang kapal ini sifatnya temporary," ujar dia dalam diskusi Energi Kita yang digelar merdeka.com, RRI, IJTI, IKN, DML dan Sewatama di di Gedung Dewan Pers, Jakarta, Minggu (17/1).

Selain membantu daerah yang krisis listrik, pemanfaatan kapal pembangkit listrik ini juga membantu penghematan keuangan perseroan.

"Penghematan Rp 1,5 triliun per tahunnya, dari segi ekonomi teknikal," jelas dia.

Dia menambahkan, wilayah Indonesia yang merupakan kepulauan cocok untuk pembangkit listrik apung seperti ini. Kapal listrik ini nantinya memiliki kapasitas 120 megawatt (MW) dan merupakan genset terbesar yang ada di Inonesia.

Kapal ini sebagai solusi jangka pendek terhadap persoalan krisis listrik di berbagai daerah. Pengoperasian kapal listrik ini sebagai jembatan sebelum tuntasnya proyek listrik 35.000 MW.

PLN hemat Rp 1,5 T per tahun pakai kapal listrik terapung | merdeka.com

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Pemerintah mau buat kapal pembangkit batu bara agar listrik murah
[Govt plans a joint venture with Turkey to build Power Ship]


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Merdeka.com - Menteri Badan Usaha Milik Negara (BUMN) Rini Soemarno mengungkapkan pemerintah berencana membuat kapal pembangkit listrik batu bara. Kapal ini nantinya akan dibangun bersama perusahaan asal Turki melalui skema joint venture atau usaha patungan.

Menteri Rini mengungkapkan penggunaan batu bara lebih efisien dari sisi harga. Imbasnya, masyarakat terpencil menjadi tak terbebani soal dana untuk dapat merasakan listrik.

"Kalau sekarang pakai gas atau Heavy Fuel Oil (HFO), maka nanti bersama-sama akan mengembangkan untuk memakai batu bara juga. Kita melihatnya dengan batu bara akan lebih murah," kata Menteri Rini di Pelabuhan Tanjung Priok, Jakarta Utara, Selasa (8/12).

Dia menambahkan, nantinya batu bara tersebut akan memberikan pasokan listrik sekitar 40-60 MW. Namun, rencana ini masih dalam kalkulasi, sehingga belum diketahui harga dari listrik batu bara nantinya.

Dalam kesempatan yang sama, Direktur Utama PT Perusahaan Listrik Negara (PLN) Sofyan Basir menjelaskan pengoperasian powership berbahan bakar Heavy Fuel Oil (HFO) dan gas ini bisa menghemat pengeluaran PLN sebesar Rp 350 miliar per tahun.

"Kita kan sewanya sebesar Rp 1850 per kilowatt-hour (KwH). Jadi di Amurang yang mengalami defisit 50-60 MW itu bisa menghemat Rp 350 miliar per tahun," jelas Sofyan.

Seperti yang diketahui, powership akan mensuplai listrik bervoltase tinggi dengan harga yang terjangkau. Di awal, pembangkit listriknya akan menggunakan minyak bakar (HFO), namun bisa juga dikonversi untuk mengonsumsi gas.

Sebelumnya, Presiden Joko Widodo berencana untuk memperbanyak kapal pembangkit listrik (Marine Vessel Power Plant) di Indonesia. Untuk itu, Indonesia akan bekerjasama dengan perusahaan listrik asal Turki, Karpowership dalam membangun pabrik powership di Indonesia.

"Dua minggu lalu saya sudah ketemu Presiden Erdogan dan tadi saya sudah bertemu dengan pemilik, saya sampaikan setelah lima ini berikutnya harus dibangun di Indonesia. Karena tujuan kami kapal seperti ini akan banyak sekali," kata Jokowi di Pelabuhan Tanjung Priok, Jakarta Utara.

Dia menambahkan, kerjasama atau joint venture ini nantinya akan dilakukan dengan Badan Usaha Milik Negara (BUMN) atau perusahaan swasta di Indonesia. Petinggi Karpowership, kata dia, juga sudah komitmen untuk membangun kapal dan pabrik di Indonesia.

Pemerintah mau buat kapal pembangkit batu bara agar listrik murah | merdeka.com
 
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Indonesia to be only country to view total solar eclipse

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A combination photo shows the various stages of a solar eclipse as viewed by ESA's Sun-watching Proba-2 minisatellite, using it's SWAP imager to capture the Moon passing in front of the Sun to a near-totality, in this handout image provided by the Royal Observatory of Belgium March 20, 2015. Photo: Reuters


By Hans Nicholas Jong

The Jakarta Post/ANN | Mon, Jan 18 2016

Parts of Indonesia will experience a total solar eclipse on March 9 this year, the first time since 1995. The next total solar eclipse to hit Indonesia will be in 2023.

The rare event will be consecutively visible in 11 provinces: Bengkulu, Jambi, South Sumatra, Bangka Belitung, West Kalimantan, South Kalimantan, Central Kalimantan, East Kalimantan, West Sulawesi, Central Sulawesi and North Maluku.

"This year, Indonesia will be the only area to see [the total solar eclipse]. The rest of the total solar eclipse will traverse the Pacific, heading toward Guam," National Institute of Aeronautics and Space (LAPAN) head Thomas Djamaludin told The Jakarta Post.

A solar eclipse occurs when the moon passes between the Earth and the Sun, totally or partly obscuring the image of the sun for a viewer on earth. A total solar eclipse occurs when the moon's apparent diameter is larger than the sun's, blocking all direct sunlight and turning day into darkness.

Indonesia last experienced a total solar eclipse in 1988, visible from Bangka Belitung and South Sumatra.

"This year's solar eclipse in South Sumatra and Bangka Belitung will be similar to the one in 1988. The difference this time is that it will turn toward the southern part of Kalimantan and pass Central Sulawesi, part of South Kalimantan, East Kalimantan, West Sulawesi and North Maluku," Thomas said.

The last time a total solar eclipse passed over the country was in 1995, lasting only two minutes and visible only from Sangihe, a small island in North Sulawesi.

Since independence, Indonesia has experienced 18 partial solar eclipses, nine total solar eclipses and six annular solar eclipses.

A partial solar eclipse occurs when the moon blocks only part of the sun's disk, while an annular solar eclipse occurs when the moon is too far away to completely cover the sun's disk, forming a ring of light.

Other parts of Indonesia will experience partial solar eclipse along with parts of Southeast Asia, such as Kuala Lumpur, Singapore, Manila and Bangkok, as well as northern and eastern Australia.

While the total solar eclipse will see more than 90 per cent of the sun covered, from Java 50 to 60 per cent will be covered.

The total solar eclipse will last for around three minutes in the eastern part of Indonesia starting from 9 a.m. local time, while the western part will experience eclipse for around two minutes at 7:30 a.m. local time.

The natural phenomenon is expected to attract domestic and foreign tourists. According to Central Sulawesi Tourism Agency head Siti Mardjanu, up to 3,000 tourists from 12 countries will visit the province to witness the total solar eclipse.

The total solar eclipse will also attract foreign researchers, with the US National Aeronautics and Space Administration (NASA) scheduled to join a team of researchers from LAPAN.

Four NASA researchers will observe the eclipse in Maba, Halmahera, North Maluku.

The Meteorology, Climatology and Geophysics Agency (BMKG), meanwhile, will begin studying the total solar eclipse one month before the event.

"We will study the magnitude of the change in magnetic field caused by the total solar eclipse. We will start monitoring one month before the eclipse, during the eclipse and one month after it," Jaya Murjaya from the BMKG told the Post on Thursday.

Indonesia to be only country to view total solar eclipse | Travel
 
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Free: Residents of apartment dwellers show the card, while going up the Trans-Jakarta bus, towers Cipinang Besar in Jakarta, yesterday. Occupants of rental flats receive free services Trans-Jakarta bus ride

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New Terminal: Aerial Kalibaru Port development projects or terminals in Kalibaru New Priok, North Jakarta, yesterday. PT Pelindo II declared the trial operation of container terminals 1 New Priok capable in the leaning-sized ships of 20,000 TEUs ready to be launched in late January 2016 and will be followed by full operation in July 2016.
 
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kabar terakhir 1500 karyawan sudah di phk. the end of oil boom age, Bye chevron...

Tue Jan 19, 2016 | 3:15 AM EST
Chevron says will not extend contract to operate Indonesia oil and gas block

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The logo of Chevron is shown on a monitor above the floor of the New York Stock Exchange in New York, December 30, 2015.

JAKARTA (Reuters) - Chevron will not extend its contract to operate the East Kalimantan oil and gas block in Indonesia, the U.S. energy giant said on Tuesday, as plunging crude prices hit producers around the world.

The decision is the latest in a string of production curbs and asset cuts by oil and gas companies in Indonesia, reeling from crude prices that plummeted to a 13-year low on Monday.

Last month, Chevron, Indonesia's top crude producer, also revealed plans to sell its stake in a key oil and gas block in the country, the South Natuna Sea Block B.

"(Chevron) will not propose to extend the East Kalimantan production-sharing contract," Chevron IndoAsia Business Unit managing director Chuck Taylor said in an emailed statement.

He added that the company would return the assets to the government in October 2018 and that the decision would not affect Chevron's "pursuit of strategic projects" such as a deepwater natural gas development in Indonesia.

The East Kalimantan block currently supplies up to 70 million standard cubic feet per day (mmscfd) of gas to Indonesia's Bontang liquefied natural gas plant and 20,000 barrels of crude per day to the Balikpapan refinery, a company spokesman told Reuters.

Elan Biantoro, a spokesman for Indonesia's upstream oil and gas regulator (SKKMigas), said the government was aware of Chevron's decision to relinquish the East Kalimantan block. The government is reviewing whether to tender the block again or to hand it to state-owned energy giant, Pertamina [PERTM.UL], Biantoro said.

Chevron has operated the East Kalimantan block for nearly 50 years, and its output had "thinned", Biantoro said.

"They were also worried about what happened in the Mahakam block," he said, referring to Chevron's reason for the decision.

Risks energy investors face in Indonesia have been highlighted by a more than seven-year tussle over the future of the country's Mahakam block, its top gas-producing field currently operated by Total, as nationalistic elements are pushing for energy assets to be handed to Pertamina.

Last year, majors ExxonMobil and BP both handed back exploration blocks to Indonesia, while Swedish independent Lundin Petroleum said it was exiting the country.

According to SKKMigas, Indonesia's oil and gas companies are targeting a 2-percent decline in average daily output to 1.944 million barrels of oil equivalent per day (boepd) in 2016, from around 1.981 boepd in 2015.

Oil futures remained under pressure on Tuesday following a slide that has seen prices fall by more than a quarter since the beginning of the year, as the full return of Iran to oil markets adds to an already huge supply overhang. [O/R]


(Reporting by Fergus Jensen; Additional reporting by Wilda Asmarini; Editing by Joseph Radford)

Chevron says will not extend contract to operate Indonesia oil and gas block| Reuters

Indonesia's Economy to Pick Up Pace After Bottoming Out in 2015: World Bank

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Jakarta. The World Bank is predicting faster economic growth for Indonesia this year, confident that the nation's slowdown likely bottomed out in 2015.

In its January 2016 "Global Economic Prospects" report, the multilateral lender sees Indonesia's growth accelerating to 5.2 percent on average in the 2016-18 period after dropping to its lowest rate of 4.7 percent last year.

"This assumes implementation of a reform package announced by the government in September-October 2015 to unlock investment and boost productivity growth," the report said.

President Joko Widodo's administration released a series of economic packages last year in a bid to prop up a domestic economy that was being challenged by weaker exports, slower consumer purchasing power and a weakening currency.

The World Bank's optimism echoed similar sentiments from Bank Indonesia, which forecast economic growth to rebound this year at 5.2 percent-5.6 percent from a 4.7 percent-4.8 percent forecast for 2015.

However, the World Bank's report also noted that expected weak commodity prices for this year may require Indonesia to strengthen its fiscal institutions as well as broad its trade products.

"Weaker commodity prices would exacerbate the impact on commodity exporters" like Indonesia, Malaysia and Mongolia, the report said.

"On the revenue side, there is a need to broaden tax bases" for countries like Indonesia, Malaysia, Philippines, to "reduce reliance on commodity-related revenues."

The report also said commodity producers like Indonesia need to "enhance fiscal institutions to improve the management of fluctuations in natural-resource prices" to anticipate the decline in commodity prices.

Global growth

According to the report, weak growth among major emerging markets will likely continue weighing on global economic growth in 2016, but it said "economic activity should still pick up modestly to a 2.9 percent pace, from a 2.4 percent growth in 2015, as advanced economies gain speed."

"A slowdown in major emerging markets would dampen regional growth through strong trade linkages and increasingly through financial market integration. Econometric estimates indicate that spillovers could be sizable, with a one-off [but persistent] unexpected 1 percentage point decline in China’s growth lowering growth in the rest of Asia by 0.5-1.4 percentage points after two years," it said.

The World Bank said growth in China, the world's most populous nation, is forecast to retreat to 6.7 percent in 2016 from an estimated 6.9 percent in 2015.

Indonesia's Economy to Pick Up Pace After Bottoming Out in 2015: World Bank | Jakarta Globe
 
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All Merah Putih bridge's segments were finally connected yesterday.
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Walaupun perekonomian tiongkok melemah, neraca dagang RI tetap keok menghadapi "Negeri Tirai Bambu".

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LTE NETWORK EXPANSION: XL's technician are doing maintenance on 4G device base stations in the city of Mataram, yesterday. Oredoo Indosat and XL Axiata cooperating on 4G LTE network through Multioperator Radio Access Network (MORAN). Both operators will use the same LTE network in some cities such as Banyumas, Surakarta, Batam, Banjarmasin, and plans to expand this cooperation to other cities to support the digital economy agenda in Indonesia.
 
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