Indonesia Economy Forum

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Asahimas Chemical to triple
exports this year
The Jakarta Post, CILEGON/BANTEN | Business | Sat, February 13 2016, 5:15 PM




PT Asahimas Chemical, a subsidiary of the Japan-based Asahi Glass Company (AGC), expects to more than triple its industrial chemical exports following the opening of a new factory in its industrial complex in Cilegon, Banten.

With the operation of the new plant, exports were projected to increase to US$400 million this year from $120 million last year, Takuya Shimamura of Asahimas said during the inauguration of the new factory on Friday.

“We built the new factory to meet rising demand from the local and international market,” he said.

Asahimas exports its industrial chemical products to several countries, including Australia, Singapore, Malaysia, Vietnam, Saudi Arabia and Turkey.

The company’s industrial expansion and infrastructure development inside and outside the country has increased demand for caustic soda, mixture for pulp, paper, textile fiber; vinyl chloride monomer (VCM), raw material for PVC; and polyvinyl chloride (PVC), used to make pipes, cables and synthetic skin.

The new factory increases the annual production capacity for caustic soda from 500,000 to 700,000 dry tons; VCM from 400,000 to 800,000 tons; and PVC from 300,000 to 550,000 tons.

Asahima’s local sales reached between $280 million and $380 million last year, higher than its exports, which were worth $120 million during the same year, Takuya said.

“If demand rises again, we may build another site in East Java as the area here is already full,” he said.

The firm, established in 1986, has 91 hectares of land in Cilegon, covering 50 ha of its existing factory, 20 ha of the new factory and 20 ha of a planned coal-fired power plant (PLTU) aiming for operation in 2018.

The 2 × 150 megawatt (MW) power plant will provide the firm’s electricity needs and help the state achieve its goal of having new 35,000 MW by 2019.

The area is also connected to a small port in the Java Sea, where the company receives and sends materials. This makes it the biggest integrated chemical production site in Southeast Asia.

Coordinating Investment Board (BKPM) head Franky Sibarani said that Asahima’s investment was in line with the state’s focus on developing export-oriented industry that will help save its foreign currency.

“The expansion of Asahimas is very positive to increase local competitiveness, especially to reduce raw material imports and save foreign currency reserves by $97 million per year,” he said at the same event.

Investment for the new factory, which is worth $425 million, will help meet the country’s total investment target of Rp 595 trillion ($44 billion) this year.

Last year, realized investment totaled Rp 545.45 trillion, exceeding the Rp 519.5 trillion target.

The government aims to see Rp 3.5 quadrillion in investment during the period between 2015 and 2019.

To reach this, BKPM is providing various licensing services, such as the three-hour license issuance for big investors and “green-lane” acceleration to help companies constructing sites to settle import permits.

The latter program is handling 11 foreign companies with Rp 28.4 trillion in investment and seven local companies with Rp 5.6 trillion in investment.

All run in various sectors, such as agriculture, basic metal, metal, minerals, machinery and electronics, mining, rubber, plastics, electricity, gas, water, transportation, food, chemical and pharmacy. (rbk)

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- See more at: Asahimas Chemical to triple exports this year | The Jakarta Post

 

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Economy in brief: INKA
gets loan to export railway cars
The Jakarta Post, Jakarta | Business | Fri, February 12 2016, 5:46 PM

The Indonesian Export Financing Agency (LPEI), also known as Indonesia Eximbank, has signed a loan agreement with state-owned train manufacturer Industri Kereta Api (INKA) to export railway cars to Bangladesh. The state-run financing firm was appointed by the government to provide working capital loans worth Rp 270 billion (US$20.1 million) to INKA, which will use the funds to finance the shipment of railway cars to the South Asian country.

The appointment was made through a National Interest Account (NIA), which is a government policy to push penetration to non-traditional export destinations that, despite being commercially non-viable, may help boost shipments.

“The export financing uses NIA as shipments to non-traditional markets are deemed as less feasible and riskier,” Indonesia Eximbank executive director Ngalim Sawega said in a statement on Wednesday.

Ngalim said the agency had prepared a total pipeline of Rp 300 billion to support INKA for the project until Dec. 31 this year.

Indonesia’s total exports declined by 14.62 percent year-on-year to $150.25 billion last year and its imports plunged by 19.9 percent to $142.74 billion, leaving it to it book a trade surplus of $7.51 billion in 2015, data from the Central Statistics Agency (BPS) show. - See more at: Economy in brief: INKA gets loan to export railway cars | The Jakarta Post

New committee to provide
second opinion on industrialization
in Indonesia
Ayomi Amindoni, thejakartapost.com, Jakarta | Business | Thu, February 11 2016, 10:30 AM

In good spirits: National Economic and Industry Committee (KEIN) members have their picture taken after their inauguration by President Joko “Jokowi” Widodo at the State Palace in January. The committee will compose a re-industrialization roadmap as part of its analysis of the government's plan to boost domestic manufacturing. (Tempo)

The newly-established National Economic and Industry Committee (KEIN) will compose a re-industrialization roadmap as part of its analysis of the government's plan to boost domestic manufacturing.

KEIN deputy chairman Arif Budimanta said the roadmap would highlight five main things, namely job creation, poverty reduction, narrowing the gap between the rich and the poor, inflation control and maintaining high economic growth.

"This is why the roadmap is very important as an aggregation, the result of the entire existing roadmaps in all ministries. It is like a second opinion," Arif said in a press conference after the committee’s first meeting with President Joko "Jokowi" Widodo at the State Palace in Jakarta on Wednesday.

The Indonesian Democratic Party of Struggle (PDI-P) further said that the roadmap was scheduled to be completed in the first quarter of 2016. It would regulate the future of all levels of Indonesian industry.

Arif said the re-industrialization plan was aimed at minimizing imports, including the import of staple foods that could trigger inflation. In the agricultural sector, industrialization would be used as a tool of price control and as a substitution for the import of goods. "So, we hope that the volatility of our exchange rate can be decreased," he said.

KEIN secretary Putri K.Wardhani said the committee’s work would not overlap with the work of the Cabinet. "Although each ministry has its own roadmap, the President has urged us to give input to support the growth of national industry," she said.

Putri said the committee would create a crisis center where the businesspeople could receive advice. Meanwhile, industry players could discuss the obstacles faced by national industry.

Pramono said the main function of the committee, established last month, was to give the government creative advice on infrastructure development and deregulation.

Chaired by businessman and National Mandate Party (PAN) advisory council chairman Soetrisno Bachir, KEIN comprises 20 businesspeople and economists assigned to provide feedback to Jokowi on matters relating to the economy.

The committee includes Arif, a former member of Jokowi’s economic team during his 2014 presidential campaign, Hariyadi Sukamdani, chairman of the Indonesian Employers Association (Apindo), businessman Sudhamek AWS and economist Hendri Saparini. The committee replaces the National Economic Committee (KEN). (ebf)(+) - See more at: New committee to provide second opinion on industrialization in Indonesia | The Jakarta Post

 

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Indonesian PT LEN and Anliantec Taiwan cooperate to develop renewable energy sources, mainly solar cell and Independent Power Producer units.

LEN dan Anliantec Taiwan kembangkan energi terbarukan
Sabtu, 13 Februari 2016 17:49 WIB | 3.876 Views
Pewarta: Syarif Abdullah

Dokumen foto pekerja menyelesaikan produksi panel surya di pabrik produksi PT LEN Industri, Bandung, Jawa Barat. (ANTARA/Novrian Arbi)

Kesepakatan ini untuk pengembangan energi terbarukan, terutama energi surya."

Bandung (ANTARA News) - PT Len Industri (Persero) bersama Anliantec Technology Company Ltd. Taiwan bekerja sama permodalan dan proyek pengembangan energi terbarukan (renewable energy).

"Kera sama itu meliputi pengembangan, pembangunan, investasi, keuangan dan fasilitas manufaktur produk tenaga surya dan proyek IPP (Independent Power Producer) di Indonesia," kata Manager Komunikasi PT Len Industri (Persero), Donny Gunawan, di Bandung, Sabtu.

Penandatanganan kerja sama dengan perusahaan Taiwan itu dilakukan Direktur Teknologi & Produkse Len, Darman Mappangaran dan General Manager Analiatec, Cedric Jaeg, di sela-sela Bali Clean Energy Forum (BCEF) 2016, Rabu (11/2).

Ia mengemukakan, Len Industri juga bekerja sama dengan Badan Pengkajian dan Penerapan Teknologi (BPPT), PT Medco, Universitas Gajah Mada (UGM) dan Pemerintah Daerah Istimewa (DI) Yogyakarta. Bentuk kerjasama tersebut dalam hal pengembangan Pembangkit Listrik Tenaga Surya (PLTS) dan Teknologi Energi Surya.

"Kesepakatan ini untuk pengembangan energi terbarukan, terutama energi surya. Selain itu, juga menjadikan Yogyakarta sebagai Center of Excellence (COE) PLTS melalui fasilitas dan kebijakan pemerintah," kata Donny.

Selain itu, PT Len Industri hari ini juga menjalin kerja sama dengan Pemerintah Kabupaten Sumba Barat tentang Investasi Infrastruktur Pembangkit Listrik Tenaga Surya di wilayah Nusa Tenggara Timur (NTT) itu.

Penandatanganan dilakukan oleh Bupati Sumba Barat, Paulus Sekayu Karugu Limu, dan Direktur Utama Len, Abraham Mose.

Kerjasama dengan pemkab itu meliputi survei lokasi, pengumpulan data, studi kelayakan, membuat Detail Engineering Design (DED) dan menyusun Rencana Anggaran Biaya (RAB) sebelum membangun infrastruktur Pembangkit Listrik Tenaga Surya di Kabupaten Sumba Barat.

Editor: Priyambodo RH

COPYRIGHT © ANTARA 2016

LEN dan Anliantec Taiwan kembangkan energi terbarukan - ANTARA News

 

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e-money transactions reach Rp5.2 trillion: Bank Indonesia
Sabtu, 13 Februari 2016 20:11 WIB | 680 Views

Agus Martowardojo. (ANTARA/Puspa Perwitasari)

Kupang (ANTARA News) - Electronic money (e-money) transactions conducted in the country in 2015 reached Rp5.2 trillion in value, up from Rp4.3 trillion in 2014, Governor of Bank Indonesia(BI) Agus Martowardojo said.

"In 2009, electronic money transactions were valued at about Rp520 billion only, and now they have reached Rp5.2 trillion," the central bank governor said while opening the National Non-Cash Movement (GNNT) in Kupang, the provincial capital of East Nusa Tanggara (NTT) here on Saturday.

Agus said the non-cash transaction system, either using prepaid cards, credit cards or electronic money, is very useful because it makes the financial system more efficient.

With non-cash transactions, the state could reduce the use of banknotes and coins, making transactions more efficient and saving money on printing currency.

"We are convinced that the non-cash system would be safer, more practical and more efficient," Agus said.

After all, the non-cash payment system can be used widely, such as while purchasing cellular phone minutes, shopping at malls or paying electricity and tap water bills.

He said the e-commerce and non-cash transactions are predicted to continue to increase.

"Non-cash payments could also be for online-transactions, resulting in efficient usage of time and economizing," he added.
(Uu.A014/INE/KR-BSR/A014)

e-money transactions reach Rp5.2 trillion: Bank Indonesia - ANTARA News

 

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Social gap alarming: VP Kalla
Sabtu, 13 Februari 2016 15:39 WIB | 860 Views

Vice President M. Jusuf Kalla. (ANTARA/R. Rekotomo)

Jakarta (ANTARA News) - Vice President M. Jusuf Kalla has said that the social gap among communities in Indonesia has reached such an alarming level that the government must pay attention to it.

"In general, the nation is facing a gap which has become a yellow light for all of us. Meaning, it should be corrected," the Vice President said when opening the Indonesian Property Expo at the Jakarta Convention Center, Saturday.

In urban areas, the social gap is widening, while in rural areas it is narrowing, he added.

One of the indicators of the social gap in cities is property ownership.

"In rural areas, it (the gap) is not too visible, as everyone has almost similar houses. But in cities like Jakarta, poverty is in fact visible," he said.

The property disparity is seen in certain areas of Jakarta where luxurious houses are located, while in river banks, there are people living in crowded slum areas, he added.

The state-owned bank BTN, the National Housing Company (Perumnas), and private property developers could provide adequate houses for the community, he hoped.

"There will be a government regulation regarding this for a wise and proper implementation. The government wants to see a balanced and even growth," he said.

The government will improve policies and economy to curb the social gap, he said.

"A grave social gap in public housing is happening. It should be corrected, or otherwise it will create serious social problems to this nation," Kalla stated.
(T.F013/Uu.F001/INE/KR-BSR)

Social gap alarming: VP Kalla - ANTARA News

 

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Indonesian entrepreneurs to discuss investment with Japan
Jumat, 12 Februari 2016 21:42 WIB | 1.611 Views

Jakarta (ANTARA News) - The Indonesian Young Entrepreneurs Association (Hipmi) representatives will be going to Japan on February 12 to 16 to discuss investment, trade and development of small and medium enterprises.

"We will explore many issues and opportunities in Japan. These include domestic investment, as well as trade between the two countries through the development of small and medium enterprises," chairman of Hipmi, Bahlil Lahadalia, said here on Friday.

He said Hipmi will meet Japanese businessmen and global corporations who are members of the Chamber of Commerce and Industry of Japan and Toyota Company.

We will convince them that Japan remains a strategic partner for Indonesian entrepreneurs. Major Japanese companies should not go out of Indonesia, they can even improve investment in Indonesia," Lahadalia said.

According to him, the investment climate in Indonesia is improving with the launch of economic packages and the construction of a massive infrastructure in a number of areas.

In Japan, Hipmi will also conduct a comparative study on the development of small and medium enterprises in some places to learn about the industry ecosystem in Japan.

Earlier, President Joko Widodo had asserted that micro, small and medium enterprises need to get a facility for capital, including low interest loans.

The Financial Services Authority (OJK) said that all the micro, small, and medium enterprises in Indonesia must have financial knowledge in order to grow their business.

(KR-LWA)
EDITED BY INE/H-YH
(T.SYS/B/KR-BSR/B/H-YH)

Indonesian entrepreneurs to discuss investment with Japan - ANTARA News

 

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Doubletrack in Northern Java Railway line, connecting Jakarta-Surabaya City

Doubletrack railway lines development is in progress in Sulawesi

Indonesia currently had over 5000 km of railway lines, with more than 2600 km on progress and soon to be added to the existing of railway system. In the past, Indonesia had more than 7000 km of railway and tramway network operating across the archipelago, mainly in Sumatra, Java and some in Kalimantan. But the closure of tramway system during Soekarno era had reduce more than 2000 km of rail lines.

 

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Indorama Opens 9th Textile Plant in Indonesia

Jakarta. A $40 million spinning mill facility in Purwakarta, West Java, that is owned by Indorama Synthetics, Indonesia’s biggest producer of textile raw materials, was inaugurated on Wednesday (10/2), the country’s Investment Coordinating Board (BKPM) said in a statement.

“Indorama’s expansion can support the government’s plan to reduce unemployment and improve the locals’ income in Purwakarta district, while also improving foreign exchange earnings from exports,” Franky Sibarani, BKPM chairman, said in a statement.

Franky was there to witness the inauguration, the statement said.

The Purwakarta mill is Indorama’s ninth plant in the archipelago nation, Franky said.

The plant, which has a capacity to produce 10,800 metric tons of textile raw material per annum, is situated on a 50-hectare plot land that has been owned by Indorama since 1997.

Franky said the plant will provide 270 new jobs.

According to the company’s website, Indorama Synthetics – controlled by Indian-born businessman Sri Prakash Lohia – has been listed on the Indonesia Stock Exchange since 1990.

New investment in the textile and textile products industry last year stood at Rp 8.3 trillion, up 35.7 percent compared to a year earlier.

New local investment in the sector was recorded at Rp 2.7 trillion while foreign investment contributed Rp 5.4 trillion, BKPM said.

Business | Jakarta Globe

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Indonesians Trust Business More Than the Government, Survey Finds

Jakarta. Indonesians trust businesses more than the government, media or other nongovernmental organizations to cope with the changing conditions in society, technology and the economy, according to a recent study published on Tuesday (2/2).

The 2016 Edelman Trust Barometer — which is based on a survey to more than 33,000 respondents across 28 countries between Oct. 13 and Nov. 16, 2015 — found that Indonesian respondents' trust in businesses remains at 71 percent.

On the other hand, only 58 percent of Indonesian respondents trust the government. That compared to the previous 65 percent post-election high. Sixty-three percent respondents trust the media and 57 percent trust the NGOs. That compared to the previous 68 percent and 64 percent trust in media and NGOs respectively a year earlier.

"This year’s results for Indonesia show that Indonesians have high expectations for business, despite an overall decrease in trust across institutions," Raymond Siva, Edelman Indonesia chief executive officer, said in a statement.

“There is also a high expectation for business leaders to play a greater role in solving societal issues and challenges. The message is clear – Indonesians want business to lead in tackling societal challenges and drive Indonesia through these turbulent and uncertain times," he said.

According to the report, Indonesians want their chief executivess to "exhibit highly ethical behaviors" and "behave in a way that is transparent and open." They also want the business leaders to dedicate their professional lives to "protect and improve" the environment.

"Especially in the wake of last year’s haze disaster," Siva said

Globally, 80 percent of the respondents agreed that business must take the lead to solve problems. The report said a company can take specific actions to both increase their profits and improve the social-economic scene surrounding it.

In Indonesia specifically, the respondents want companies to help reduce poverty. That compared to the respondents in Malaysia and Singapore who want companies to improve access to education or training

Business | Jakarta Globe

this news is kinda suspicious for me, i am remember 1MDB but anyway it's good for many Indonesian

@pr1v4t33r @MarveL @Jakartans@PkDef @anas_nurhafidz

Malaysia's Felda to Re-Attempt Indonesian Deal with Unlisted Unit: Sources

Jakarta. Malaysian state-owned conglomerate Felda will use an unlisted unit to buy into Indonesian tycoon Peter Sondakh's debt-burdened Rajawali Group, sources familiar with the matter said, seeking to avoid heavy investor criticism that scuttled an attempted deal last year.

Plans for Felda to buy 37 percent of palm oil plantation firm Eagle High Plantations collapsed last year after politicians and investors blasted a $680 million deal as an expensive favor for Sondakh, who has long-standing ties with Malaysian Prime Minister Najib Razak.

Both Najib and Sondakh have said that the deal was commercially driven.

This time, instead of using its main listed entity, Felda Global Ventures Holdings, the world's third-largest palm plantation operator, Felda will use an unlisted unit to acquire the stake. It is also seeking to cut the price by as much as 30 percent, the sources said.

The sources declined to be identified as they were not authorised to talk about the matter.

"The deal is still very much alive with [a] good discount," said one person close to the Malaysian government.

Getting a deal done will help ease debt woes for Sondakh, who like other tycoons in the country has been hit hard by the commodities rout and a slide in the rupiah.

Sondakh and Eagle High declined to comment.

Rajawali Group said the transaction with Felda was "being finalized" but declined to give details or comment on the group's debt levels.

Felda Global Ventures declined to comment. Felda Group and unlisted unit Felda Investment Corporation — which the sources said was likely to be the one acquiring the stake — did not respond to requests for comment.

Najib's office also did not respond to requests for comment.

High multiples

Under the rejigged terms, Felda Group could rework the offer to include debt that would be exchangeable into shares in another company controlled by Sondakh, the sources said.

Several sources said they expected the deal would close next month, though one said the situation was "still fluid".

Felda and Rajawali have touted the commercial logic of marrying Felda's palm oil processing capabilities with Eagle High's plantations, with Felda arguing that it was difficult for it to acquire more landbank in Malaysia.

But the original deal proposal proved too expensive for investor comfort levels.

The proposed acquisition implied a price of Rp 775 per share or 63 times estimated net profit for 2015, significantly above Eagle High's rivals, said CIMB Research analyst Ivy Ng. Its rivals trade at between 14 and 55 times earnings, according to Thomson Reuters data.

Sondakh's Rajawali Group, which can trace its roots to a modest coconut oil and timber business, has become a sprawling empire spanning mining to property and he is known for his strong political connections.

One of his first partners was Bambang Trihatmodjo, a son of Indonesia's former president Suharto. Together, they built the Grand Hyatt hotel in Jakarta and Indonesia's first privately owned television network, Rajawali Citra Televisi Indonesia.

But last year, Sondakh's worth fell by around $400 million from a year earlier to $1.9 billion, pushing him out of rankings of Indonesia's top 10 richest, according to Forbes business magazine.

In addition to Eagle High, he has been trying to sell stakes in Nusantara Infrastructure, taxi operator Express Transindo Utama and gold miner Archi Indonesia.

Reuters


Business | Jakarta Globe

 

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Economy in brief: Pelni
to buy cruise ship
The Jakarta Post, Jakarta | Business | Fri, February 12 2016, 5:49 PM

PT Pelni plans to buy one cruise ship this year as part of its participation in the government’s marine tourism campaign.

“We will be buying a cruise ship with the capacity to carry 300 passengers,” Pelni president director Elfien Goentoro said on the sidelines of the Marine and Fisheries Business and Investment Forum at the Maritime Affairs and Fisheries Ministry on Thursday.

Pelni plans to serve routes to five tourist destinations: Derawan, Wakatobi, Labuan Bajo, Raja Ampat and Anambas.

It has allocated US$25 million for the purchase.

“At least 20 percent will be from our own money, while the rest will come from loans,” Elfien said. - See more at: Economy in brief: Pelni to buy cruise ship | The Jakarta Post

Govt raises micro loan
allocation
Grace D. Amianti and Tassia Sipahutar, The Jakarta Post, Jakarta | Business | Sat, February 13 2016, 5:15 PM


The government has decided to increase the target for its subsidized micro loan program from the initial allocation set earlier this year despite failing to meet its target last year.

The government announced on Thursday that the target for the micro loan program, dubbed People’s Business Credit (KUR), had been increased slightly to Rp 103.2 trillion (US$7.69 billion) from the Rp 100 trillion set in January, saying it was now preparing new participants to take part in the scheme.

Coordinating Economic Minister Darmin Nasution said the meeting had approved the target, which was agreed by 19 banks that would participate in the program this year, far higher than the number involved in 2015.

The decision to increase the target was taken during a coordination meeting held at the Coordinating Economic Ministry’s headquarters attended by ministers and officials of state agencies as well as executives of state-owned banks.

He said the ministry was also expecting that the Financial Services Authority (OJK) would soon complete its ongoing review of four multifinance firms that were deemed as prospective candidates to join the KUR program.

The four multifinance firms are BCA Finance, Adira Finance, Mega Central Finance and Federal International Finance, which are expected to disburse at least Rp 1.5 trillion of KUR loans this year.

“Apart from those four companies, there are several other multifinance firms who have already submitted their proposals to the OJK and are still under review,” Darmin said.

Darmin said the government had also added seven guarantor companies to provide insurance for the program, namely Jamkrindo, Jamkrindo Syariah and Askrindo as well as guarantors owned by the regional governments of Riau, Bangka Belitung (Riau Islands), South Sumatra and Central Java.

In 2015, three state-owned lenders — Bank Rakyat Indonesia (BRI), Bank Mandiri and Bank Negara Indonesia (BNI) — participated in the KUR program, along with one private lender, Bank Sinarmas, which played a relatively small role, mainly offering loans to Indonesian migrant workers (TKI).

As of Dec. 31, 2015 total loans disbursed by the KUR program reached Rp 21.4 trillion to 960,424 customers, lower than the Rp 30 trillion targeted.

According to the Coordinating Economic Ministry’s data, the three state-owned lenders had continued to disburse Rp 6.48 trillion of KUR loans to more than 290,000 customers between Jan. 1 and Feb. 5 this year.

In order to achieve the 2016 nationwide KUR target, the government has allowed more banks, including privately owned and regional development banks, to join the program, with certain requirements in terms of financial situation and business portfolios.

OJK chairman Muliaman D. Hadad said at least 70 percent of the total allocated amount would be disbursed by three state-owned lenders — BRI, Bank Mandiri and BNI — while the rest would go to other participants.

With more participants in the program, Muliaman said the financial regulator was intensively reviewing the candidates, including studying its plan to involve rural banks to act as channeling agents for some banks.

“We’ve also paid special attention to seven regional development banks involved in the program in order to ensure their readiness,” he said.

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- See more at: Govt raises micro loan allocation | The Jakarta Post

 

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Good or Bad? Observers React as Indonesia Eases FDI Restrictions

Jakarta. Indonesia's move to ease foreign investment restrictions as part of its economic liberalization drive drew a mixed response from economists and members of the local business community.

The country on Thursday (12/o2) revised its so-called negative investment list, locally known as DNI, to allow greater foreign ownership across a variety of sectors.

The DNI had been used as a regulatory barrier to protect local players against overseas-controlled companies.

In an interview with Reuters on Wednesday, President Joko Widodo said he considered the economic liberalization move, part of the 10th economic stimulus package his administration announced, as a "big bang."

"Overall, I see this plan as positive," Eric Alexander Sugandi, an economist with the Jakarta-based think tank Kenta Institute, told the Jakarta Globe.

Still, he said such revisions might not immediately attract investors as the list revision will only be one of the factors investors take into consideration before pouring money into a country like Indonesia.

According to Eric, foreign investors also take into consideration demand, the stability of the rupiah, certainty in local business regulations — which includes possible legal disputes and workforce problems — and the availability of decent infrastructure.

Takehiko Nakao, president of the Asian Development Bank, in a statement on Friday welcomed the move that will open 35 previously closed sectors to foreign investment and allow greater foreign ownership in many more sectors.

From the pharmaceutical sector, industry players said the liberalization is expected to help reduce the exposure of drug makers in the country to currency fluctuations.

"If the raw materials are manufactured locally, the transactions would be in rupiah. That means our exposure to forex will be reduced," Vidjongtius, a director at Kalbe Farma, told Reuters.

Sandiaga S. Uno, a deputy chairman at the Indonesian Chamber of Commerce and Industry (Kadin), applauded the package, but noted that the government must continue to put the nation's interest first, increase job opportunities and reduce the costs companies incur due to inefficiencies in infrastructure and services.

The part Sandiaga said he most appreciated was the liberalization of the film industry, which he said was the most ready of all sectors to be opened 100 percent to foreign investors.

"There has been an anomaly all this time, even though the number of movies produced [by local producers] increased ... the number of viewers declined by 32 percent," he said, citing the clear need for local film industry to be aided by foreign partners.

SME protection

But not all sectors are now open to foreign investors.

As part of the DNI revision, the government has set strict requirements for foreigners looking to enter 19 sectors where changes will strongly affect local micro, small and medium enterprises as well as local cooperatives.

The sectors include construction consultation services, such as pre-design, contract administration services, design services by architects and other architecture-related services.

"It's right for the government not to open these 19 and another 39 sectors related to the small and medium enterprises for foreign investment, because these sectors employ a large amount of workers and there will be a huge impact in terms of unemployment if these close down," said Eric of the Kenta Institute.

Eric was previously an economist with Standard Chartered Bank in Indonesia.

Too soon?

The economic liberalization drive initiated by Joko's administration could be coming too soon, some say.

Hariyadi Sukamdani, chairman of the Indonesian Employers Association (Apindo), said liberalization is "not a problem," but only when Indonesia is ready.

He said he doubted that all sectors now being opened up for foreign investment, especially in the manufacturing industry, were ready for liberalization.

Hariyadi, the president director of Hotel Sahid Jaya International, one of the first local hotel chains in Indonesia, said he regretted the government did not listen to the business community.

"We only want fair play, but it has been decided anyway," he told Investor Daily, a sister publication of the Jakarta Globe.

Adrianto Djokosoetono, chairman of the Land Transportation Owners Organization (Organda), said he did not support the government's decision to open the door for up to 49 percent foreign ownership in his sector — for the first time in Indonesian history.

“We have communicated with the BKPM [Investment Coordinating Board], but unfortunately our input has not been accommodated," said Adrianto, whose father Purnomo Prawiro owns Blue Bird Group, the country's biggest taxi company.

According to Adrianto, liberalization will hurt small companies in the land transportation business, which will not be able to compete with foreign investors.

Organda has about 1.5 million members and says on its website that affiliated businesses affect 15 million people in the land transportation industry, or related sectors such as automotive or travel.

'Likely to backfire'

Agus Tony Poputra, the chief economist at Bank Negara Indonesia’s Manado branch, in North Sulawesi, said he agreed Indonesia needs more foreign investment to stimulate the economy.

Still, Agus, who is also a lecturer at Sam Ratulangi University in Manado, said the move to liberalize so many sectors to foreign control is likely to backfire.

"Foreign investors will prefer to use imported raw materials, especially from their country of origin, which may lead to capital outflows and minimal value-added work," he said.

He also said he feared that foreign investors may just use Indonesia, the world's fourth-most populous nation, as a market, not a production base.

"There will be more money going out in the form of dividend, royalties," he said.

Agus also said foreign investors typically give higher paychecks to expatriates, even if they have the same position and do the same work as locals.

"Local workers are treated unjustly in terms of compensation and that money will go to the country of origin of the expatriates," he said.

Worst, he said, would be if foreign investors gain a more dominant position in Indonesia's economy and get a bigger say in issues such as the operations of Freeport Indonesia, the local unit of US mining giant Freeport McMoRan.

Additional reporting by Ridho Syukra, writing by Muhamad Al Azhari
Good or Bad? Observers React as Indonesia Eases FDI Restrictions | Jakarta Globe

BKPM, Social Affairs Ministry Team Up to Create Jobs for Human Trafficking Victims

Jakarta. Indonesia's Investment Coordinating Board (BKPM) is partnering with the Ministry of Social Affairs to help victims of human trafficking, troubled migrant workers and former commercial sex workers find jobs in the country’s manufacturing industry amid the government's goals to alleviate layoffs and revive the economy.

"The government has a job-creation program that aims to gain the maximum benefit from any investment coming into Indonesia, so we're working together with the social affairs ministry to fix this social problem by channeling the workers according to their skills, as well as in accordance with the needs of the companies," BKPM chairman Franky Sibarani said in a statement on Sunday.

"By partnering with the social affairs ministry, we hope to help human trafficking victims return to the formal employment pool in labor-intensive industries."

Franky said the investment board and the social affairs ministry are currently preparing a workshop program to prepare the potential workers for jobs in labor-intensive industries, notably in textile and shoe manufacturing.

According to Franky, Indonesia's manufacturing industry needs to fill as many as 184,777 vacancies by 2019 in investment projects that form part of job-creation programs in West Java, Central Java, East Java, Bali, Nusa Tenggara, Maluku and Papua. The BKPM has set itself a target to create two million jobs this year, up 43 percent from last year.

Human trafficking in Indonesia is estimated to generate nearly Rp 563 trillion ($41.7 billion) annually, social affairs ministry data shows, with the bulk of it in West Java, East Nusa Tenggara and West Nusa Tenggara.
BKPM, Social Affairs Ministry Team Up to Create Jobs for Human Trafficking Victims | Jakarta Globe

 

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Cement Sales Pick Up in January as Govt Spends Early

Jakarta. Domestic cement sales in January grew 4.4 percent to 5.14 million metric tons compared to the same month last year, on the back of high demand from infrastructure projects across Indonesia.

"This shows that the government is able to start construction of housing and infrastructure early in the year. In addition, construction of power plants, smelters and other projects helped boost sales of cement,"said chairman of the Indonesian Cement Association (ASI) Widodo Santoso on Wednesday (10/02).

The government spent Rp 1.5 trillion ($112 million) in the first month of this year for infrastructure construction, up 15 times the spending in the same period a year ago, Finance Minister Bambang Brodjonegoro said early this week.

Widodo noted that the highest cement demand growth was in Sulawesi, which was up 19 percent to 424,000 metric tons last month.

Sumatra consumed 1.1 million metric tons of cement in January, a 16 percent rise compared to the same month a year ago.

Cement sales in Java rose 5.3 percent to 2.88 million metric tons. Meanwhile, in Bali and Nusa Tenggara, cement sales rose 1.6 percent to 320,000 tons.

Still, demand from Kalimantan, Maluku and Papua islands were down 31 percent and 13 percent respectively, due to weak commodity price in the regions that has weakened their purchasing power, while regional government projects are still delayed, he said.

However, Widodo remain optimistic that sales will pick up this year, with the government set to spent Rp 47 trillion for a public housing program.

"Hopefully, the government infrastructure projects will be realized properly, so that cement production in the country can be well absorbed, because the cement manufacturers have poured trillions of rupiah into factory construction," Widodo said.

Ciptadana Sekuritas estimates domestic cement sales to grow 9.8 percent this year to 66.4 million metric tons, driven by a surge in investment and increased economic growth. But, intense competition among cement makers, particularly in Java, the country largest cement market, would undermine the company's margin by 30-40 basis points.

Jakarta Globe | Your City, Your World, Your Indonesia | Jakarta Globe

BTN Eyes Rp 2t in Housing Mortgages From Property Expo 2016

Jakarta. State lender Bank Tabungan Negara, which focuses on housing mortgages, targets to disburse up to Rp 2 trillion ($148 million) in housing loans during its annual Property Expo 2016, a 25 percent increase from Rp 1.6 trillion last year, on the back of robust property demands across the country.

"The company is optimistic that we'll achieve that target because everyone is still looking for housing. The event, which will extend from February 13 to 21 is sure to catch the attention of homebuyers," Maryono, president director of BTN, said during the first day of Property Expo 2016 in Jakarta on Saturday.

The Property Expo 2016 gathers nearly 250 developers with over 650 residential projects — offering 230,000 homes in total — scattered around the Greater Jakarta region; Banten; Bandung, West Java; Yogyakarta and Semarang in Central Java and Surabaya, East Java.

Projects from outside of Java were also offered, including those from areas such as Bali Balikpapan and Samarinda in East Kalimantan, Kendari in Southeast Sulawesi and Medan, North Sumatra.

Potential homebuyers visiting the expo are treated with sweeteners, such as lower interest rates, shorter approval time and zero administrative fees.

Jakarta Globe | Your City, Your World, Your Indonesia | Jakarta Globe

 

[Nike]

President Jokowi to meet IT CEOs in US
Minggu, 14 Februari 2016 19:11 WIB | 606 Views

Jakarta (ANTARA News) - President Joko Widodo will meet with chief executive officers of US giant information technology companies during his visit to that country for a US-ASEAN Summit on February 15-16.

"I will take an opportunity to meet with IT CEOs," the President said at a press conference before departing for California at the VVIP Room of Jakartas Halim Perdanakusuma airport here on Sunday.

President Joko Widodo will also visit the Silicon Valley in San Fransisco and also with the Indonesian diaspora in San Fransisco whose number is quite big while in the US.

In the US-ASEAN Summit on February 15-16 Indonesia will raise the theme of cooperation for peace and welfare.

After the summit scheduled in Sunnylands, California, President Joko Widodo and delegation including First Lady Iriana will proceed to California where the President is scheduled to deliver a key speech at a US-ASEAN Business Council on February 17.

At the conference the President said both ASEAN and the US have the obligation to create regional as well as global peace and stability.

"The ASEAN-US partnership must bring equal benefit for the welfare of the people of ASEAN and the US," he said.

For the purpose he said Indonesia would encourage increased economic cooperation in the small and medium business sector, promotion of entrepreneurship and innovation as well as digital economic development.

With regard to peace he said "I will exchange ideas with nine other ASEAN leaders and the US leader regarding peace in the region."

President Joko Widodo is scheduled to lead a session on terrorism and "I will take this opportunity to share our experience as a country with the worlds biggest Moslem population in developing tolerance, preventing radicalism and fighting terrorism," he said.

He said Indonesia would also raise the importance of public participation including through social media in the counter- terrorism fight.

Seen in the presidential delegation were trade minister Thomas Lembong and presidential chief of staff Teten Masduki.

The President and delegation is scheduled to arrive home on February 19. (*)

President Jokowi to meet IT CEOs in US - ANTARA News

 

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Tol Denpasar-Buleleng Belah Bukit Bedugul, Kuta-Tanah Lot Hanya 20 Menit

 

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Indonesian bank opens branch in Seoul
Selasa, 16 Februari 2016 03:00 WIB | 493 Views


Jakarta (ANTARA News) - An Indonesian bank, Bank Negara Indonesia (BNI) 46, opened a branch office in Seoul, South Korea, in Wise Tower, on Monday.
It was inaugurated by the Ambassador of Indonesia to South Korea, John A Prasetio and Manager of BNI46 Seoul, Wan Andi Aryati.
"The banking industry in South Korea is already shaken, but BNI46 still sees market potential," Wan Andi said in a statement received by ANTARA here Monday.
The BNI46 targets the domestic trade market according to her.
"BNI Seoul wants to be a bridge to establish cooperation between Indonesia and South Korea by providing loans and other related banking services," Wan Andi said.
The BNI46 also provides services for South Korean businessmen who want to invest in Indonesia, she added.
"We are also targeting the Indonesian labor market in South Korea, which now reaches 40 thousand people. We are committed to providing the best service for the Indonesias foreign exchange heroes," she said.
Meanwhile, Ambassador Prasetio stated that the world economy is still in a state of collapse. The stock market and the value of currency in some countries against the US dollar continues to decline.
"This shows that the global sentiment has not been encouraging. Uniquely, the Indonesian economy is relatively solid in the middle of the uncertainty shocks," the ambassador said.
Cooperation in trade and investment between Indonesia and South Korea are still positive. The demand for Indonesian products and South Koreas investment in the country are progressive, according to him.
"They respond positively on the economic policies of President Jokowi (Joko Widodo). I believe that the presence of BNI46 in Korea is very important to bridge cooperation between the two countries," the ambassador said.
Data from the Investment Coordinating Board (BKPM) shows that South Koreas direct investment in the country in the last five years is ranked fourth with a value of more than US$7 billion.