Indonesia's Economy, Political, Social, and Science Development Thread

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As the news regarding Indonesia's economy, political (including international relationship), social, and science development are very much, it becomes irrelevant to discus it in ASEAN thread which is mainly a thread for ASEAN matters.

Therefore I create this separated thread to provide all in one thread for news and discussions regarding Indonesia's own development.

For a start;


Indonesia State Construction Sees 30% Growth In 2013 Net Profit
Achmad Aris, Arsyad Paripurna, Herdiyan, Ringkang Gumiwang
March 18, 2013 10:16

Kuala Namu Airport, Medan. New Airport that is expected to be in operation in Juli, 2013

JAKARTA: State-controlled construction companies’ net profit may grow around 30%-40% this year, as sustained by several government projects.

According to the Analyst of PT Pemeringkat Efek Indonesia (Pefindo) Ahmad Sujatmiko, the government’s Master Plan for the Acceleration and Expansion of Indonesia's Economic Development (MP3E) has brought positive impact to some sectors, particularly construction and cement industry.

“Construction sector will continue to grow this year. We estimated the net profit of this sector to grow around 30%-40%, as their performance is often sustained by government’s projects,” he said, Sunday (3/17).

Based on Pefindo’s data, the performance of two companies that had released their 2012 Financial Reports was in accordance with the estimation. These companies are PT Waskita Karya Tbk (WSKT) and PT Adhi Karya Tbk (ADHI). (msw)


Indonesia plans to compete with China economically in the Moroccan market

Said Minister of Tourism and Creative Economy Indonesian, Mari Elka Pangestu, if there is an improvement in relations Moroccan Indonesian economic level and tourism, adding that the cultural relations between the two countries rooted deeply since a long history, "but I aspire to live up this cooperation to the required level."


The interest of the Memorandum of Understanding, as Mary Bangiso, exchange of experiences, and encourage tour operators of the two countries on joint cooperation to promote the products of the two countries, as well as organizing expeditions for the benefit of investors and developers from the private sector.


Morocco - Indonesia Economy Talks

Indonesia plans to compete with China economically in the Moroccan market

Said Minister of Tourism and Creative Economy Indonesian, Mari Elka Pangestu, if there is an improvement in relations Moroccan Indonesian economic level and tourism, adding that the cultural relations between the two countries rooted deeply since a long history, "but I aspire to live up this cooperation to the required level."


The interest of the Memorandum of Understanding, as Mary Bangiso, exchange of experiences, and encourage tour operators of the two countries on joint cooperation to promote the products of the two countries, as well as organizing expeditions for the benefit of investors and developers from the private sector.


The Indonesian minister adds in the same dialogue that the talks with the Moroccan side also yielded agreement on the establishment of a direct air bridge "and prepare a major air stations to neighboring countries of the two countries."

she said that exports Indonesian towards Morocco almost 80 million dollars annually, and includes building materials and textiles, "which is about the same amount with respect to imports of Morocco, which mainly include phosphates," noting that her country is already planning to export electronic materials "to compete Products Chinese who suffer much upon the Moroccan market
http://hespress.com/economie/74610.html


Telkom and Len Industri Build e-Toll Pass Project
BY RIAN SANDI

The implementation of all in one electronic money in almost all public sector in Indonesia.

JAKARTA – PT Len Industri and PT Telekomunikasi Indonesia Tbk (TLKM) are partnering in on board unit (OBU) project for e-toll pass. OBU is a transmitter for electronic payment in toll roads and other transportation ecosystem in Indonesia.

The partnership is to reach a target of the implementation of 500,000 OBUs by this year. Abraham Mose, President Director of Len Industri, said that the company is ready to achieve the target.
http://en.indonesiafinancetoday.com/read/30597/Telkom-and-Len-Industri-Build-e-Toll-Pass-Project

 

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Asian brands focus on local fashion scene
Mariel Grazella, The Jakarta Post, Jakarta | Business | Mon, March 18 2013, 11:28 AM
A- A A+
Paper Edition | Page: 13




The country is becoming a preferential place for glossy Asian fashion and lifestyle brands seeking to showcase their merchandise.

Within a month, two large Japanese retailers, Fast Retailing Co. Ltd., the brand owner of UNIQLO, and AEON MALL Co. Ltd., have established their presence by setting up flagship stores here.

Two other big department stores from Indonesia’s immediate neighbors, Parkson Retail Asia, headquartered in Malaysia, and Thailand-based Central Retail Corporation (CRC), are already looking to open their first stores here next year.

AEON MALL CEO Soichi Okazaki said Indonesia’s rosy economy had drawn the retailer to the country this year.

“The GDP [gross domestic product] of Indonesia grown beyond 6 percent during the past years and this factor influenced our decision,” he said.

AEON has partnered with domestic property developer, PT Sinar Mas Land, to form PT AMSL Indonesia. AMSL will operate the flagship AEON MALL, worth $200 million in its initial investment.

The first AEON, located in BSD City — a residential estate owned by Sinar Mas — is scheduled for opening in 2014 while a second mall, to be located in Kota Deltamas, Bekasi, will open in 2015.

Okazaki added that AEON was eying suburban hubs, turning away from urban markets jam-packed with competition.

“We see the new, middle income family as a potential customer target,” he pointed out.

Residential areas have been a draw for Parkson Retail Asia as well, yet the retailer has opted for urban dwellers.

Datuk Alfred Cheng, group managing director of Parkson Retail Asia, said the company had picked the St. Moritz superblock, located in the Puri Indah, West Jakarta residential complex, as the location for the first Parkson department store, scheduled for opening in September 2014.

As with other retailers, Parkson is eyeing the affluent section of society.

“The Parkson store in Indonesia targets the upper-middle to upper income segment of the market,” he told The Jakarta Post.

He added that the retailer sought to introduce Parkson to other first tier cities, including Medan and Surabaya.

Parkson initially entered the domestic market with the Centro Department Store, which grew by 26 percent sales-wise between 2011 and 2012. The retailer, Cheng said, similarly planned to expand Centro, currently numbering nine, to at least 13 other cities.

“We expect the full year 2013 sales growth to be in the strong teens,” he added.

Yet, unlike other players, the Central Retail Corporation is heading straight into the urban heart by establishing a department store in the downtown Grand Indonesia Shopping Town, a mall located in the Thamrin business district in Central Jakarta.

Murali Menon, shopping mall director of Grand Indonesia, said that the mall expected Central to draw “Indonesian shoppers hungry for something new”.

He added the mall had decided to bring in Central at the request of shoppers who came across the brand during overseas trips.

Central, with their “points of differentiation”, also felt the time was right to compete in the Indonesian market, he said.

He added that Central — which will occupy a total floor space of 21,000 square-meters or 14 percent of leasable area of the east wing — would draw in shoppers once it opened in September 2014.

The mall averaged a million visitors per month in 2012, up by 3 percent on 2011.

“Central will introduce a whole new ball game in merchandising by stocking international, Thai and domestic brands,” he noted

Besides Central, the mall will house the flagship H&M store, set to open in March 2014.

Meanwhile, Cheng pointed out that the domestic market was “increasingly warming to Asian brands”, and Parkson too looked to carry a mix of international and Asian brands “depending on the demand and profile of our customers”.

“One of the advantages of Asian brands is that they are more skewed to local Asian lifestyle and sizing will be spot-on,” he said.

He added that “Asian brands are on a par with their international peers” in terms of quality.

Yasuhiro Hayashi, director for business development in Southeast Asia at UNIQLO, added that the brand’s focus has always been on creating outfits that were “made for all” regardless of “national borders and differences in ethnic groups or culture”.

He added the brand counted on its popularity in its home country to give it an edge over other brands that populated the domestic retail scene.

“We believe that trust toward Japanese products, combined with UNIQLO’s popularity in Japan, have served as contributing factors to our expansion in Asia,” he said.

Lion buys 234 Airbus A320s for $24b
Novan Iman Santosa, The Jakarta Post, Paris | Business | Mon, March 18 2013, 3:57 PM
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The signing of the deal, Lion Air - Airbus, and French President, François Hollande at Élysée Palace

European aerospace giant Airbus has landed a massive deal from local budget carrier Lion Air to buy 234 of its popular Airbus A320 narrow-body aircraft worth up to US$ 24 billion.

Lion president director Rusdi Kirana said that the order might comprise 174 Airbus NEOs (new engine option) and 60 Airbus CEOs (current engine option), although the airline had until next year to determine final configurations.

"These aircraft will be used for two new airlines in the Asia Pacific region that we plan to have by 2014," Rusdi said in Paris. "The first six airplanes will be delivered in 2014."

Previously it was reported that European airframer giant Airbus and Indonesian budget carrier Lion Air would announce an order of 200 narrow-body aircraft A320 aircraft in Paris, France, later in the day, French newspaper Les Echos reported early on Monday.

It was reported that French President Francois Hollande will oversee the announcement ceremony of which details have yet to be revealed.

The huge order, potentially worth almost US$20 billion, marks a major shift in Lion’s procurement strategy, which until recently only included both narrow-body and wide-body Boeing aircraft.

In its inventory, the low-cost carrier (LCC) has a Boeing 737 classic series, 737-800 and 737-900ER narrow-body aircraft. Lion also operates two Boeing 747-400 wide-body aircraft for its Saudi Arabia routes. Lion has also ordered a Boeing 787 Dreamliner.

It is not yet clear whether the order would be a mix of Airbus A320 classics and the re-engined A320 NEO. NEO stands for new engine option, which offers better range and fuel economy.

Previously on Feb. 14 2012, Lion Air signed a contract to buy 230 units of Boeing 737’s consisting of 29 737-ERs and 201 units of the 737-9 MAX, Boeing's answer to Airbus’s A320 NEO.

The contract was signed at the Singapore Airshow in Changi, as a follow up to a memorandum of understanding (MoU) that was signed in Bali on Nov.18, 2011. The MoU was signed with the presence of US President Barack Obama, who attended the ASEAN Summit.

Lion's director of general affairs, Edward Sirait, refused to reveal any details until the announcement was made. He also said there was no change in Lion's procurement strategy, saying it would be better to have comparisons.

“While it is a must for budget aircraft to operate as efficiently as possible, it does not limit operated aircraft only to a single type,” Edward said over breakfast.

“What we are looking for is the efficiency.”

“I believe the limit is 50 units of the same type of aircraft. Beyond that, you have the liberty to operate other type of aircraft that also must meet the efficiency level,” Edward said.

Other than Lion Air, the Lion Group also flies ATR-72-500/600 twin turboprop aircraft for its Wings Air feeder airline. The company is set to launch its own full-service airline, Batik Air, later this month and is preparing its Malaysia-based joint venture, Malindo Air.

 

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North Sumatra Businessmen Ready To Buy Singapore’s Gas Quota
Dewi Andriani, Elok Ani Riani
March 18, 2013 20:28



MEDAN— North Sumatra Indonesia Chamber of Commerce and Industry (Kadin) prepared to purchase Singapore’s gas quota around 8 MMscfd–10 MMscfd to meet gas demand in the province.

Vice Chairman of Energy and Mineral at Indonesian Chambers of Commerce and Industry in North Sumatra, Tohar Soehartono said the option to buy gas which is exported from North Sumatra to Singapore was the final step if gas supply from PGN is considered no longer sufficient.

Moreover it’s feared that gas from PT Pertiwi Nusantara Resources which is PGN partner is predicted will exhausted this March, in fact the contract is valid until 2015. While gas distributed by Pertamina only remain 7 MMscfd.

To cover gas supply in North Sumatra, PT Pertamina EP will accelerate Benggala oil and gas field operation, in Langkat with a potential capacity of 8-10 MMscfd.

According to Tohar, PGN should ask Pertiwi to meet gas supply in North Sumatra based on contract already agreed. “If it’s not possible and gas in North Sumatra dwindling and endanger, we will buy gas that has exported to Singapore around 8 MMscfd-10 MMscfd,” he told Bisnis, Monday (3/18).

Kadin will form a special team to negotiate gas purchase, however Tohar reluctant to mention the investment value. “We will negotiate to buy Singapore’s gas quota at a right price,” he said.

While, PT PGN region III GM, Mugiono asked Kadin to buy Singapore’s gas quota in export price. Besides, there will be some compensation costs to be prepared for this takeover. “There was an option like this, but the central Government didn’t process it due to expensive cost and compensation,” he said.

Pertiwi is still deliver gas around 2 MMscfd, although previously reported to be exhausted in this March. “The important thing is gas still distributes and there’s gas source that could replace gas shortage. The price is still affordable. The option to buy gas is too heavy,” he said.

However, the amount of gas that distributed by Pertiwi is still far below the agreed contract. Because based on contract between PGN and Pertiwi, gas should be distribute reach 10 MMscfd and will continue to decrease until the contract runs out in 2015.

According to him, if well of Pertiwi’s gas source block runs out and will move to find another source, the contract is no longer valid and should be amended. (dan/t08/aph/tw)

 

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Gov't Targets Rp 510 T FDI by 2014
BY DUSEP MALIK & DYAH YOSSIE WIRANTI

JAKARTA – The government targets foreign direct investment (FDI) realization by 2014 to reach Rp 510 trillion (US$ 52.5 billion), rising 30.7 percent from 2013’s target of Rp 390 trillion. Head of Investment Coordinating Board (BKPM) Chatib Basri said the target is high enough amid uncertain global economic conditions, that it needs special attempt.

“2013 target amounts to Rp 390 trillion and in 2014 we target to increase to Rp 506 trillion to Rp 510 trillion,” Chatib explained on Thursday. Chatib said, the 2014 achievement depends on the government’s attempt this year to amend investment regulation to boost foreign investment.

Ferrostaal to build $2b plant in Papua
Posted by Arno Maierbrugger on March 18, 2013

Ferrostaal GmbH, a German supplier of industrial tools and machinery, has said it will build a petrochemical factory in West Papua, Indonesia, at an investment volume of $2 billion.

The project, which involves the construction of plants and supporting facilities to produce methanol propylene and polypropylene from natural gas, is expected to be completed in 2019, the company said in a statement.

The Indonesian government has agreed to allocate domestically produced gas to the Ferrostaal plant, the statement said.

According to Ferrostaal’s member of the executive board, Klaus Lesker, Indonesia could reduce petrochemical imports by up to $600 million annually when the facilities are fully operational. He added that the project would involve the transfer of high technology and significant job creation.

“It will open up jobs for around 3,000 people, whether directly or indirectly,” Lesker said.

Once the facilities are complete, they will be able to produce 400,000 tonnes of polypropylene per year. They will also produce synthetic materials and some gasoline and liquid gas, which will be sold domestically.

Germany is Indonesia’s biggest trading partner in Europe. Indonesian exports to German last year totaled $2.59 billion, while Germany’s exports to Indonesia stood at $3.3 billion. Realised investment from Germany to Indonesia in 2012 was $75.8 million.

 

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Indonesia's Human Development Index Improves

Jakarta (ANTARA News) - Indonesia shows a notable increase on the Human Development Index, according to figures released in the United Nation`s 2013 Human Development Report (HDR) from the UN Development Programme (UNDP).

The report notes that Indonesia is among other notable cases from the Global South or developing countries which have performed particularly well, the Indonesian secretariat said on its official website quoting UNDP Report here on Monday.

In what they call "the rise of the South", the UNDP also includes Brazil, China, India, South Africa, and Turkey alongside Indonesia in referring to well performing countries. The report was launched on 14th March 2013.

The report also states that there is a significant increase in economic output by the Global South. GDP of major developing countries rise significantly since the 90s that they can now rival the US, which remains the world`s largest economy. Today, the South produces about half of world economic output.

The report further mentions Indonesia as high achiever in other areas, namely health and education. This achievement is measured relative to other countries at comparable levels of development.

Additionally, the 2013 HDR also observes Indonesia`s innovative social policy and greater economic outreach as an important driver of its development.

Human Development Report publishes a rank of countries based on composite statistic of life expectancy, education, and income indices.

The first global HDR was published in 1990. From 1990 to 2011, there were 21 global reports and more than 700 national and regional reports produced in over 135 countries and regions.
(Tx.F001/A014)

 

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Indonesian students to hold economic discussion in Netherlands

London (ANTARA News) - Indonesian Students Association in the Netherlands (PPI Belanda) will hold an economic discussion in The Hague next Friday, March 22, 2013.

PPI Belanda Communication and Information spokesman Ryvo Octaviano told ANTARA News here on Monday that the discussion, themed "Innovation as the Prime Mover of Indonesian Economic Growth", would be held in cooperation with Indonesian Embassy in The Hague and Erasmus University`s Institute of Social Studies.

Ryvo said two intellectuals from Indonesia, namely Didiek J. Rachbini, member of National Economic Committee; and Firmanzah, presidential special adviser for economic field would be the keynote speakers in the discussion.

According to him, the discussion would be part of main event in the International Conference on Indonesia Development (ICID) 2013 to present the scientific works on the development in Indonesia.

Ryvo noted that the theme of the discussion was relevant to the condition of economic growth in Indonesia.
(Uu.O001/B003)
Editor: Priyambodo RH

COPYRIGHT © 2013

 

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Banks Commited to Disburse Weapon System Credit
BY RIVKI MAULANA

PINDAD Made tracked APC/IFV

JAKARTA – Two state-owned banks, namely PT Bank Rakyat Indonesia Tbk (BBRI) and PT BNI Tbk (BBNI), are committed to disburse credit to support the producers of primary weapons defense system (alutsista). According to the directors of both companies, the credit prepared for alutsista for this month reaches Rp 6 trillion (US$ 618 million).

Asmawi Syam, Director of Institutional and State-Owned Enterprise Businesses, said the company prepares loan ceiling of Rp 1 trillion for several projects that will be managed by PT Pindad. “The projects include armored vehicles. Pindad receives many armored vehicles orders from overseas,” Asmawi said.

 

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First visit of Belarus President to Indonesia can be called historical.

Today within the framework of the business forum in Jakarta the countries signed contracts worth hundreds of millions of US dollars. Agreements and memorandums on cooperation with Indonesian colleagues were signed by the Belarusian Potassium Company, MAZ, MTZ, Belshina, BelAZ and the research and production association "Center". This year 250.000 tons of potash fertilizers will be sent to Indonesia. There is also an agreement on the supply of dump trucks and tractors. The countries will also cooperate in agriculture. Belarus plans to earn USD 150 million on the supply of milk products to Indonesia.
(Vladimir Semashko, First Deputy Prime Minister of the Republic of Belarus)

The negotiations of the Presidents are taking place in Jakarta right now. Alexander Lukashenko and Susilo Bambang Yudhoyono will discuss bilateral cooperation in restricted and expanded attendance.

First visit of Belarus President to Indonesia can be called historical. » News | Politics » Belteleradiocompany


Belarus Eyes Heavy Equipment Investment
BY EKARINA

JAKARTA – Belarusian government eyes investments in Indonesia. MS Hidayat, Industry Minister, said that the country is interested in heavy equipment, machinery and fertilizer industry.

Hidayat received Dmitry Katerinich, Trade Minister from Belarus, today in Jakarta. Minister Hidayat said that Belarus is one of the best heavy equipment producers in the world. (*)

 

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Indonesia’s State Owned Enterprises Eyes Expansion In Myanmar
Vega Aulia Pradipta, Anissa Margrit, Roberto A. Purba, Herdiyan
March 19, 2013 20:56

Naypyidaw, capital city of Myanmar.

JAKARTA—A total of 15 state-owned companies are ready to spread their wings of businesses to Myanmar to improve their financial performance and market penetration.

Minister of State Owned Enterprises (SOEs) Dahlan Iskan said the national companies which are planning to expand to Myanmar this year include PT Timah (Persero) Tbk (TINS), PT Bank Negara Indonesia (Persero) Tbk (BBNI), PT Bukit Asam Tbk (PTBA), PT Semen Indonesia (Persero) Tbk (SMGR), Perusahaan Listrik Negara (Limited), PT Garuda Maintenance Facility, and Pupuk Indonesia Holding Company (Limited).

"The business expansions of some state-owned companies are preceded by the Coordinating Minister for the Economic Affairs Hatta Rajasa’s visit to Myanmar some time ago," he said on Tuesday (3/19).

Indonesia's Electric Companies, Perusahaan Listrik Negara (PLN) will tie a partnership with the local electric company in Myanmar to reduce electricity losses. The losses are caused by poor electricity distribution system in that country. In fact, the loss is estimated at the level of 25%.

"PLN will act as a consultant to the Myanmar electricity company in helping the country reduces its losses. This is the first time, " he said.

Meanwhile PT Timah has already obtained concession over a 10,000 hectare land in the country. Therefore, the company realizes its investment by opening the mine this year.

Another national company, Garuda Maintenance Facility (GMF), currently submitted its bid for aircraft maintenance to airlines companies in Myanmar. This is done because the subsidiary of Garuda Indonesia is qualified in their field, aircraft maintenance. "There is no problem with GMF’s expertise. It can be run this year, "he said.

In the meantime, Bukit Asam participated by building coal steam power plant in Myanmar, in cooperation with local companies. The power plant is estimated to bring up capacity of 2x200 megawatt (MW)

Semen Indonesia and Pupuk Indonesia also planned to build plants in Myanmar. For a while, Semen Indonesia will fulfill cement demand in Myanmar from existing cement plant in Vietnam.

Dahlan added PT Bulog also will cooperate with Myanmar for provision of special rice or rice variety that cannot be produced by Indonesia. “This year, Indonesia will not import rice. Since Bulog’s rice supply is still sufficient. If it’s stored too long, the value will go down,” he said.

In contrary, PT Telekomunikasi Indonesia Tbk plans to explore a business in Myanmar. However, Dahlan is pessimistic the plan can be actualized this year, because it’s still waiting for the green light from local government.

Deputy of Infrastructure and Logistic Sumaryanto Widayatin said the Ministry had met with four SOEs that will develop their businesses in Myanmar this year, namely PT Pertamina, PT Wijaya Karya, PT Semen Indonesia and PT Bank Negara Indonesia Tbk. “Through Indonesian Incorporated program, those companies will conduct expansion in Myanmar,” he said.

According to Sumaryanto, Pertamina will develop oil and gas field, Wika will build infrastructure and property and Semen Indonesia aims to build a cement plant in the Country. Meanwhile, Bank BNI through its representative office in Myanmar is ready to finance the SOEs’ investments in Myanmar.

“Indonesia Incorporated is established as a forum for SOEs that intends to develop their business in overseas,” he said.

It’s likely that other SOEs will also join to Indonesia Incorporated to expand to other countries, Sumaryanto concluded. (Annisa Margrit/Roberto Purba/Vega Aulia Pradiptaa/t03/t08/aph)

 

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Airbus to Set up a Workshop in Batam
Arientha Primanita | March 20, 2013

Toulouse, France. French aircraft manufacturer Airbus SAS has agreed to establish a workshop on Batam island in Riau Islands province at the request of Lion Air, just a day after the airline agreed to purchase 234 single-aisle aircraft from the plane maker on Monday.

Lion Air president Rusdi Kirana said on Tuesday that the airline has sought support from Airbus as part of the $24 billion deal, including the French company setting up an airplane workshop on Batam.

The 16-hectare workshop is expected to begin the first stage of operations by the middle of this year.

“Domestic airlines will not only sell tickets but can also maintain their aircraft within the country,” Rusdi said. “[The workshop] is not only for domestic-owned aircraft, but also for foreign airlines.”

Rusdi said the workshop was expected to create jobs in Indonesia.

“This creates job vacancies as well as giving foreign exchange to our country,” Rusdi said on Monday at the Airbus Delivery Center in Toulouse.

Rusdi said some Airbus technicians will work at the facility so that it can acquire European certification in aircraft maintenance. With the certification, he expects foreign airlines to send their aircraft to the Batam facility for maintenance.

Lion Air has also asked Airbus to start a joint company for the training of pilots and technicians.

As the company behind Airbus’s biggest-ever order, Lion Air also encouraged Airbus to order aircraft components from Indonesia’s own aircraft manufacturer Dirgantara Indonesia, Rusdi said.

“We have the power to lobby them because we are their biggest buyer and they [Airbus] have been really cooperative about this idea,” Rusdi said.

Monday’s record $24 billion deal will be financed by the European Credit Agencies. Rusdi said the ECA could loan the company 85 percent of the total value of the deal, with the remaining 15 percent financed by a commercial syndication. Lion will have no share in the financing.

Lion is expected to cover the loan within 12 years through installments. “In 10 to 12 years we can cover the finance. I am sure because of technology, cheaper aircraft maintenance, efficient fuel as well as a growing market,” Rusdi said.

When asked what collateral Lion Air has to receive such a large loan, Rusdi said with a smile “Rusdi Kirana [is the collateral].” “The loan is to encourage Europe exports and imports and for them, Lion has a good track record. So our capital is trust,” he said.

The 234 aircraft ordered will increase the number of planes in Lion Air’s fleet to 727. The company has said it aims to have 1,000 aircraft by 2027.

The company has hinted at plans to establish new airlines in the Asia-Pacific region. This expansion has started with Lion Air’s Malaysian low-cost carrier Malindo Air, which has its first flight scheduled for Friday.

With the new planes, Lion Air will be able to provide a varied range of services, ranging from low-cost to full service.

In 2011, Lion ordered Boeing aircraft worth $21.7 billion.

John Leahy, chief operating officer-customer at Airbus, said the airline industry is growing fast. He said air travel globally doubled every 15 years despite economic conditions, while in the Asia-Pacific region, it doubled every 10 years.

Air transport growth, Leahy said, is highest in expanding regions like China, India, Indonesia, the Middle East, Asia, Africa and Latin America. He added that the aviation industry matched advancements in emerging economies.

He added that Indonesian was a key growth market for air travel because of the big population, vast travel distances and economic growth.





Iraq Willing to Supply an 'Unlimited' Quantity of Crude Oil to Indonesia
Tito Summa Siahaan | March 19, 2013

Indonesian has received a long-term commitment from the Iraqi government to supply Indonesia with crude oil to meet domestic needs, a high-ranking official said on Monday.

Susilo Siswoutomo, the Indonesian deputy minister for energy and mineral resources, said the Iraqi government was willing to supply Indonesia with an “unlimited” supply of crude oil. “There’s even a discussion to make this partnership last 50 years,” he added.

Susilo was among the Indonesian government officials who visited Iraq last week. The delegation, which was led by Coordinating Minister for the Economy Hatta Rajasa, cut short their visit after a bomb was set off near the Indonesian Embassy.

Susilo said state-owned energy firm Pertamina had signed a memorandum of understanding to secure a crude oil supply amounting to 65,000 barrels per day.

Going forward, Iraq and Indonesia could become major partners in the latter’s plans to develop more oil refineries. Susilo said Indonesia intends to source its crude oil supply for future oil refining facilities from the war-torn country.

“Indonesia could get 300,000 barrels of oil per day from Iraq just for the first stage of refinery development,” the deputy minister said.

However, it is up to Pertamina to make the final decision, with Susilo saying the oil and gas firm might shop around before agreeing to a deal with Iraq.

“Moreover, the Iraqi government also wants to participate in refinery development in Indonesia by acquiring some interest,” he added.

In the past couple of years, Indonesia’s reliance on oil imports has increased as domestic output has failed to keep pace with demand. Oil output was 826,000 barrels per day last year, while demand stands at 1.3 million barrels per day.

Hanung Budya, Pertamina’s marketing director, had previously disclosed that the firm imported up to 11 million barrels of oil-based fuel per month to keep pace with domestic demand. Such high imports have weighed on Indonesia’s fiscal health, leaving Indonesia with a trade deficit last year.

According to the Trade Ministry, Indonesia booked a trade deficit of $5.6 billion in oil and gas, outstripping the $3.9 billion surplus from other commodities.

To reduce the country’s dependence on fuel imports, the government has laid out plans to build three oil refineries, each with a capacity of processing 300,000 barrels of oil per day, with two of them to be built by Pertamina.

Pertamina will partner to Saudi Arabia’s Aramco to build a refinery in Tuban, East Java, while the other refinery, located in West Java’s Balongan, will be developed together with Kuwait Petroleum.

Pertamina is also seeking the possibility of acquiring a participating interest in the West Qurna 1 block in Iraq. It was previously reported that Pertamina wants a 20 percent interest in the block, which is operated by ExxonMobil with a 60 percent interest.

West Qurna 1 is one of the largest oil fields in Iraq. It is estimated that the block holds 8.7 billion in oil reserves, with current output standing at around 400,000 barrels per day.

ExxonMobil intends to sell its interest in the block after it acquired another block from the semi-autonomous Kurdistan government with the consent of the Iraqi government. But Reuters reported that China National Petroleum is the likely winner to assume ExxonMobil’s majority stake.

 

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Belarus, RI enter new level of relations
Ina Parlina, Linda Yulisman and Raras Cahyafitri, The Jakarta Post, Jakarta | Business | Wed, March 20 2013, 1:34 PM

State visit: The Belarusian President Alexander Lukashenko (left) is welcomed by President Susilo Bambang Yudhoyono at the Merdeka Palace in Jakarta on Tuesday. The Belarus leader is on a three-day state visit to enhance cooperation in all important segments of relations between the two countries. (JP/Jerry Adiguna)

With the signing of bilateral agreements at the Merdeka Palace in Jakarta on Tuesday, Indonesia and Belarus are entering a new stage in their relations and are set to broaden cooperation in a number of fields.

The agreements came during the state visit by Belarusian President Alexander Lukashenko, who on Tuesday had talks with his Indonesian counterpart President Susilo Bambang Yudhoyono.

His three-day visit to Jakarta has been the first high-level visit since the two countries established diplomatic relations 20 years ago.

Lukashenko brought an 80-member delegation of business people and high level officials.

Also on Tuesday, ministers of the two countries signed seven agreements in a ceremony attended by the two heads of state on issues of economic and technical cooperation, science and technology, agriculture, the defense industry, legal matters, disaster management as well as an agreement on avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income.

“These examples show that we [both countries] want concrete bilateral cooperation, which we will continue to boost in the future,” Yudhoyono told a press conference after the meeting.

Lukashenko agreed, adding there was indeed huge potential in mutual cooperation in those fields.

As Belarus is seeking to deepen cooperation with Southeast Asia, Lukashenko said, Indonesia is a key partner in this vast region and may help Belarus promote itself here.

“This is a big step forward and I believe the two countries can be bridges for each region,” Lukashenko said. “Belarusian interests in Indonesia, Indonesia’s interests in Belarus, Belarus in ASEAN and Indonesia in Europe.”

In addition, Yudhoyono said that there was an opportunity that the two countries could take together as Indonesia’s economy continues to grow with an increasing purchasing power and a strong domestic
market.

“While we know there is a Customs Union involving Belarus, Russia and Kazakhstan, of course it is a good opportunity for regional cooperation between ASEAN and the Customs Union,” he added.

“For us, the amount of the trade volume is still too small; it should be improved,” Yudhoyono said. “So too our reciprocal investments.”

Regarding the defense sector, Yudhoyono underlined that cooperation in the defense industry is also equally important whether it will lead to joint production, joint research and development or other cooperation.

“It was already initiated; we just need to increase cooperation in peacekeeping missions in various parts of the world,” the President said.

On March 20-22, Lukashenko will pay an official visit to the Republic of Singapore to meet with his Singaporean counterpart Tony Tan Keng Yam and Prime Minister Lee Hsien Loong.

Meanwhile, Belarus First Deputy Prime Minister Vladimir Semashko said on Tuesday that there was ample room to improve economic relations, particularly in the areas of industry and agriculture, as the current bilateral relation was still much below its potential.

“Our countries are just opening up to each other. Bilateral trade is not so high, at around US$130 million. I am sure this is the beginning of a big process,” he said in his opening remarks.

The Belarusian-Indonesian Business Forum was held in Jakarta.

During the forum, a number of Indonesian and Belarusian business people sealed memorandums of understanding on trade activities that covered a variety of products, including milk, tires and heavy equipment.

Speaking at the forum, Deputy Trade Minister Bayu Krisnamurthi said that Indonesia called for deeper engagement not only in terms of trade, but also investment. Investment potential was available in the areas of natural rubber processing, post harvest technology in agriculture and poultry distribution management, he added.

Separately, Industry Minister MS Hidayat said after meeting his Belarus counterpart, Dmitry Katerinich, at his office that several Belarusian industrial firms, particularly heavy equipment manufacturers such as BelAZ, had looked into the possibility of setting up production facilities in Indonesia.

“They asked the [Indonesian] government to find local partners and strategic locations for their investment,” said Hidayat.

Bilateral trade between Indonesia and Belarus, a land-locked Eastern European country sandwiched between Russia and the European Union (EU), amounted to $90.64 million, dropped by 44.4 percent from a record high of $163.02 million in 2011, according to Indonesia’s trade statistics. However, trade stood at $220 million in 2011, according to Belarusian statistics.

Indonesia’s main exports cover palm oil, natural rubber, cacao, fisheries products, textiles, footwear, furniture and electronics, while key imports include potassium fertilizers, agricultural machinery, weapons and heavy equipment.

Priyatno Sulisto, the Indonesian Chamber of Commerce and Industry’s (Kadin) Russia and CIS Committee head, said that despite huge potential, cooperation between the two countries was still blocked by a lack of political commitment.

Meanwhile, publicly listed heavy equipment distributor PT Kobexindo Tractors announced on Tuesday that its subsidiary PT Belarus Tractors Indonesia obtained a contract to be the exclusive distributor of Belarus Farm Tractor produced by Minsk Tractor Works.

The contract is expected to strengthen Kobexindo’s sales of heavy equipment to the agribusiness sector, in which Minsk Tractor Works has qualification.

“This cooperation will push growth [of sales] in agriculture, plantations and forestry segments, especially related to the declining price of coal,” Kobexindo president director Humas Saputro said.

The decline of the price of coal last year has affected the business of heavy equipment distributors, particularly those relying heavily on sales to coal miners, who are halting their expansion and purchases of heavy equipment due to a depressed market.

 

[Viet]

Nice thread, it is much better than in the ASEAN thread.

 

[nufix]

Nice thread, it is much better than in the ASEAN thread.

Yea I figured that's so, day by day the topic became too irrelevant. Thanks for greeting this thread, man.

 

[Reashot Xigwin]

Serbia seeks to forge strategic partnership with RI
Yohanna Ririhena, The Jakarta Post, Jakarta | World | Wed, March 20 2013, 1:11 PM

Media visit: The Jakarta Post’s chief editor, Meidyatama Suryodiningrat (left), welcomes Serbian National Assembly Speaker Nebosja Stefanovic during a Serbian parliament delegation visit to the Post in Palmerah, Jakarta on Tuesday. (JP/R.Berto Wedhatama)

Serbia is exploring opportunities to forge strategic partnerships with Indonesia, with a visiting lawmaker saying that the two countries can serve as hubs for their respective regions.

“We are very interested in a strategic partnership [...] and we are trying to open the door to Indonesian investors,” Serbian National Assembly Speaker Nebosja Stefanovic said during the visit of a delegation from the Serbian parliament to The Jakarta Post on Tuesday.

Serbia is trying to open direct trade links, as it is in need of Indonesian palm oil, rubber and tea, which it has to date purchased through Rotterdam, the Netherlands. “It is more expensive. Why should we pay double prices?”

He added that Serbia, with a potential market of 8 million, could also serve as a hub for Indonesia as it seeks to penetrate the wider European market.

Serbia hoped to boost cooperation mainly in agriculture, energy and tourism, according to Stefanovic, who said that Indonesian tourists arriving in Istanbul, Turkey, could connect to Belgrade-Montenegro-Ljubljana-Bosnia.

Stefanovic also referred to the close ties between Indonesia and Serbia when president Soekarno and Yugoslav president Josip Broz Tito initiated the Non-Aligned Movement.

“Indonesia stood by us in the difficult times. Therefore, we should try to find our old friends,” he added.

Stefanovic described Serbia as a nation of several religions, where people of different beliefs lived side by side and where minorities held positions in government and parliament.

Serbia has been attempting to drum up support for its stance on Kosovo. “We are trying to explain that the issue is not about religion,” Stefanovic said.

Serbia’s continued refusal to recognize Kosovo’s independence has undermined Serbia’s path to join the EU. The nation submitted an application to join the EU in 2009. However, the talks on its accession can only start after Serbia normalizes ties with Kosovo.

There were signs of movement earlier this year when Serbia hinted at a de facto acknowledgement of Kosovo’s sovereignty by demanding rights for the Serbian minority there.

“We are trying very hard to find a solution to this issue. The good thing is that we have a good understanding within our society,” Stefanovic added.

During his four-day visit, Stefanovic met with House of Representatives Speaker Marzuki Alie, People’s Consultative Assembly Speaker Taufiq Kiemas, chairman of the Regional Representatives Council Irman Gusman and several ministers.

Indonesia-Serbian legislative bodies signed a memorandum of understanding (MoU) to increase cooperation and exchange experiences in making effective laws.

Serbia seeks to forge strategic partnership with RI | The Jakarta Post


S. Korea, RI seek ‘win-win solution’
Tertiani ZB Simanjuntak, The Jakarta Post, Jakarta | World | Wed, March 06 2013, 8:20 AM


South Korea and Indonesia will promote and further enhance their existing bilateral relations, cooperation and people-to-people diplomacy as both celebrates the 40th anniversary of diplomatic ties.

Ambassador Kim Young-sun said on Tuesday that both countries have enjoyed a close relationship within a relatively short period in comparison with other countries.

“The South Korean community is the largest in Indonesia, with 50,000 citizens across the archipelago. There are around 2,000 Korean businesses in the country, over 150 of them are restaurants located in Greater Jakarta alone,” he told a press conference on the announcement of the string of events to commemorate Korea-Indonesia Friendship Year.

He said that his country still seeing Indonesia as strategic partner, which according to him, could only be built based on trust.

“We are seeking long-term cooperation and to be able to do so we have to have a similar vision and values. By strategic partnership, I see it as cooperation where the two countries benefit from it. In other words, there should be a win-win solution.”

The ambassador reminded that Korean businesses have created jobs for over 1.1 million Indonesians thus has contributed in creating a stable economy.

South Korea is the fifth-largest foreign state investor in Indonesia, which investment reached US$1.2 billion in 2011, four times the figure in 2010.

In 2011 trade volume was at $31 billion, and there are aims to increase it to $40 billion by 2014 and $100 billion by 2020.

Currently, Korean steel giant Posco has pledged investment of a total of $11 billion which could boost production of 3 million tons of cold steel in the first phase, and double in the second phase of investment, the ambassador said.

However, Kim said, there were challenges in the relationship that both countries must settle.

“We encourage good governance of Indonesia as we expect reasonable and predictable public policy for us to go along with.

“Indonesia has to be able to create a good investment climate. Korean businesses are facing difficulties with the minimum wage hike,” he said.

According to the Jakarta Manpower Agency, at least 360 companies have sought approval from the administration to postpone the new minimum monthly wager.

According to the Indonesian Employers Association (Apindo), a number of foreign companies particularly from South Korea and India have relocated their businesses to other Asian countries following the wage increase.

“Therefore, it is high time for us to get to know each other well to determine the next frontier of the relationships,” Kim said.

The celebrations will officially start on March 8 with a reception and cultural performances followed by a Music Bank show on the next day which will present Korean and Indonesian pop artists.

Tourism and Creative Economy Ministry’s director general of creative economy Ahman Sya said that Indonesia could learn from South Korea about creative industry. Korea has invaded the globe with their art and pop music.

“Indonesia has the potential to develop creative economy with young people comprising 43 percent of the population. We encourage Indonesians to appreciate homegrown products, but exchanging cultures between countries will widen our knowledge for our advantage,” said Ahman.

The string of events will include seminars on politics, economy and trade, culture as well as defense in both countries.

Both countries have been involved in deeper defense cooperation, including the joint jet fighter KFX/IFX development.The ambassador on Tuesday assured the continuity of the program between both countries amid news that Seoul has postponed financing the second phase, the Engineering Manufacturing Development (EMD) phase of the joint jet fighter development. The EMD phase will lead to a number of prototypes for static and flight testing by 2020 before entering the third or production phase.

Indonesia is committed to procure 50 jet fighters while South Korea is expected to procure some 20.

S. Korea, RI seek

 

[nufix]

Indonesia Rises to Top 10 Economic Power
BY CHUSNUL CHOTIMAH

A view of Suramadu Bridge with Surabaya city as background.

JAKARTA - ASEAN Economics Long View projected that Indonesia will be included in the top 10 of world economic power by 2025 based on gross domestic products nominal value.

The report stated that efforts must be made by Indonesia to reach such top position, as it will not happen by itself. Supporting factors include growth in manufacturing, infrastructure developments and urbanization. (*)

Indonesia Rises to Top 10 Economic Power - Indonesia Finance Today