INTERVIEW: Indonesia Min: Invest Stimulus Steps Imminent February 17, 2006
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By Phelim Kyne and Fitri Wulandari of Dow Jones Ne – 2006-02-17 09:36:25
February 16, 2006
JAKARTA (Dow Jones)–Indonesia’s government will unveil by next week a long-awaited policy package aimed at immediately boosting investment, Minister of Trade Mari Elka Pangestu said Thursday.
Coordinating Minister for the Economy Boediono is currently finalizing the policy measures, Pangestu told Dow Jones Newswires.
“(The package) will contain a lot of immediate short-term deregulation and streamlining (of investment stimulus) measures,” Pangestu said.
There will also be “clear indications of changes in the law and regulations which people are hoping for in investment, tax, customs, labor and decentralization,” she said.
Pangestu said her ministry and the Ministry of Transportation have also drawn up a list of urgent, short-term measures to assist Indonesia’s export production sector.
Those measures prioritize transportation infrastructure improvements, including linking of toll roads and the extension of rail links between industrial estates and Jakarta’s Tanjung Priok harbor.
“Following complaints from producers…we have prioritized (reducing) infrastructure bottlenecks which are affecting major export production areas,” Pangestu said.
Boediono’s stimulus package reflects the government’s efforts to lure back investor dollars at a time when analysts say the official target for 6.2% economic growth this year is overly optimistic. Analysts are predicting an economic expansion between 5.40% and 5.50% this year.
Indonesia’s economy expanded 5.60% in 2005, below an official target of 6.0%, but outpacing growth of 5.40% in 2005. The economy contracted in quarter-on-quarter in the October to December period.
The investment stimulus package will also mark Boediono’s long-awaited policy debut since he re-entered the government in December in a shuffle of President Susilo Bambang Yudhoyono’s economic cabinet.
Investors have snapped up Indonesian assets in anticipation of the widely-respected Boediono’s policy initiatives. The rupiah has risen on speculative inflows to IDR9,223 to the dollar Thursday from a four-year low against the dollar of IDR11,900 in August and IDR9,835/dollar at the end of last year.
Boediono served as finance minister under Yudhoyono’s predecessor, Megawati Sukarnoputri, and is credited with weaning Indonesia off an International Monetary Fund emergency borrowing program at the end of 2003.
Investment Stimulus Needed As Economy Slows
The challenge facing Pangestu and Boediono is to boost investment to sustain the official target of 6.6% average annual growth in gross domestic product from 2004 to 2009.
Analysts say the government’s failure to address investor concerns about Indonesia’s regulatory environment and the effective abandonment of an ambitious infrastructure investment program launched in early 2005 have held back potential investment inflows.
Indonesia will likely record a 21% rise in actual foreign and domestic investment to IDR139 trillion ($15.1 billion) for 2006, the head of the official Investment Coordinating Board said Tuesday.
“We’ve got to see increased investment coming back in, including expansion of existing (production) capacity,” Pangestu said.
“For that to happen, a number of things have to begin to be felt this year with regard to improving the invest climate and infrastructure,” she said.
Indonesia’s economic growth has been decelerating under the weight of high interest rates and lingering inflationary pressure.
The central bank has raised its benchmark Bank Indonesia rate several times since August to 12.75% to cope with the combination of a sliding currency and surging inflation. An effective doubling of fuel prices on Oct. 1 spurred year-on-year inflation to a peak of 18.38% in November, before it eased to 17.03% in January.
The government plans to further reduce subsidies by increasing electricity tariffs in 2006, potentially causing inflation to spike again.
Pangestu projected that exports will rise at least 13.0% this year from last year. That would mark an easing from 19.5% year-on-year growth to $85.57 billion in 2005.
“(Exporters) are being affected by higher inflation and fuel costs,” she said.
“That’s why we are working hard to come up with a package that will address some of these high-cost economy issues.”
Gorontalo’s Investments Expected to Reach Rp3,5 Trillion in 2006 February 17, 2006
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ANTARA News – 2006-02-17 09:45:35
February 16, 2006
Gorontalo (ANTARA News) – Governor of Gorontalo Fadel Muhammad has expected that his province would reach total investments worth Rp3.5 trillion (around US$360 billion) and an economic growth rate at more than 7.3 percent in 2006.
“Initially we predicted to receive total investments worth Rp2.5 trillion consisting of government s investments totaling at Rp1.6 trillion and private investments at Rp900 billion, said Fadel in his remarks during the celebration of the Fifth Anniversary of Gorontalo Province here Thursday.
However, the Province has received a total budget amounting to Rp2.6 trillion for the 2006 year, which is much higher that its earlier estimation, he said.
“With private investments predicted at Rp900, so we expect to get total investments amounting to Rp3.6 trillion in 2006, said Governor Fadel, who is also a businessman.
The new province, which was formerly part of North Sulawesi Province, celebrated this year s anniversary under a theme of We Strengthen Unity in Peaceful Atmosphere .
To highlight the anniversary, the Gorontalo Administration organizes a number of activities such as an international seminar and workshop on maize, the 2006 Scout Camping event being participated in by around 3,000 scouts from all over Indonesia and several neighboring countries, a signing of memorandum of understanding (MOU) with ANTARA News Agency, and the inauguration of ANTARA bureau office.
Gorontalo, located in the northern part of Sulawesi, has targeted to produce maize at least one million tons in 2007. (*)
RI to Ban Non-Investing Foreign Fishery Operators February 17, 2006
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ANTARA News – 2006-02-17 09:47:31
February 16, 2006
Surabaya, E Java (ANTARA News) – The Indonesian government will start banning foreign ships from fishing in Indonesian waters in 2007 in the absence of international cooperation or investment in fisheries, State Minister for Maritime Affairs and Fishery Freddy Numberi said on Thursday.
“Starting next year, no foreign ships will be allowed to fish in Indonesian waters except if they establish cooperation or investment in fisheries ” he told students of the Surabaya Technology Institute (ITS).
He said the ban was in line with the expired contract of the foreign ships (to operate) in Indonesia such as the Philippines (last December), Thailand (next September) and China (next December).
“Therefore, if there are foreign ships entering Indonesia (without any cooperation or investment scheme), they will be illegal ones,” he added.
He said foreign ships could remain operating in Indonesia in 2007 but under beneficial cooperation schemes, namely they should invest some money in Indonesia first and not only obtain a fishing license like before.
“Under a license, they can enter Indonesia and bring home the fishes they have caught provided they pay some money. But starting in 2007, they can not enter Indonesian waters if they have yet to invest here,” he said.
He further said three Philippine companies have expressed their wish to invest in Sorong (Papua) and Ambon (Maluku) with a total investment of Rp200 million (US$21,739.13) with 60 ships and added similar proposals had been made by Thai and Chinese companies.
He added his ministry was now calculating whether limitation for the ship number was necessary or not to maintain the fish potentials. (*)
Illegal logging crackdown in Java brings 512 arrests February 17, 2006
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Tb. Arie Rukmantara and Suherdjoko – 2006-02-17 11:30:30
The JakartaPost/Jakarta/ Semarang/Makassar
February 17, 2006
Despite 512 arrests from an ongoing operation to curb illegal logging in Java and the promise of more detentions, an activist says the crackdown will do little to reduce the environmental cost to local communities.
“The number of arrests and the evidence will continue to increase in the near future because we already know their identities,” the president of state-owned forestry firm Perhutani, Transtoto Handadari, said Thursday after attending an evaluation meeting of operation Hutan Lestari III at Central Java Police headquarters in Semarang.
Transtoto said in Jakarta earlier that as of Tuesday the monthlong operation — launched Jan. 20 and conducted by Perhutani and the National Police — confiscated about 2,500 cubic meters of illegally sourced timber in West, Central and East Java as well asYogyakarta.
Among those arrested were a senior forestry company official, military personnel, a police officer and several community leaders.
“We want all the criminals convicted in court. As for the company official, we will fire him and also expect that he gets the heaviest punishment from the court.”
He claimed the operation succeeded in minimizing state losses from illegal logging in forests under his company’s control.
“Last year’s losses were estimated at Rp 69 billion (US$7.45 million). With the success of this operation, we aim to cut the losses in half.”
Losses reached Rp 81 billion in 2004 after tumbling from an estimated Rp 218 billion in 2003, he said.
Perhutani manages about 2.5 million hectares of the more than 10 million hectares of forests in Java, from which it produces almost 1 million cubic meters per year.
Despite the crackdown, Elfian Effendi of local nongovernmental organization Greenomics said Perhutani should provide a more accurate calculation of state and public losses.
“This kind of operation always announces the amount of money they have saved, but they never reveal the losses that people living in Java have to bear as a consequence of environmental degradation from illegal logging.”
The calculation should be based on the loss of biodiversity and forest quality due to the deforestation, he added.
His office’s latest study showed more than 100,000 hectares of protected forests were lost in Java in the last three years, mostly due to illegal logging.
“We assume that the ecological losses could reach about Rp 8.3 trillion. So the money saved by Perhutani is nothing compared to that number,” he said.
Several communities in East and Central Java were devastated by flash floods and landslides in January.
Previous operations in Kalimantan and Papua failed to bring any convictions.
Meanwhile, the South Sulawesi Forest Police Task Force impounded two motor boats carrying about 700 cubic meters of illegal timber in Paotere harbor, Makassar.
No one has been declared a suspect, but the province’s forestry civil investigator, Rempek, said the action was taken because the crews could not show official documentation for their journey to Gresik, East Java.
“Based on Government Regulation No.5/2004, if one of the official documents is not available, then the timber is considered illegal,” he said.
Jakarta monorail finance agreed February 17, 2006
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TheStandard – 2006-02-17 10:58:02
Friday, 17 February 2006
The Dubai Islamic Bank has reportedly agreed to fund Jakarta’s first monorail project, removing financial hurdles that have dogged the plan from the outset.
The bank will provide credit of US$500 million (HK$3.9 billion), Jakarta Governor Sutiyoso said, so “the monorail project should be completed soon. We need to work night and day.”
Sukmawati Syukur, a director for Jakarta Monorail, confirmed the agreement, Kompas daily said.
The 27-kilometer monorail project was inaugurated in June 2004 by then- president Megawati Sukarnoputri, but work has been hampered by a lack of money and wranglings over the technology to use.
Two lines will serve Jakarta’s business districts and outer areas, and are expected to carry up to 270,000 passengers a day. The first line is supposed to be completed by next year.
A memorandum of understanding to get construction started was first awarded in 2003 to Malaysian firm MTrans but the deal was canceled.
Source: TheStandard
ASEAN Tourism Forum 2006 February 16, 2006
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INDONESIA TOURISM SET TO RECOVER THIS YEAR SAYS UNWTO February 16, 2006Posted by ekon in pariwisata.add a comment
MINISTER: IN-FLIGHT MAGAZINES AS A MEANS OF PROMOTION February 16, 2006Posted by ekon in pariwisata.add a comment
Major Investors to Start Building Projects in Indonesia This Year February 16, 2006Posted by ekon in investasi.add a comment ANTARA News – 2006-02-16 09:35:27 Jakarta (ANTARA News) – A number of major foreign investors will realize their investment in Indonesia now that the business climate in Indonesia is improving, the country`s chief investment coordinator said. Five foreign investors will develop industries and businesses in Indonesia this year, chairman of the Investment Coordinating Board (BKPM) Muhammad Lutfi said here Tuesday after a meeting with President Susilo Bambang Yudhoyono at the presidential office. The international companies included PT Asia Timur Perdana, which will set up a construction business with an investment worth U$263 million in the Jababeka industrial estate, West Java, and a Thai investor will start a cement company under the name of PT Semen Jawa with a total investment of U$95 million. The others were PT Bio Energi Nusantara which will be engaged in the bio diesel sector with investment valued at US$41.41 million, PT Kirin Miwon which will initiate a food seasoning factory in Lampung, southern Sumatra, with a total investment of around US$87 million, and India`s TVS motorcycle manufacture, which will relocate its production facilities in other Asian countries to Indonesia with an investment worth U$60 million. “TVS will be operating in the Jababeka industrial estate. They have requested a permit, and their factory is currently under construction,” said Lutfi. Lutfi also reported to the President that three palm oil plantation companies were planning to open new plantation areas in Indonesia. They were PT Sebakis Inti Lestari in East Kalimantan, PT Putra Makmur Lestari in West Kalimantan, and PT Mitra Tani Tata Lestari in Jambi, Sumatra, with investments respectively worth around Rp330 billion (about U$31 million), Rp400 billion (about US$38 million), and Rp327 billion (about U$30 million). “There is another very major investment, between January and February 2006, PT Oso Multi Pratama will develop a basic organic chemical industry based on oil and gas in East Kalimantan with an investment of Rp4.841 trillion (around U$500 billion). This is a breakthrough and fresh air for investment planning in Indonesia,” he said. Lutfi also reported to the President on the country`s investment performance during 2005. In January-December 2005, the realization of investments increased by around 96 percent, reaching U$12.14 billion in 2005 from U$6.21 billion in 2004. Last year`s overall investmens consisted of US$3.23 billion in domestic investments, and U$8.91 billion in foreign investments. “Domestic investments were mostly in the paper and printing industry, food, plantations, construction, chemical and pharmaceutical industries. While foreign investors were mostly in telecommunications, chemical, construction, food, metal, machinery, and electronic industries,” he said. Major investing countries in Indonesia are Singapore (with a total investment standing at U$2.15 billion, in 108 projects), England (U$1.293 billion in 70 projects), Japan (U$1.14 billion in 145 projects), Mauritius (U$943 million in 11 projects), and the Netherlands (U$920 million, in 33 projects). The new projects created new jobs for 278,859 people, according to Lutfi. Dino Patti Djalal, a presidential spokesman, who accompanied the President during the meeting with Lutfi, said the President asked the Investment Coordinating Board to send him a monthly report on Indonesia`s investment progress. (*) Indonesia raises hopes for outside investors February 16, 2006Posted by ekon in investasi.add a comment By Shawn Donnan in Jakarta / FT Com / MSNBC – 2006-02-16 09:49:21 Indonesia has never been an easy place to do business and, in recent years, high-profile disputes between Jakarta and foreign investors such as ExxonMobil, Cemex and Newmont have stood as stark evidence of that. The result, in a world where investors are able to shift foreign capital across borders quickly, is easy to identify. Eight years on, Indonesia’s economy continues to struggle to recover from the Asian financial crisis and rid itself of the structural legacies of 32 years of crony capitalism. The 2004 election of President Susilo Bambang Yudhoyono, a former Suharto-era general who has positioned himself as an economic reformer, raised hopes among foreign investors. But while Mr Yudhoyono’s government has launched an unprecedented war against Indonesia’s endemic corruption, the consensus remains that it has been slow to deliver on other investment climate reforms. That may be about to change. Jakarta is expected to sign an agreement on Thursday that will take its environmental dispute with Newmont, the world’s largest gold producer, over the Minahasa Raya mine in North Sulawesi a step closer to resolution – albeit one that will require the US miner to pay $30m over the next 10 years. Economic ministers are also scheduled on Thursday to quietly brief an investment climate working group made up of key bilateral and multilateral donors on plans for what is touted as a re-energised reform agenda. The policy package, work on which began last year, is built around revisions to a controversial draft tax law as well as new labour and investment laws. On top of that is an infrastructure-related policy package designed to resuscitate a stalled $150bn infrastructure investment programme that Mr Yudhoyono’s government launched early last year. According to Indonesian officials and others who work closely with the government, there are also hopeful signs that a final resolution to the longstanding dispute with Exxon-Mobil over the operatorship of the Cepu field in central Java may be moving closer. Officials say it is now in the hands of Boediono, the respected academic who took over as chief economic minister last December. He has been consulting with the president on how to break a deadlock between Pertamina, the state oil company, and ExxonMobil over who should operate the Cepu field. People close to the negotiations say progress has been made in drafting the other components of a joint operating agreement, which could see a deal signed within days. Mr Yudhoyono’s government still faces obstacles to needed reforms. Plans for an electricity tariff increase – something that investors say is badly needed to help attract foreign investment to Indonesia’s ailing power generation sector – face significant political opposition. But analysts say the Newmont settlement, due to be unveiled on Thursday, is at least one concrete example that Jakarta has not lost sight of what it needs to do to lure foreign investors back. “In the end what matters is the direction. Is the government moving in the right direction? And the speed. Is the government moving in that direction fast enough?” said Fauzi Ichsan, Standard Chartered’s chief economist in Jakarta. “There will be different perspectives on the speed. But in the end, everyone agrees the direction is good.” Analysts argue that a partial resolution to the Newmont saga is unlikely to carry the same weight as Jakarta finally resolving the fate of the $2bn Cepu field. The field is expected to add about 170,000 barrels per day to Indonesia’s current production of just under 1m bpd. “Cepu would be a milestone,” said Mr Ichsan. Meanwhile, Newmont still faces a criminal trial over alleged pollution at the Minahasa Raya gold mine that is expected to drag on until June or July. One of the company’s top executives faces a lengthy jail term if he is convicted. The “goodwill agreement” to be signed today also contains a bitter pill – Newmont will pay $30m over 10 years to fund a new community development foundation and monitor both the environment and health of people around the former mine site for a decade. Even Newmont officials, though, say that after months of negotiations and plenty of bad press they see a victory for Mr Yudhoyono’s government in its struggle to convince foreign investors to brave what remains a fraught investment climate. “It’s a great outcome,” one senior Newmont official insisted on Tuesday. “The government is reaffirming its commitment to a climate that is conducive to investment and a climate that is fair to investors. It’s very good for the government.” | ||||||||
February 15, 2006
berita ekonomi 