Will Indonesia debunk the market pessimism?

Jakarta Post -The year 2013 still saw Indonesia at the center of global attention, being hailed as the largest economy in Southeast Asia for successfully maneuvering out of global recession and maintaining both economic and political stability on a longer term. The archipelago was blessed with a booming middle class and increased domestic consumer spending in the short and medium term while managing to book all-time high investments ,which mostly came from direct foreign ventures, thus, making the nation’s status as the emerging power in the global economy seem difficult to match.

However, the last quarter in 2013 proved to be more challenging than expected and several hurdles were presented for Indonesia. Inflation climbed to 8.4 percent at the end of the year — nearly double the 4.3 percent in 2012 — interest rate hiked and gross domestic product (GDP) growth was estimated to have fallen from 6.2 percent to 5.6 percent, according to a Standard Chartered research.

In addition, Indonesia’s trade deficit jumped to US$2.3 billion for the July-September period as imports remained strong while exports shrank due to the slowdown in China and continuing troubles in Europe and the US, and finally, the weakening of rupiah against US dollars raised combined fears that the once stellar-performing Southeast Asian economy could be hitting a wall so soon.

According to the World Bank, Indonesia will see a slower economic growth in 2014 and faces tough economic risks. The risks to growth are high as the needed adjustments to weaker external balances continue to play out in the domestic economy, and as a result of shifting economic conditions and policies internationally (notably the US Federal Reserve “tapering”), which may further tighten external financing conditions. Indonesia is also expecting a considerably slower investment flow in 2014, as companies may hold off during the election year, providing even less stimulus to an economy challenged with current-account deficit. [Click here for full article…]

Indonesia pushes for more women in power

See video here: http://www.youtube.com/watch?v=tUKiZ05gQm4

Australia News Network –  More than 80,000 women will be running for office in this year’s presidential election in Indonesia, encouraged to be part of the country’s plan to have more women in power.

A women’s political training program funded by the United States is being run twice in five different regions of Indonesia, including some of its most remote areas.

Organisers have been stunned by the turnout to these workshops, with some women travelling for hours just to attend.

Around 170 women are learning to run for office in a conference hall of a hotel in Banda Aceh, Indonesia’s northernmost point.

While their discreet Islamic dress might signify an unlikely group to step up and take charge, their vision is more radical.

“By becoming a legislative member, I have more chances to fight for women, because I would be the one who creates the law, and monitors it,” United Development Party candidate, Sri Gustini, said.

Michelle Bekkering, the International Republican Institute’s resident country director in Indonesia, is the lead trainer of the workshops.

She has spent 12 years in Washington’s hot-house politics, including time on former president George Bush’s national security council.

Ms Bekkering says she has never worked with a more attentive group of women.

“They soak everything up … they come early, they stay late, they write everything down,” she said. [Click here for full article…]

Indonesia clerics issue fatwa against illegal wildlife trafficking

Seven-year-old Nico Zambrano looks at an illegal stuffed Leopard confiscated by the U.S. Fish & Wildlife Service, April 23, 2006 during the 17th annual Earth Fair in Balboa Park in San Diego, California. The fair features over 200 environmental, earth-friendly and quality-of-life exhibits. (UPI Photo/Earl S. Cryer)

UPI – Indonesia’s highest Muslim clerical body, the Indonesian Council of Ulama, has taken an unprecedented move in issuing a fatwa against the illegal trafficking of endangered species.

A fatwa, or edict, is essentially a call to action. In this instance, religious leaders have called on Indonesian Muslims — the largest population of Muslims in the world — to play their part in protecting threatened species like tigers, rhinos, elephants and orangutans. That means conserving vulnerable habitat and curbing illegal wildlife trafficking.

“This fatwa is issued to give an explanation, as well as guidance, to all Muslims in Indonesia on the sharia law perspective on issues related to animal conservation,” Hayu Prabowo, chair of the Council of Ulama’s environment and natural resources body, told National Geographic. “People can escape government regulation, but they cannot escape the word of God.”

Earlier this year, the United Arab Emirates’ General Authority of Islamic Affairs & Endowments issued a fatwa forbidding Muslims from participating in a space mission to Mars. [Click here for full article…]

Indonesian Tourism Needs Improvement

Tempo.co – The Indonesian Center of Reform on Economics (CORE) said Indonesian tourism is left behind other countries in Southeast Asia. Muhammad Faisal, senior researcher at the CORE, said there are three indicators: the number of visits, revenues and the growth of both indicators.

Out of the number of visits, Indonesia is considered left behind of neighboring countries in foreign tourists. Malaysia in 2011 could attract 24.7 million foreign tourists. “The government may announce this year that foreign tourists coming to Indonesia increase to 8.8 million people and break the record, but try comparing it to Malaysia,” Faisal said yesterday. Malaysia is currently the world’s ninth biggest host country for foreign tourists.

Faisal said that in 2013, Indonesia earned US$10 billion from foreign tourist visits, which is lower than Thailand that could earn US$30.9 billion in 2011. Faisal addressed this situation as ironic as Indonesia should have been able to generate more revenue with its abundant natural wealth.

The rate of growth of those two indicators is also still very small. Revenue growth from foreign tourist visits for ten years (2001-2011) is only seven percent. “Growth of visits is only around four percent. It is even lower than Cambodia which grows five times faster,” said Faisal. [Click here for full article…]

Gerindra welcomes Risma to the party

Jakarta Post – A Gerindra Party executive has said that the party is ready to welcome Surabaya Mayor Tri Rismaharini if the embattled local head decides to leave the Indonesian Democratic Party of Struggle (PDI-P).

Gerindra deputy secretary Aryo Djojohadikusumo said that Risma could be tapped to be the running mate of party chief patron Prabowo Subianto in the presidential election.

“Gerindra offers equal opportunity to all members to possibly becomePak Prabowo’s running mate,” Aryo said as quoted by tribunnews.com.

In the past few weeks, Risma has made headlines due to her public feud with her deputy, Wisnu Sakti Buana.

Risma’s squabble with Wisnu originated from her questioning the legitimacy of his appointment. [Click here for full article…]

Indonesia hopes China will be patient over South China Sea

ANTARA News – Indonesia hopes that China will be patient over the South China Sea issue to maintain stability, peace and mutual welfare in the region.

“I am sure Chinas principle is to maintain mutual harmony. While Indonesia, particularly the Indonesian Military, believes that China can be more patient in resolving the South China Sea issue,” the Commander of Indonesia Military General Moeldoko stated here, on Wednesday.

The TNI Commander who held the meeting with Military Center Commission Deputy Chairman, General Fang Changlong, has stated that Indonesia has a neutral stance relating to the South China Sea issue.

Moeldoko added that the Indonesian Military keeps monitoring the development in the South China Sea issue.

“The Indonesia Military has taken a neutral stance. We are not supporting any party disputing over the waters,” Moeldoko pointed out.

Moeldoko explained that the Indonesia Military appreciates Chinas stance to maintain harmony in the region by solving the problem through a peaceful dialog. [Click here for full article..]

GE picks Indonesia to launch $1.4 billion new business

Jakarta Post – American technology company General Electric (GE) Co. has stated that it has chosen Indonesia as the country in which to launch its US$1.4 billion distributed power business, which concentrates on smaller-scale energy generation.

GE officially introduced its distributed power business in Jakarta on Tuesday to tap into the archipelago’s future energy blueprint.

GE vice chairman John G. Rice pointed out that Indonesia was “the perfect place” to develop distributed power technology given that roughly a quarter of the 240 million people living across the archipelago of at least 9,000 islands had no access to electricity.

This, he added, created a sector in which GE could deploy its distributive power technology, which could generate between 100 kilowatts (kW) to 100 megawatts (MW) of power onsite.

“The population is also very distributed, which makes Indonesia a big market,” he said, adding that GE had been in Indonesia for at least 70 years.

He further said the Indonesian government’s aim to shift the weight off fossil fuels to renewable energy was a supporting element for conducting pilot projects in the country.

“Therefore, Indonesia is a very strategic host country for pilot projects to demonstrate the efficiency of our technology,” he told The Jakarta Post.

Indonesia’s current energy mix comprises approximately 49 percent fossil fuels, which the government aims to reduce to 25 percent by 2025 based on the increased contribution from renewable resources.

Rice added that “a part” of the $1.4 billion that the Schenectady-based company was investing over a four-year period to get the new business up and running would go to pilot projects in Indonesia. [Click here for full article…]

TNI eyes closer cooperation with China

Jakarta Post – The Indonesian Military (TNI) asserted its readiness to cooperate with any country, including China, to maintain stability in the region.

“The TNI is ready to cooperate to maintain regional security based on the principles of mutual respect and equality,” TNI chief Gen. Moeldoko said during a meeting with the People’s Liberation Army (PLA) chief of general staff, Gen. Fang Fenghui, as reported by Antara news agency on Tuesday.

During the meeting at the PLA headquarters, Moeldoko said he expected that good bilateral relations would also increase military-to-military cooperations.

“Indonesia and China agreed to become strategic partners in 2005, which was followed by the signing of the Strategic Partnership Action Plan in 2010 as well as the Joint Communique,” he said on Tuesday, the second day of his five-day visit.

Both countries upgraded the strategic partnership to become more comprehensive in 2013.

“In the defense sector, Indonesia and China agreed on the Defense Consultation Forum in 2007 and defense industrial cooperation in 2011,” Moeldoko said.

China, for example, agreed to assist Indonesia in the local manufacturing of the C-705 anti-ship missile in a transfer-of-technology scheme.

Moeldoko, who was installed as TNI chief on Aug. 30, 2013, said cooperations between both countries included visits by high-ranking officers, military service student exchanges and joint anti terror exercises.

The Indonesian Army’s Special Forces (Kopassus) and the Indonesian Air Force’s Special Forces (Korpaskhas) have held joint exercises with their Chinese counterparts. [Click here for full article…]

Indonesia may ease taxes on concentrate exports

BNAmericas – The Indonesian government is expected to ease a controversial tax on mineral concentrate exports for companies that plan to build smelters in the country, according to press reports.

In January, Indonesia implemented new regulations for the mining sector, which included a ban on certain ore exports and an incremental export tax on concentrates, starting at 25% and increasing to 60% by 2H16.

Indonesia is the largest nickel exporter in the world, accounting for 18-20% of global nickel supply, and the new regulations will affect the market balance and support the price. The country is also a major exporter of bauxite, copper and tin.

The average value of Indonesia’s ore and concentrate exports was about US$500mn/month from January to October 2013, according to central bank data cited by Reuters.

“The export tax can be changed. For those who have seriously committed to building smelters, we will ease it,” R. Sukhyar, director general of coal and minerals at the mines ministry was quoted as saying by Reuters.

On February 21, the government issued nine export permits, but US-based companies Freeport McMoRan Copper & Gold (NYSE: FCX) and Newmont Mining (NYSE: NEM), which together account for 97% of domestic copper production, were not on the list. Any disruption to their exports could have a significant impact on the copper market.

Freeport has a production target of around 500,000t of copper at its Grasberg operation in Indonesia this year, while Newmont is planning 95,000-110,000t this year, increasing to 145,000-160,000t in 2015 at its Batu Hijau mine, according to the companies’ latest corporate reports. [Click here full article…]

Indonesia Ratifies UN Nuclear Terrorism Convention

Indonesian police participate in an anti-terror drill at the National Nuclear Energy Agency (Batan) complex in Serpong, Tangerang, on April 23, 2013. (AFP Photo/Adek Berry)

Jakarta Globe – Indonesia ratified an international convention against nuclear terrorism on Tuesday, citing “unpredictable” terror threats that may target the country’s nuclear facilities amid its sluggish but persistent attempt to develop nuclear energy.

 

The House of Representatives endorsed the Law on the International Convention for the Suppression of Acts of Nuclear Terrorism during a plenary session in Jakarta on Tuesday.

 

“The endorsement of the nuclear terrorism convention paves the way for international technical assistance in the fields of capacity building and infrastructure development — with regard to nuclear safety, coordination and institutional reinforcement, as well as information security,” Agus Gumiwang, deputy head of the House’s Commission I on information, defense and foreign affairs, said after the plenary session.

 

The convention specifies crimes such as obtaining radioactive materials through illegal means and engaging in activities causing damage to nuclear properties.

 

“The endorsement of the convention will be beneficial to the nation’s interests, as well as proving Indonesia’s commitment to maintaining the world’s peace and security, which is in line with Indonesia’s independent and active [foreign] policy,” Agus said.

 

Indonesia becomes the 93th member state of the United Nations to ratify the convention. Australia, Britain, China, Germany, India, Japan and Russia are party to the treaty, while the United States has signed the convention but has yet to ratify it. There are a total of 115 signatories, while Indonesia first declared its commitment to ratify the convention in 2012. [Click here for full article…]

Scholars, intellectuals endorse Prabowo’s bid

The Jakarta Globe – A group of university professors and intellectuals announced on Wednesday its collective endorsement of Gerindra Party presidential candidate and chief patron Prabowo Subianto, giving the retired army general another moral boost ahead of the upcoming presidential election. Former Bandung-based Padjadjaran University rector Yuyun Wirasasmita, who read the group’s endorsement during a gathering […]