Yudhoyono Calls for Reform of Indonesia's Police and AGO

The Jakarta Globe, Kinanti Pinta Karana

President Yudhoyono addressed the nation in response to his fact-finding team's report on the controversial case against antigraft deputies Bibit S Riyanto and Chandra M Hamzah.

President Susilo Bambang Yudhoyono outlined various options for settling the controversial case against two suspended Corruption Eradication Commission (KPK) officers, but did not set out a clear course of action in a speech on Monday night.

The president noted that both the police and the Attorney General's Office have the power to drop the case.

He said he initially felt it should continue: "If we want to end the debate on whether Bibit S Riyanto and Chandra M Hamzah are guilty or not, the right forum is the court. At first, that's what I thought."

Later, he said, a clear lack of public trust in the nation's legal machinery caused him to reconsider.

But the president stopped short of calling for the case to be dropped, saying instead that law enforcement authorities must clean house.

"I have ordered the Attorney General and the National Police to conduct reform in their own institutions," he said, adding that he wanted the KPK to do the same.

Yudhoyono said the Rp 6.7 trillion (about $700 million) spent on the equally controversial bailout of Bank Century must be returned to the government.

"I will take internal actions on the Bank century case and speed up the legal process of Bank Century's management to return the Rp 6.7 trillion to the country," he said.

Still, he said, the bailout must be understood as part of the global financial crisis that was raging in November 2008, a time when some feared the collapse of large banks could destroy national economies.

"What the government and central bank did in November 2008 must not be separated from the context," said Yudhoyono.

Activists and analysts have speculated that the case against Bibit and Chandra might be an effort to keep the KPK from investigating possible irregularities in the Bank Century rescue.

Hours of wiretapped phone conversations played in court earlier this month appeared to reveal a conspiracy against the two KPK deputies by police, prosecutors and the brother of a fugitive graft suspect.

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Suspended Corruption Eradication Commission deputy Chandra M Hamzah, right, warily watching President Susilo Bambang Yudhoyono’s nationally televised speech at the commission’s office in Jakarta. (Photo: Safir Makki, JG)

SBY: 'I Want to End the Fighting' Over Indonesia Antigraft Case

The Jakarta Globe

President Susilo Bambang Yudhoyono has signaled that he wants the controversial criminal case against two senior officials from the Corruption Eradication Commission to be resolved out of court.

While Yudhoyono is not scheduled to announce his position on moves by the National Police and Attorney General’s Office to put the two anti-corruption officials on trial until tonight, he told a gathering of the chief editors of 75 media organizations on Sunday night that the growing crisis was hurting the country.

“An out-of-court settlement is fair, with significant improvements in all law enforcement agencies. I want to end the fighting among [the] three law enforcement institutions, to eradicate corruption together,” Yudhoyono said. “I have talked to the AGO and the police about using their right to deponering. But I leave it up to them to decide.”

“Deponering” is a Dutch legal term that means to discontinue a case in the public interest.

Last week, a fact-finding team appointed by the president submitted a 31-page report on the case. The team concluded that there was insufficient evidence to warrant prosecuting Bibit Samad Rianto and Chandra M Hamzah, the suspended deputy chairmen of the anticorruption commission, known as the KPK, for extortion and abuse of power.

After receiving the report, Yudhoyono said his cabinet — and the National Police and AGO, both of which were pushing for prosecution — would study its recommendations and respond today. But he warned the public, outraged by an apparent plot by police and prosecutors to frame the KPK officials, that he would not overstep his authority and unilaterally order the case to be halted.

“I don’t want to weaken an institution, especially the KPK, which has a very important role in fighting corruption,” he said. “That is why, from the beginning, I did not want to enter an area that is not part of the president’s authority. For me, so that there is certainty, the one who decides what is right or wrong is the courts. But if there isn’t enough evidence, don’t proceed to court.”

“I’m trying not to misuse my authority because it would destroy our Constitution. The Constitution has already limited the authority of the president,” he added.

Separately, he said he would support an investigation into the central government’s Rp 6.7 trillion ($710 million) bailout of PT Bank Century last year.

Justice Minister Patrialis Akbar last week denied rumors that some of the bailout funds were diverted to Yudhoyono’s re-election campaign. “Open everything, because someone said the funds were connected with the legislative and presidential elections. Please PPTAK, please BI, open everything,” he said, referring to the Financial Transaction Reports and Analysis Center and Bank Indonesia.

The president said he would also announce his position on the Bank Century case tonight, noting that the results of the Supreme Audit Agency’s investigation of the bailout would be submitted to the House today.

Corruption watchdogs have expressed skepticism that Yudhoyono would order the KPK case to be halted. But Hikmahanto Juwana, a fact-finding team member, said on Sunday he was confident Yudhoyono would follow the team’s recommendations. “He must also consider the broader political implications of his actions, and not just a narrow legal case.”

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Sri Mulyani Aims For Overhaul of Indonesia's Bureaucracy

The Jakarta Globe, Camelia Pasandaran

Mahendra Siregar, chairman of Indonesia Eximbank’s board of directors, Finance Minister Sri Mulyani Indrawati and Trade Minister Marie Elka Pangestu talk at the official launch of the Indonesia Eximbank in Jakarta on Tuesday Sept 1, 2009. (JP/R. Berto Wedhatama)

Claiming to have improved the performance of the Finance Ministry’s bureaucracy, the government plans similar reforms in 12 other state institutions next year, Finance Minister Sri Mulyani Indrawati said on Friday.

The agencies targeted include the National Development Planning Board (Bappenas), the Attorney General’s Office, the National Police, the Defense Ministry and the Justice and Human Rights Ministry, she said at a briefing on bureaucratic reform at Sahid Jaya Hotel in Central Jakarta.

To gain ground in the crusade against bribery and corruption within state institutions, Sri Mulyani said, the government would focus on nine programs, including increased pay for civil servants, management reform, the eradication of overlapping duties and retooling human resources.

The government, she noted, had already raised civil servant salaries by 21 percent to a total of Rp 161.7 trillion ($17.14 billion) to make officials less susceptible to graft.

“People equate reform to better remuneration. Reform is not only about remuneration,” Sri Mulyani said.

“Many employees complain that salaries are insufficient,” Sri Mulyani said, adding that though salaries are small, most civil servants receive stipends and perks, such as cars so they can perform their duties and living allowances. But stipends are sometimes not equally distributed, she said.

“The state might pay too much to an employee who does little besides joining flag-raising ceremonies. Salaries should be set based on workload and risks.”

She acknowledged that investigations within her ministry had resulted in disciplinary sanctions for 1,961 personnel. They had also revealed a host of methods used to transport bribes.

“Money was being carried in socks, among other methods. At least 150 employees were dishonorably discharged,” she said, adding that punishments also included demotion.

The Finance Ministry collects 75 percent of the country’s revenue, mainly from income and excise taxes. Sri Mulyani has won renown for her courage in reassigning thousands of employees and for overseeing a complete overhaul of the directorates general within the ministry, namely those overseeing customs and excise, state treasury and taxes.

The finance minister also stressed the need for strict supervision and zero tolerance of violations like bribery that could bring down organizations and destroy the public’s trust.

At the same briefing, Home Affairs Minister Gamawan Fauzi noted that part of the problem was employees occupying positions they were not qualified for, with many taking top positions simply because of seniority.

“After being given that [top] position, only then does the person go back to school to meet the needed criteria. They should be qualified first before occupying the position,” Gamawan said.

The State Ministry for Administrative Reform has set 2011 as the target to conclude the bureaucratic reform programs.

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Minister to focus on micro credit

The Jakarta Post, Jakarta | Sat, 11/21/2009 10:56 AM

State Minister for Cooperatives and Small and Medium Enterprises Syarifuddin Hasan said he would focus on the distribution of micro credits (KUR) to increase fund absorption next year.

"We will do our best to accelerate the distribution of Rp 10 trillion (US$ 1.06 billion) in KUR credits to small and medium-sized enterprises (SME) next year," the minister said in Makassar, South Sulawesi, on Saturday as quoted by Antara news agency.

He said that the main problems that had to be solved in the distribution of KUR credits included lack of publication of the program, high interest rates and tight requirements imposed by banks.

"We will eliminate the problems so that the distribution of the funds would not be hampered," the minister said.

His ministry would in the near future establish coordination with executing banks and involve private banks in the distribution of the credits, he said.

"We have also discussed the matter with Bank Indonesia to minimize the requirements that have increased the burden of business players," he said.

RI considering request for extended participation in maritime task force

Antara News, Saturday, November 21, 2009 04:38 WIB

Jakarta (ANTARA News) - The government is considering the UN request for the Indonesian military (TNI)`s extended participation in the Maritime Task Force at the United Nations Interim Force in Lebanon (UNIFIL).

"It is true that we have received a request from the UN but we are still considering it," TNI Chief of Staff for General Affairs Vice Admiral Didik Heru Purnomo said at a function here on Friday to greet the arrival of Indonesian warship KRI Diponegoro-365 from joining the task force in Lebanon for six months.

He said his side would thoroughly evaluate TNI`s activities in the UN peace mission including in Lebanon. "We will first evaluate the activities as a whole. We will consider everything."

But he added that the TNI would prepare everything if the government decided to continue the TNI`s participation in the task force.

KRI Diponegoro-365 arrived in Indonesia on Thursday after six-month mission in Lebanon. The UN has asked Indonesia to extend the warship`s mission for another six months or replace it with other warship.

During its mission based on UN Resolution No. 1701 KRI Diponegoro-365 carried out two main tasks, including maritime interdiction operations (MIO), namely to help the Lebanese Armed Forces prevent the smuggling of illegal weapons and increase its capacity.

Deputy Naval Chief of Staff Vice Admiral Moeklas Sidiq meanwhile said Indonesian warship KRI Frans Kaisiepo was most likely to replace KRI Diponegoro-365 in the mission.

Both KRI Diponegoro-365 and KRI Frans Kaisiepo are Dutch-made sigma class corvettes.

WHO official impressed by Indonesia`s disaster response

Antara News, Saturday, November 21, 2009 04:35 WIB

Jakarta (ANTARA News) - World Health Organization (WHO) Director General Margaret Chan admired the Indonesian disaster response in dealing with the 7.9-magnitude earthquake which struck Padang, West Sumatra, recently thanks to effective government coordination.

"The response to the quake in Padang had been made under effective coordination between the government, local communities, and many disaster response agencies," Margaret said here Friday.

She said coordination and cooperation between the people, government and the relevant organizations and institutions in disaster handling is extremely necessary for rapid and effective recovery efforts.

"Only in six weeks after the disaster, the situation is now calm and peaceful which significantly contributes to making rapid progress in rehabilitation and recovery efforts," she said.

Margaret added that the biggest challenge in disaster handling is posed by establishing effective and efficient coordination to help the quake victims as quickly as possible.

As natural disasters may strike everywhere and at anytime, under such circumstances the country where the disaster struck did not have to ask for foreign assistance, because normally help would automatically come from other countries without being asked.

She admired the disaster response from other countries which is a sign of solidarity from the people of other countries.

International humanitarian aid arrived in Indonesia without being asked, and it would be necessary to establsh effective coordination of the relevant authories in the distribution of the relief aid to the disaster victims.

The WHO director general had recently visited Padang for an inspection of the recovery and rehabilitation efforts in the disaster-hit areas.

President appoints 10 special staff, including 6 new faces

Erwida Maulia , The Jakarta Post, Jakarta | Fri, 11/20/2009 12:48 PM

President Susilo Bambang Yudhoyono has signed a presidential decree on the appointment of 10 special staff, six of whom are new faces.

Presidential spokesman Dino Patti Djalal told tempointeraktif.com on Thursday evening that all the special staff had signed a pact of integrity and performance contract.

He also said that the new staff had received directions over their future duties directly from the President at the Presidential Palace.

"The President has signed the decree. Let the State Secretary or the President himself announce the names," Dino said, refusing to mention the 10 names.

However, Palace sources say that Julian Adrian Pasha, deputy dean of the University of Indonesia's School of Social and Political Sciences, is appointed as the new spokesman for domestic affairs, after Andi Mallarangeng left to become Youth Affairs and Sports Minister.

Andi Arief, former activist of Democratic People's Party, is the President's special staff member for social aid and natural disasters. Velix Wanggai, an expert at the National Development Planning Agency (Bappenas), will assist the President on regional autonomy matters.

Colonel Ahmad Yani Basuki, an Army spokesman, is the President's special staff person for information and communications. Political observer Daniel Sparringa will assist him in the field of political communications. And Jusuf Wangkar is the President's special staff person on security affairs.

Old faces remaining in the ranks include Dino himself, the presidential spokesman for foreign affairs; presidential expert staff for legal affairs Denny Indrayana; Sardan Marbun, who has been assisting the President on social issues; and Heru Lelono.

Car sales recovering but new threat looms

Nani Afrida, The Jakarta Post, Jakarta | Wed, 11/18/2009 11:23 AM

Domestic car sales enjoyed a good month in October as 40 percent more cars were sold compared to a month before, signaling a steady move towards full market recovery. Producers, however, were not so sure.

The total number of cars sold in October reached 52,241, significantly up from 37,209 in September when sales suffered from a shorter period of working days due to the Ramadan holiday season.

Toyota Astra Motor (TAM) President Director Johnny Dharmawan Danusasmita said he had already predicted that car sales growth would jump in October.

“September was a short month because of the fasting month and the Idul Fitri holidays. That is why our sales in September were small,” Johnny said.

TAM is the subsidiary of PT Astra International, which as of October retained the biggest share of the market by controlling 58 percent of car sales in the country. Astra International sells cars manufactured by Toyota, Daihatsu, Nissan Diesel, Isuzu and Peugeot.

Astra’s head of public relations, Yulian Warman, said the company tried to boost sales growth, which had plummeted since last year due to the global financial crisis, despite the company offering various sales schemes to compensate.

“We offered discounts and insurance to attract customers,” Yulian said.

Overall, 389,711 cars, including those not related to Astra, were sold in Indonesia in the first 10 months.

Albeit down by 25.3 percent compared to sales performance in the first 10 months of last year, sales figures have been growing steadily each month, beginning in March, with the exception of September.

Johnny confirmed that car sales were on a positive trajectory for continued growth, especially as indicated by the October sales, which almost reached the same figure in October last year.

The positive trend, however, will face a threat next year, he said.

“Car sales growth will be affected by the upcoming regional government regulation on progressive taxes for cars. The regulation will hamper car sales growth next year,” he said.

The House of Representatives passed the law on regional taxes and levies in August, introducing new vehicle tax regulations by which car owners are to pay more tax for each additional private vehicle owned.

The maximum tax rate for a single owner is 10 percent of the value of the vehicle.

From the government viewpoint, it expects the progressive tax to help boost the revenue of local administrations to enable them to deal with rapidly worsening traffic conditions, in many big cities in the country.

Jakarta alone for instance, is home to more than 2 million private cars and 6 million motorcycles, according to the Jakarta traffic police.

The number of vehicles jamming the streets of the capital goes up by about 9 percent every year, dwarfing the expansion of its roads, which only rises 0.01 percent annually.

Isuzu Indonesia’s chief of sales operations, Supranoto Tirtodidjojo, expressed the same opinion, saying the implementation of the new law might cause a negative shock to car sales just like the one that hit after the global crisis.

“We have now enjoyed a sort of a rebound after the shock triggered by the crisis. So, our plan is to manage how to recover faster when a similar shock hits our sales once the progressive tax comes in,” Supranoto said

The Indonesian Automotive Industry Association (Gaikindo), which groups together the country’s car distributors, is now consulting with the government on how to arrive at the best way to implement the new law without major negative affects on the car industry.

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Boediono Supports The Reform over Polri and KPK

Kompas, Jimbon, THURSDAY, 19 NOVEMBER 2009

Vice President Boediono (PERSDA NETWORK/ BIAN HARNANSA)

ROME, KOMPAS.com — The vice-president, Boediono emphasizes, that he and President Susilo Bambang Yudhoyono support the reform program for law enforcing institutions, such as the Indonesian National Police (Polri), Attorney General's Office (AGO), and the Corruption Eradication Commission (KPK), along with court officials and advocates.

However, for the Polri and AGO, they must start with good intentions to improve themselves. Boediono stated to answer the question from Father Mudji Sutrisno in a meeting with Indonesians at Wisma Duta, the Indonesian Embassy, Rome, Italy, Wednesday evening local time.

"This matter is complicated. But we will support the reform if it can be done in Polri, AGO, and other institutions," said Boediono.

Boediono admits that there is a certain program for law enforcement that has recently been reformed and will be executed. But he didn't mention the program in detail.

According to Boediono, the suggestion from Team-8 (the independent fact finding and verification team for the case of Bibit and Chandra, formed by the president) will be executed soon after President Yudhoyono truly grasps its essence.

"Team-8 has submitted its recommendation and we've read it. I think the president will take heed of it.

Let's give time for the president to do the reform based on that recommendation," added Boediono. Boediono said that the finalization of the legal case of the non-active KPK high-officials processed by Polri and later by the AGO is still unclear.

"But, let's hope for the best. Hopefully truth and justice will be upheld. Sometimes, the way of truth, including in Indonesia, is not a straight line, but a winding one. But, in the end truth and justice will come. May God be with us," concluded Boediono.

Previously, at the start of his meeting with Indonesians in Rome, Boediono admitted that the legal case of KPK Vs. Polri was a heavy trial for the United Indonesia Cabinet II that had only started their work for several days. (Suhartono/C17-09)

OECD: Indonesia's growth underpinned by consumption, investment

Reuters, 11.19.09, 05:15 AM EST

PARIS, Nov 19 (Reuters) - Private consumption and a pick-up in investment will drive Indonesia's economy, with annual growth seen above 5 percent in the next two years, the Organisation for Economic Cooperation and Development said on Thursday.

While Indonesia is not a member of the OECD, it is seen as an up-and-coming G20 economy that may soon join the ranks of the BRICs, Brazil, Russia, India, and China, given its large domestic market, rich resources, and growing appeal to investors.

'Domestic demand should continue to be the main driver, supported by a recovery in credit extension and real income gains resulting from ongoing disinflation and falling unemployment,' the OECD said in its semi-annual economic outlook.

'Investment is expected to pick up due to diminishing slack and an improving economic environment.'

The OECD forecast growth would accelerate from 4.5 percent this year to 5.3 percent next, and 5.6 percent in 2011.

Indonesia's government has forecast growth of 4.3 percent this year, and 5.5 percent in 2010.

Indonesia Lifts Import Duty on Materials for Key Industries

The Jakarta Globe, Dion Bisara & Irvan Tisnabudi

Tourism is among the seven key service industries set to benefit from the lifting of import duties. (Photo: Adek Berry, AFP)

In a bid to boost investment and increase global competitiveness, the government on Wednesday scrapped the 5 percent import duty normally imposed on machinery and raw materials for seven vital service industries.

The Ministry of Finance said the regulation would take effect on Dec. 16 and would remain valid for two years before being re-evaluated.

The regulation covers transportation, telecommunications, public health, tourism and culture, as well as supporting services for mining, construction and ports and harbors.

Anggito Abimanyu, the Finance Ministry’s head of fiscal policy, said a similar tax break had been given to the manufacturing industry as part of the government’s Rp 73.3 trillion ($7.9 billion) fiscal stimulus package this year.

It was intended to help domestic companies compete in the global market and to attract investment.

“We decided to scrap the import duties for manufacturing industries to encourage domestic industries to open new plants or businesses,” Anggito said.

Jeffrey Mulyono, the head of the coal and geothermal commission at the Indonesian Chamber of Commerce and Industry (Kadin), said he welcomed the move.

“The existence of these [seven service industries] should be supported and [they should] have their taxes lowered to the lowest level possible, which will be beneficial for the local producers as well,” Jeffrey said.

“The Finance Ministry has finally fulfilled the wishes of local businesses by doing this,” Jeffrey added.

However, Erwin Aksa, the chairman of the Indonesian Young Entrepreneurs Association (Hipmi), said the removal of the import duty would not greatly benefit domestic industries until the government was able to provide sufficient basic infrastructure, especially power.

“As good as it is, the incentive will not immediately increase investment because what we really need now is electricity to be available and reliable,” Erwin said, referring to the power outages which have plagued the Great Jakarta area over the past two months.

Companies wishing to take advantage of the reduced import duty must contact the Investment Coordinating Board (BKPM).

RI textile firms hit by flood of imports

Mustaqim Adamrah, The Jakarta Post, Jakarta | Wed, 11/18/2009 9:34 PM

The share of domestic textile producers in the national market is going to plunge to 50 percent by the year-end, down from 65 percent last year, as a wave of cheap imports to hits the domestic market, an association says.

Ade Sudrajat, deputy chairman of the Indonesian Textile Association (API), said on Wednesday the dramatic drop in market share retained by RI firms was the result of a big jump in imported textile products flooding the market.

“That may cause domestic products to eventually control less than 50 percent of the national market share by the end of this year,” he told The Jakarta Post on the sidelines of a national textile conference.

Ade said the domestic market is now estimated to be worth Rp 70 trillion (about US$7.42 billion) by the end of this year.

“[This is because] the Trade Ministry has given too many import licenses to those [who claim to be] importers/producers, without verifications in the field,” he said, hinting that many of these textile imports might have been entering the country illegally.

Finance ministry now undergoing reform : Sri Mulyani

Antara News, Wednesday, November 18, 2009 00:13 WIB

Jakarta (ANTARA News) - Finance Minister Sri Mulyani said reform efforts currently being carried out in her ministry were aimed at increasing public confidence.

"I wish people would say `this is an institution I trust` when they see it. As simple as that," she said at the launch of "2009 Corruption Perception Index" at Hotel Atlet Century here on Tuesday.

Mulyani said the finance ministry was one of the institutions that had so far been frequently suspected as the most corrupt so that the public had lost its confidence in it.

In view of that, she said, the finance ministry felt it was necessary to make a mechanism with regard to public-related decision-making.

"Corruption is a conflict of interest so that it has to be fought together," she said.

She said corruption may be classified into an upstream corruption that happens in the institution and a downstream corruption that happens outside the institution.

She said different ways would be needed to fight them.

She said to prevent upstream corruption a standard operation procedures would be needed as reference for decision-making.

"Every official must be able to explain the policy he/she produces in line with the standard operation procedure transparently before the public," she said.

To deal with downstream corruption she said the finance ministry needed to cooperate with external institutions such as the Corruption Eradication Commission (KPK) and the people.

"The KPK`s action so far had been quite a shock therapy which is good although it was actually not good if an external institution needed to do it," she said.

She said the finance ministry`s goal was maintaining and developing public confidence to reduce public suspicion towards the institution.

From 2006 to 2009, she said, the finance ministry had given sanctions to 1961 employees connected with corruption.

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Indonesian President Gives Ultimatum to PLN’s Top Boss

The Jakarta Globe, Yessar Rosendar & April Aswadi

A worker checking an insulated gas line at the PLN power station in East Jakarta. The utility company has failed to provide adequate power supply to service areas since September. (Photo: Safir Makki, JG)

Avisibly angry President Susilo Bambang Yudhoyono on Tuesday warned state utility PT Perusahaan Listrik Negara that if it could not end the nation’s power shortages — especially in Jakarta — then other independent companies may be given the chance to do so.

“PLN seems to have a limited capability on this issue, and it would be wrong if PLN wanted to handle [the nation’s power needs all alone]. Other companies should be given the opportunity through the correct regulations and policies,” Yudhoyono said after a limited cabinet meeting held with PLN directors on Tuesday.

He did not elaborate.

PLN currently enjoys a monopoly on generating and selling power in the country, although a recent regulation allowed independent power producers to sell power directly to producers in areas where there is currently no power supply.

After the meeting, Yudhoyono told reporters he had asked PLN president director Fahmi Mochtar whether PLN was capable of producing enough power to meet the country’s needs.

He said he also demanded that Fahmi explain whether PLN was capable of handling the current power-shortage crisis, and whether it had any backup plans in case its existing policies didn’t work. He did not describe Fahmi’s replies.

The meeting was also attended by Coordinating Minister for the Economy Hatta Rajasa, Energy and Mineral Resources Minister Darwin Saleh, State Minister for State Enterprise Mustafa Abubakar, State Secretary Sudi Silalahi and Jakarta Governor Fauzi Bowo.

Yudhoyono also said PLN needed to demonstrate good governance as a large business with trillions of rupiah in revenue.

“There should be no wrongdoing. If there is wrongdoing then the people will suffer,” he added, without elaborating.

Fahmi was questioned as a witness by the Corruption Eradication Commission (KPK) on Thursday over the procurement of an information technology system when he served as PLN’s director for the Jakarta area from 2003 to 2005. Fahmi approved the Rp 241.5 billion ($25.7 million) purchase without a tender process.

Yudhoyono emphasized that generating enough power to meet the country’s needs would be a priority of the government for the next five years. He asked for effective planning and coordination between PLN and relevant parties.

The president urged a coordinated effort among government ministries and departments to find the funding necessary to finance the production of enough power to meet demand.

Meanwhile, Yudhoyono said he planned to instruct all government agencies and state-owned firms to conserve more energy.

“We did it a few years back and it had a significant result,” Sudi said after the meeting. “The savings could cut up to 70 percent of electricity usage in all government bodies.”

Hatta said the government needed Rp 30 trillion to overcome the national electricity shortage, with Rp 5.6 trillion to solve the electricity problems in Jakarta alone. “We have calculated the required funds needed to overcome the shortage of electricity and later we will coordinate the sources of the funding from PLN, the state budget and regional government funds,” Hatta said.

Indonesia's Global Corruption Perception Ranking Lifts to 111th

The Jakarta Globe, Nivell Rayda

Indonesia’s efforts to eradicate corruption have started to bear fruit, after the country moved to 111th spot in a worldwide study conducted by Transparency International, which was released on Tuesday.

Indonesia scored 2.8 on the grading scale, with 10 being the cleanest, compared to the 2.6 scored last year. The improvement aligned Indonesia with nations such as Algeria, Djibouti, Egypt and Mali in the rankings.

Transparency International Indonesia secretary general Teten Masduki highlighted that the study was conducted before the arrest of three leaders of the Corruption Eradication Commission for various criminal charges, which many see as an attempt to undermine the body.

“It is possible that Indonesia would rank lower than in earlier years if the scandal had occurred before we conducted the survey,” he said.

Regarded as a benchmark to gauge the efforts of countries in eradicating graft, the Corruption Perception Index this year was conducted in 180 countries.

New Zealand was ranked as the cleanest country in the world, scoring 9.4 in the study, while Indonesia’s neighbor Singapore earned the number three spot with 9.2.

Somalia was named the most corrupt country in the world, scoring only 1.1 in the study.

WORLDWIDE CORRUPTION 2009

2009 - Transparency International uses estimates of the size and frequency of bribes as well as survey evidence and expert assessments.

Obama meets Yudhoyono to improve ties

Abdul Khalik, The Jakarta Post, Singapore | Sun, 11/15/2009 10:05 PM

President Obama meets with President Yudhoyono of Indonesia (ANP)

US President Barack Obama met with President Susilo Bambang Yudhoyono on the sidelines of the Asia Pacific Economic Cooperation (APEC) summit in Singapore on Sunday to boost bilateral ties.

Obama said that bilateral relations would be enhanced with the completion of a comprehensive partnership agreement that would cover a wide range of areas like education, working on clean energy issues, expanding the Peace Corps' presence in Indonesia and counterterrorism issues.

"As many of you know, I have some historic ties to Indonesia, but I am also extraordinarily impressed with the progress that Indonesia has made in developing its democracy," Obama said after the meeting.

"Indonesia is not only regionally important, but as a member of the G20, as one of the world's largest democracies, as one of the world's largest Islamic nations, it has enormous influence and really is, I think, a potential model for the kind of development strategies, democracy strategies, as well as interfaith strategies that are going to be so important moving forward," he added.

Yudhoyono, meanwhile, said that both leaders were committed to elevating bilateral relation at "higher level" through the comprehensive partnerships.

"I welcome also the future cooperation between Indonesia and the United States in various fields such as trade and investment, education and technology, climate change, food and energy security, countering communicable diseases and also counterterrorism and people-to-people contact," he said.

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APEC leaders call for new growth strategies

Google/AP, By JEAN H. LEE (AP)

U.S. President Barack Obama, third right, poses with fellow APEC leaders for a group photo at the Gala Dinner at the APEC Summit in Singapore, Saturday, Nov. 14, 2009. Pictured with Obama from left, Philippine President Gloria Macapagal Arroyo, Japan's Prime Minister Yukio Hatoyama, Indonesian President Susilo Bambang Yudhoyono , Singapore's Prime Minister Lee Hsien Loong and China's President Hu Jintao. (AP Photo/Takashi Ozaki, Pool)

SINGAPORE — Stimulus spending and other strong actions have set the stage for global economic recovery, but nations must push ahead with free trade and investment to ensure growth, President Barack Obama and fellow Asia-Pacific leaders said Sunday.

Obama and 20 other leaders, meeting in Singapore for the annual Asia-Pacific Economic Cooperation forum, rejected all forms of protectionism and agreed on the need for a long-term growth strategy that takes into account the diverse needs of economies in a region stretching from Chile to China.

Recovery is not yet on solid footing and the region cannot go back to "growth as usual," Singapore Prime Minister Lee Hsien Loong said, reading from a joint statement by the APEC leaders.

"We need a fresh growth paradigm. We need a fresh model of economic integration," they said.

To that end, APEC members pledged to maintain their economic stimulus policies until a durable economic recovery has clearly taken hold. "We will pursue growth which is balanced, inclusive and sustainable to ensure a durable recovery that will create jobs and benefit our people," they said.

Nations must work toward "strong, sustainable and balanced global economic growth" in the post-crisis period with policies that expand opportunities for all sectors of society, including women and small business owners; take better care of the environment; and promote development while reducing poverty and ensuring security, they said.

There was no mention of currency rates in the final statement, despite finance ministers' calls for maintaining "market-oriented exchange rates." That was a reference to the Chinese currency, the yuan, which is kept artificially undervalued, making other currencies less competitive.

An earlier push for concrete goals for reductions of greenhouse gas emissions was cut out of the statement. A previous draft had pledged a 50 percent reduction from 1990 levels by 2050, but the final statement committed only to working toward "an ambitious outcome" at climate talks in Copenhagen, Denmark, next month.

APEC, which accounts for 40 percent of the world's population and 54 percent of global output, was created 20 years ago to promote greater trade and integration among Pacific Rim nations. Pledges are nonbinding, and the forum's scope has expanded to encompass issues such as climate change, energy and food security, and politics.

One key APEC goal is the creation of a free-trade area covering all 21 APEC economies — an ambitious undertaking that many acknowledge is years down the road.

There have been concerns that the U.S., the world's biggest economy, and other nations might turn inward as they grapple with the worst global financial crisis in decades.

But Obama and others reinforced calls for expansion of free trade rather than resorting to protectionist measures, and pushed hard for progress on talks to liberalize world trade.

They supported studies on the benefits of a future Asia-Pacific free trade area and pathways to realizing the broad pact.

It could take 10 or 15 years for a region as wide as APEC, with countries at such different stages of development, Taiwan's finance minister, Shih Yen-shiang, said this past week. Still, Shih said Taiwan endorses the free trade area as a long-term goal.

APEC must move "very, very incrementally and carefully," said Surin Pitsuwan, secretary-general of the Association of Southeast Asian Nations.

Leaders also stressed the need to invest in education, health care and employment training to ensure stability in the long term.

Following the APEC meetings, Obama was to hold a summit with all 10 ASEAN leaders, including military-ruled Myanmar. The leaders are expected to call on Myanmar's junta to hold credible elections, but a joint statement obtained by AP stops short of demanding the release of pro-democracy leader Aung San Suu Kyi and other political prisoners.

Associated Press writers Jim Gomez and Jae-soon Chang contributed to this report.

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APEC leaders attend a breakfast meeting in Singapore, Sunday, Nov. 15, 2009. (AP Photo/Shizuo Kambayashi, Japan Pool)

60th Anniversary of Indonesia and China Diplomatic Relations

Kompas, Jimbon, FRIDAY, 13 NOVEMBER 2009 | 6:46 PM

A child plays under Chinese national flags on display at a park in Beijing, as China marks its National Day, on Oct.1, 2009

SINGAPORE, KOMPAS.com - Indonesia and China agreed to mark the 60th anniversary of their diplomatic relations in 2010 as a "Year of Indonesia-China Friendship," presidential spokesman Dino Patti Djalal said here on Friday. He made the statement after a meeting between President Susilo Bambang Yudhoyono and Chinese President Hu Jintao at Marina Mandarin Hotel.

"The two leaders agreed to mark the 6oth anniversary of diplomatic relations between Indonesia and China next year as a ’Year of Indonesia-China Friendship’," he said. Djalal said on April 13 next year Indonesia and China would celebrate the anniversary with various activities to show the two countries’ close relationship.

The two countries’ good relationship has been marked by a strategic partnership agreement. "I could say that trade between Indonesia and China has surpassed the target of US$300 billion in value in 2008. So its development as well as the potential of trade and investment relations between the two countries have indeed been remarkable," he said.

President Hu opened the meeting by congratulating President Yudhoyono on his re-election. "He appreciated President Yudhoyono’s leadership in the past five years that had made Indonesia even stronger despite various challenges it had faced such as tsunami, monetary crisis, earthquakes and rising oil prices," Djalal said.

He said the Chinese government hoped Indonesia could play a bigger role in the international fourm and was ready to continue promoting the strategic partnership that President Yudhoyono had initiated several years ago. President Yudhoyono met with President Hu Jintao for about 30 minutes ahead of the Asia Pacific Economic Cooperation (APEC) summit here on November 14-15.

Besides with President Hu Jintao, President Yudhoyono is also scheduled to meet with Prime Minister Sir Michael Somare of Papua New Guinea and US President Barrack Obama on the sidelines of the summit.

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President: World needs balanced economic growth

Antara News, Friday, November 13, 2009 20:39 WIB | Economic & Business

Singapore (ANTARA News) - Indonesian President Susilo Bambang Yudhoyono said the world needed a new paradigm, namely balanced economic growth.

He made the statement here on Friday before around 500 business leaders at a CEO Summit held ahead of the Asia Pacific Economic Cooperation (APEC) summit.

"Let us seize the opportunity in the current crisis to correct imbalances by working together towards more balanced global and regional economic development," he said in his speech titled "Achieving Balanced Growth. What We Must Do."

He said it was important to maintain the Asian trade and investment open as well as between Asia and other parts of the world to overcome global imbalances.

"I am convinced businessmen who are represented here in this room would agree," he said.

The Indonesian head of state said to overcome imbalances in economic development surplus countries had to invest their resources in the most productive investment areas such as infrastructure, education and health to spread productivity.

"Countries suffering a deficit meanwhile have to save more and adopt structural changesn in an effort to reset the mode of unsustainable economic growth," he said.

President Yudhoyono also said the international community also needed to pay attention to countries calling for protection.

"We must face the fact that some countries are facing high unemployment," he said.

President Yudhoyono said the founders of the Asia Pacific Economic Cooperation (APEC) forum had been a step ahead in the area.

"Indonesia has always considered that APEC vision is not only an open region for liberalization and facilitation but also capacity development," he said.

President Yudhoyono said trade among APEC members was 40 percent of the total value of the world trade and following the implementation of free trade and investment the total value of the gross domestic product of its members had risen from 47 percent to 56 percent of the world`s GDP in the past 20 years.

"Furthermore, the value of 67 percent of trade among APEC members is even far bigger than that of the European Union," he said.

APEC which was established in 1989 in Canberra, Australia, now has 21 members.

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Economy accelerates faster, optimism returns

Mustaqim Adamrah, The Jakarta Post, Jakarta | Wed, 11/11/2009 10:06 AM

Driven by an increase in consumer spending, the country’s economic growth accelerated faster in the third quarter after losing speed for more than a year on the back of sluggish exports.

The period saw the economy expanding by 4.2 percent compared to the same period last year and by 3.9 percent from a quarter earlier, the Central Statistics Agency (BPS) revealed Tuesday.

The BPS recorded Rp 1,452.5 trillion (US$154 billion) in GDP in the third quarter this year, giving a total of Rp 4,131.1 trillion in cumulative gross domestic product.

Previously, yearly economic growth slowed down gradually, beginning with 6.4 percent in the second quarter of last year, 6.1 percent in the third quarter and 5.2 percent in the fourth quarter.

Subsequently the first quarter saw growth at 4.4 percent followed by 4 percent in the second quarter.

BPS said the acceleration in the third quarter was largely driven by government and household spending, which grew by 10.2 percent and 4.7 percent year-on-year respectively, prompted by the general election and the fasting season of Ramadan.

Investment also saw positive improvement, growing by 9 percent compared to a year before.

On the downside, exports and imports in the third quarter remained on a downward trajectory, contracting by 8.2 percent and 18.3 percent year-on-year respectively.

BPS deputy chairman on balances and statistical analysis Slamet Sutomo said the country’s economy may grow slower in the fourth quarter as there would be no more impetus left to propel it higher.

Slamet’s statement differed from a forecast stated earlier this week by Finance Minister Sri Mulyani Indrawati. She said the economy might accelerate more to between 4.6 percent and 4.7 percent growth in the final quarter.

She argued that the country’s economy was heading towards full recovery in the final quarter, faster than most economies in the world due to Indonesia’s strong economic fundamentals.

This would consequently show an unusual growth trend, Mulyani said, instead of the traditionally slower growth in the fourth quarter. Overall therefore, full-year growth might reach 4.3 percent, she said.

Albeit predicting slightly slower growth in the final quarter, Slamet confirmed the economy would likely still grow above four percent.

The BPS also revealed Tuesday a survey on business players’ confidence on the economy, saying the Business Tendency Index increased to 112.86 in the third quarter this year, up from 110.43 in the second quarter, indicating improvements in business conditions.

An index result of more than 100 represents business optimism, Slamet said.

“In the third quarter, indices in business sectors were recorded above 100. Businesspeople have regained their confidence,” he said.

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High school students sing and sign at anticorruption event

The Jakarta Post, Jakarta | Thu, 11/12/2009 7:00 PM

No to corruption: Students from high school SMAN 13 of North Jakarta on Thursday perform the traditional Saman dance. They wore anticorruption stickers on their costumes as a statement against corruption in schools. (JP/Ricky Yudhistira)

Braving heavy downpours, students of state high school SMAN 31 in North Jakarta voiced Thursday their support for an anticorruption initiative involving a petition and performance.

The students were among participants of the "1,000 signatures to eradicate corruption in Indonesia" petition. They also took part in a songwriting and singing competition to promote justice.

Eight groups from eight classes signed the anticorruption petition and performed songs holding messages about justice for their peers.

"I think the anticorruption initiative is a great idea," student Yohanika Sari said.

The event was attended by members of Indonesia Corruption Watch (ICW) and the Corruption Eradication Commission (KPK), which has come under the spotlight following an alleged plot by the National Police to undermine it.

"We thank the support from SMAN 31 in the KPK’s fight against corruption," Yudi Purnomo from the KPK said.

Yohanika said she was unbiased about the situation between the KPK and the National Police.

"We demand justice," Yohanika said. (dis)

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Malaysia, Indonesia to rise above petty issues and strengthen ties

The Jakarta Post, Jakarta | Thu, 11/12/2009 10:51 AM

Sharing thoughts: Visiting Indonesian President Susilo Bambang Yudhoyono, left, speaks as his Malaysian counterpart Najib Razak looks on during a joint press conference at the latter's office in Putrajaya, outside Kuala Lumpur, Malaysia, Thursday. AP/Lai Seng Sin

Malaysia and Indonesia will not let petty issues raised by certain quarters to sour ties between the two nations but will instead further the work to strengthen the already close bilateral ties, Prime Minister Datuk Seri Najib Tun Razak said Thursday, Malaysian state news agency Bernama has reported.

Speaking at a joint media conference with visiting Indonesian President Susilo Bambang Yudhoyono, Razak said Malaysia appreciated the presence of foreign workers especially Indonesians in the country.

However, if they broke Malaysian laws, they would have to face the laws of the land, he added.

Meanwhile, Yudhoyono said he chose Malaysia as the first country to visit since his re-election as the Indonesian president because Malaysia is a friend, a neighbor and a strong partner in the development of the race.

HSBC Launches Yuan Trade Settlement Services In Indonesia

The Wall Street Journal

HSBC Holdings PLC (HBC) launched trade transaction services in Indonesia using the Chinese yuan, Xinhua news agency reported Wednesday, citing a senior HSBC official.

Vincent C. Sugianto, head of trade and supply chain HSBC Indonesia, said the service can only be conducted between Chinese firms authorized to make such transactions and their counterparts in the Association of Southeast Asian Nations, according to the report.

He said HSBC will provide various yuan transaction services in Indonesia, including trade financing, currency exchange between the rupiah and yuan, and export/import financing.

HSBC now offers yuan trade settlement services in six Asean countries, according to the report. The others are Malaysia, Thailand, Singapore, Vietnam and Brunei, the report said.

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President installs five deputy ministers, BKPM head

The Jakarta Post, Jakarta | Wed, 11/11/2009 11:10 AM

Welcome: President Susilo Bambang Yudhoyono (center) congratulates the new Investment Coordinating Board (BKPM) head Gita Wirjawan during an inauguration ceremony at the State Palace in Jakarta on Wednesday. Yudhoyono also inaugurated five deputy ministers in the ceremony. Antara/Widodo S. Jusuf

President Susilo Bambang Yudhoyono inaugurated five deputy ministers and the new chief of the Investment Coordinating Board (BKPM) on Wednesday morning at the State Palace.

The new top officials are Deputy Agriculture Minister Bayu Krisnamurthi, Deputy Transportation Minister Bambang Susantono, Deputy Trade Minister Mahendra Siregar, Deputy Public Works Minister Hermanto Dardak, Deputy Industry Minister Alex Retraubun and BKPM head Gita Wiryawan.

Gita's appointment as the head of the BKPM was announced at the same time as the Cabinet last month, but his inauguration was delayed. No reason has been given for the delay.

State Secretary Sudi Silalahi said Tuesday the five new deputy ministers all had solid professional grounding, in accordance with the 2008 State Ministries Law stipulating that deputy ministers be professionals in their fields.

Sudi said the inauguration of the five deputy ministers would be a first wave, as Yudhoyono planned to appoint at least half a dozen more deputy ministers.

Retailers expect recovery next year

The Jakarta Post, Jakarta | Tue, 11/10/2009 9:47 AM

Already resigned to the possibility of zero-growth in sales this year, modern retailers expect a quick recovery next year to return to double-digit growth as an improving economy bolsters people’s purchasing power, says an association.

The Association of Indonesian Retailers (Aprindo) said Monday next year would be much better for the industry than this year as the economy will probably not be affected by negative impacts of the global economic downturn, which hit industry sales this year.

“The retail sector has been affected the longest among other sectors. The global crisis is like a chain where we stand at the end of the line,” Aprindo executive director Tutum Rahanta said in a phone interview.

Aprindo groups together more than 100 modern retail companies, including the country’s biggest retail chains such as European giant Carrefour, Hero and Matahari.

It is estimated that Indonesia’s economy will expand by 4.3 percent this year, slower than the 6.1 percent last year, due to delayed negative impacts of the global economic downturn. But the economy is predicted to grow at full-swing next year on the back of partial recovery in the world’s major economies.

“We predict full sales to reach Rp 80 trillion [US$8.5 billion], nearly the same as last year’s overall sales. Sales could be better than this prediction but not more than 5 percent, [above the estimate]” Tutum said.

“In addition to the crisis, we also had a number of major factors and events this year that affected the retail market, including the presidential and legislative elections and natural disasters. Next year, there will be no more elections and the impact of the economic crisis will have completely faded,” Tutum said confidently.

JP/Irma

France-based Carrefour, currently with the largest modern retail market share in Indonesia, suffered a 4.06 percent drop in sales during 2009’s first nine months, falling to 662 million euro ($993.16 million) from 690 million euro in 2008.

Unlike Carrefour however, PT Hero Supermarket managed to post growth as Hero’s September sales hit Rp 4.97 trillion, which represented a 13.4 percent increase from a year earlier.

Hero is now operating 459 modern retail outlets, consisting of 34 Giant hypermarkets, 60 Giant supermarkets, 50 Hero supermarkets, 124 Startmart minimarkets and 191 Guardian health and beauty stores.

Similarly positive performance was achieved by PT Matahari Putra Prima, the operator of Hypermart supermarkets. The company’s sales during the first nine months of 2009 achieved 14.68 percent growth, with sales increasing from Rp 9.09 trillion in 2008 to Rp 10.43 trillion in 2009.

Despite the estimated overall zero-growth for the industry, Tutum said the retail sector was quite fortunate compared to other sectors like the automotive and manufacturing sectors, which had been hit very hard by the economic downturn.

The Indonesian Automotive Industry Association (Gaikindo), for example, said that car sales were expected to decline by 24.32 percent by the end of 2009, from last year.

“Everybody is still buying basic needs despite lower income, but more selectively,” Tutum said.

With recovery on the horizon, the association expects that expansion, in the form of new outlets, could start taking place early next year, although Tutum did not provide any figures on this.

Aprindo members now run about 8,500 outlets nationwide, about one thousand more than last year.

According to the Manpower Ministry, the modern retail sector employs about 350,000 workers. (bbs)

All women power

The Jakarta Post, Tue, 11/10/2009 6:57 PM

Australian Treasurer Wayne Swan (second right) talks with Finance Minister Sri Mulyani Indrawati (right),Trade Minister Marie Elka Pangestu (second left) and head of the National Development Planning Agency (Bappenas) Armida Alisjahbana before a bilateral meeting in Jakarta on Tuesday. (JP/R.Berto Wedhatama)

Robust local economy to fuel demand for air travel: INACA

Rendi A. Witular , The Jakarta Post , Jakarta | Tue, 11/10/2009 9:41 AM | Business

JP/Irma

A booming economy at the provincial level, coupled with an expected global economic recovery, is becoming the main driver of growth in the local airline industry next year, an association says.

Chairman of the Indonesia National Air Carriers Association (INACA) Emirsyah Satar told The Jakarta Post recently that because Indonesia’s economy remained heavily dependent on the local economy, local airline operators would tap more opportunities from business activities at the provincial level.

“This year, the legislative and presidential elections helped keep local airline operators afloat amid the global financial crisis.

But next year, the driver will be economic activities at the provincial level,” said Emirsyah who is also president director of state-owned flag carrier Garuda Indonesia.

Emirsyah forecast growth in domestic passenger traffic will reach as much as 10 percent this year and at least another 10 percent next year.

According to the Transportation Ministry, domestic passenger traffic reached 46.3 million flights in 2008.

Domestic flights account for 60 to 70 percent of all services provided by the country’s aviation industry.

Emirsyah also said international air travel was expected to start recovering next year from the current 8 percent decline in passengers and to reach upwards positive growth.

JP/Irma

The number of international passengers traveling in or out of Indonesia topped 3.37 million last year, according to the ministry.

A roadmap designed recently by the Indonesian Chamber of Commerce and Industry (Kadin) has forecast the revival of the provincial economy to help fuel national economic growth despite an expected sluggish international market, including international business travellers into Indonesia.

Kadin believes that increased economic activities have started to reach the provinces outside Java since 2007, and are likely to gain better momentum next year as more business infrastructure is expected to be built, coupled with stable security and political conditions.

While Jakarta and Java now account for 55 percent of the national gross domestic product (GDP), this trend is likely to diminish as North Sumatra, Riau and Jambi will play a greater role as economic powerhouses in agriculture, particularly in palm oil, according to Kadin.

East Kalimantan will strengthen to become a hub for mining, oil and gas along with the Riau Islands.

The lobby group also indicated a shift in the spread of financial benefits from accumulating mainly in Jakarta towards accumulating in other provinces outside Jakarta, as indicated by shrinking third party funds in Jakarta banks.

It was not until 2007 that Jakarta lost its decades-long dominance in contributing the lions share of bank’s third party funds, falling from 67 percent to 36 percent of the total.

Provinces in Sumatra and the eastern part of Indonesia now account for more of these funds, according to Kadin. This means

more people in these areas have managed to set aside some of their income in banks as they are getting more prosperous.

This reflects that Indonesia is rich in natural resources, including palm oil, coal, tin, gold, spices, nickel, gas, and oil and that more of this wealth is now being retained in the provinces.

President to leave for APEC summit

Erwida Maulia, The Jakarta Post, Jakarta | Tue, 11/10/2009 4:07 PM

President Susilo Bambang Yudhoyono is scheduled to leave Jakarta for Malaysia and Singapore on Wednesday for a week-long work visit.

In Singapore, the President will attend the Asia Pacific Economic Cooperation (APEC) Summit and a meeting between US President Barack Obama and Southeast Asian leaders.

Presidential spokesman Dino Patti Djalal said Tuesday that during the APEC summit Yudhoyono would deliver his view on balanced growth and his review of the target set in the 1996 summit held in Bogor, West Java.

On the sidelines of the summit, Yudhoyono will hold talks with Singaporean President SR Nathan, Prime Minister Lee Hsien Loong and Ministerial Mentor Lee Kuan Yeuw. Yudhoyono will also meet Obama for a bilateral meeting.

The President and his entourage will depart from Halim Perdanakusuma Airport in East Jakarta at 10:30 a.m. on Wednesday for Kuala Lumpur, where he is scheduled to hold talks with Prime Minister Najib Razak on bilateral relations. An Eminent Persons Group from the two countries will join the meeting.

The issues of Indonesian migrant workers and border disputes look to top the agenda of the meeting between leaders of the two neighboring countries.

Yudhoyono is slated to leave Singapore for Jakarta on Nov. 16.

Indonesia Economy Accelerates

The Wall Street Journal, By FARIDA HUSNA and I MADE SENTANA

JAKARTA -- Indonesia's pace of economic expansion accelerated in the third quarter, bringing the country closer to achieving the government's growth target of 4.3% this year.

Southeast Asia's largest economy grew 4.2% from a year earlier during the July-September period, the official Central Statistics Agency said Tuesday, compared with 4.0% growth in the second quarter, thanks to increased spending in consumption and investment.

The economy expanded 3.9% compared with the previous quarter, accelerating from 2.3% in the April-June period.

The median forecast of 11 regional economists polled by Dow Jones Newswires was for growth of 4.1% from a year earlier, while the median estimate of seven economists was for 3.9% expansion from the earlier three months.

The agency said that government spending rose 10.2% on year, household consumption increased 4.8% and investment spending gained 4.0%.

Write to Farida Husna at farida.husna@dowjones.com and I Made Sentana at i-made.sentana@dowjones.com

Export Expected to Down by 19 Percent This Year

Monday, 09 November, 2009 | 17:21 WIB

TEMPO Interactive, Jakarta: Finance Department projected up to 19 percent decrease in total export value this year from last year, which was blamed on the global economic slowdown.

Finance Minister Sri Mulyani said export could be down between 15 and 19 percent in 2009 after opening the 39th meeting of Study Group on Asian Tax Administration and Research in Bali on Monday.

The department reported export value in September was down 6.75 percent to US$9.83 billion from August or 19.92 percent from September 2008.

Director General of Taxation Mochamad Tjiptardjo said tax revenue was targeted at Rp528 trillion this year, while the collected tax up to the third quarter this year was Rp377 trillion or 65.44 percent of this year's target.

NI LUH ARIE SL

Indonesia, EU sign partnership agreement

Ary Hermawan, The Jakarta Post, Jakarta | Mon, 11/09/2009 4:06 PM

Indonesia and the European Union signed on Monday the Partnership and Cooperation Agreement (PCA), which the EU said was “the first of its kind to be signed with an Asian country.”

The agreement, signed by Indonesian Foreign Minister Marty Natalegawa and his Swedish counterpart Carl Bildt, whose country is currently holding the EU presidency, will serve as the legal framework and a guideline for deeper cooperation between the two parties in boosting trade and addressing issues like climate change and terrorism.

“Given the PCA’s comprehensive nature and content it will significantly enhance ties in terms of political profile, the scope of cooperation, and the range of dialog,” the EU said in a statement outlining the PCA. Previously, EU-Indonesia cooperation was based on the 1980 agreement between EU and ASEAN countries.

The Foreign Ministry said the PCA will prioritize cooperation in four areas; trade and investment, environment, education and human rights.

“Indonesia and the EU officially launched a human rights dialog today with the goal of regularly discussing cooperation and issues of mutual interest related to human rights.”

Trade relations between Indonesia and the EU have exceeded 20 billion euros and is growing at 6 percent per year, the ministry said, highlighting the importance of EU as one of Indonesia's largest export destinations.

The EU said it had begun channeling 15 million euros to Indonesia’s export agencies through its Trade Support Program to boost exports and refine trade policy. It will also launch the EU-funded Economic Cooperation Facility next year to help Indonesian firms meet the requirements of exporting and be more competitive in the global market.

Yudhoyono Replaces Indonesia Military Chiefs

The Jakarta Globe, Markus Junianto Sihaloho

Indonesian President Susilo Bambang Yudhoyono rides a military vehicle last month during a ceremony in Jakarta to mark 64th anniverasy of Indonesia's military. (Photo: Haryanto, EPA/Handout)

President Susilo Bambang Yudhoyono has unexpectedly replaced the heads of the Army, Navy and Air Force.

Army Chief of Staff Gen. Agustadi Sasongko Purnomo will be replaced by Commander of the Army Strategic Command Lt.Gen.George Toisutta; Navy Chief of Staff Admiral Tedjo Edhy Purdijatno will turn his position over to Defense Ministry Inspector General Vice Admiral Agus Suhartono; and Air Force Chief Air Marshal Subandrio will give way to Deputy Air Vice Marshal Imam Sufaat.

Army Spokesman Brig. Gen. Christian Zebua said on Saturday that he did not know the reason for the substitutions and noted that it is the president's choice when to replace top staff. He said the presidential decree stipulating Agustadi's replacement was issued on Friday.

All three chiefs are to be sworn in next week. Air Force Spokesman Air Commodore Bambang Sulistyo said that presented a challenge.

"We are working hard to prepare the inauguration ceremony because it is sudden notice," Bambang said..

Both Agustadi and Subandrio have served in their positions since December 2007, while Tedjo Edhy has commanded the Navy since July 2008. All are set to retire from their military careers in 2010. That is when a chief of staff is typically replaced.

Christian Zebua said the new three chiefs would likely become candidates to replace Gen. Djoko Santoso as chief of Indonesia's armed forces. Djoko will reach retirement age in 2010.

A source within the military who declined to be named said Agustadi, Tedjo Edhy and Subandrio would likely be given new positions as ambassadors.

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