Western Union Launches D2b Service To Indonesia

By Sonia K, Bruneidirect.com

Bandar Seri Begawan - The Western Union Company, a worldwide leader in money transfer services, yesterday announced the launch of the Western Union Direct to Bank (D2B) service to Indonesia at Sheraton Utama Hotel.

D2B allows senders to remit money directly to the recipient's account at designated banks in Indonesia.

Customers can enjoy the new service by simply visiting any Western Union locations at Baiduri Bank and filling up the Direct to Bank form.

Money will then be deposited to accounts with any of the participating banks in Indonesia, which include Bank Mandiri, Bank BII, Bank Niaga, Bank BNI, Bank BCA, Bank Lippo, Bank Danamon, Bank Permata, BRI and BRI Unit.

"The launch of D2B service in Brunei is in response to the growing market demand for such service," said Mr Sunil Balagopal, regional vice president, Western Union, Southeast Asia.

"Many migrants in the country want to send their hardearned money home. The new service is yet another option Western Union is providing its customers in transferring money, simple and fast."

Present as the guest of honour to launch the event was the Ambassador of the Republic of Indonesia to Brunei Darussalam, Mr Herijanto Soeprapto.

There are a total of 80,000 migrants in Brunei, of which approximately 35,000 are Indonesians. They are primarily professionals, construction and factory workers or domestic helpers.

Meanwhile, Mr Pierre Imhof, General Manager of Baiduri Bank, said: "Baiduri Bank became part of a global network by offering money transfer services to Western Union customers. This cooperation has allowed us to better address the needs of the migrant community in Brunei. With this latest offering, we are providing customers with even more choices and control in terms of sending and receiving money."

From now until March 31, customers can enjoy the service at a discount of B$3 off the regular fees. The first 500 customers to use the D2B service will also receive a free gift during the promotional period. To enjoy the offer, customers must quote "DTOBOFFER" while sending money.

In addition, Western Union Gold Card holders can earn five points by sending money from Brunei. These points can be accumulated to redeem free gifts such as luggage bags, radio clocks, disposable cameras and electric torchlights. Customers can apply for a Gold Card free of charge at any Baiduri Bank branch. Western Union has offered money transfers in Brunei since 2001 with the launch of Money I Minutes service, through which recipients can pick up the money within minutes after it is sent. Western Union began its collaboration with Baiduri Bank in 2005. Its services are available at all 10 branches in Kiarong, Kiulap, Kuala Belait, Serusop, Seria, Sengkurong, Supa Save Gadong, The Mall, Tutong and Yayasan.

The Mall and Supa Save Gadong branches are open seven days a weeks from loam to 10pm for added convenience to customers. -- Courtesy of Borneo Bulletin

PT Telkom plans to lower Internet Speedy access rate

Nusa Dua, Bali (ANTARA News) - State telecommunications firm PT Telkom is trying to reduce the rate of Internet broadband access called Speedy by 30 percent in 2007 and by another 20 to 30 percent in 2008, the company`s director Arwin Rasyid said here.

"The plan is part of efforts to participate in the provision of national Internet Protocol (IP) and in the development of local network," Arwin said on the sidelines of the Asia Pacific Regional Internet Conference Operation Technologies (APRICOT) 2007.

By doing so, he said, Internet access rate which is provided by Speedy will be equal to the rates offered by regional operators, he said.

"Cheap Internet access will give many positive impacts and great contribution to the economic and educational sectors," he said.

The role of telecommunications in the national implementation of information and communications technology (ICT) will create effective and efficient IP-based infrastructure through broadband wireline and broadband wireless, he said.

PT Telkom, he said, will take part in the development of broadband wireless-3G service program and Palapa Ring consortium project which is aimed to improve accessibility in the eastern parts of Indonesia.

PT Telkom is committed to the development of the e-business, e-education and e-government application services, he said.

"The objectives of the scheme is to create an acknowledgeable Indonesian community as well as to support telecommunications network development in 43,000 villages, 31,173 junior and senior high schools, 2,428 universities and 28,504 health centers in Indonesia by 2025," he said.

Beyond The Green Corporation

Imagine a world in which eco-friendly and socially responsible practices actually help a company's bottom line. It's closer than you think

Businessweek Online

Under conventional notions of how to run a conglomerate like Unilever, CEO Patrick Cescau should wake up each morning with a laserlike focus: how to sell more soap and shampoo than Procter & Gamble Co. (PG ) But ask Cescau about the $52 billion Dutch-British giant's biggest strategic challenges for the 21st century, and the conversation roams from water-deprived villages in Africa to the planet's warming climate.

The world is Unilever's laboratory. In Brazil, the company operates a free community laundry in a São Paulo slum, provides financing to help tomato growers convert to eco-friendly "drip" irrigation, and recycles 17 tons of waste annually at a toothpaste factory. Unilever funds a floating hospital that offers free medical care in Bangladesh, a nation with just 20 doctors for every 10,000 people. In Ghana, it teaches palm oil producers to reuse plant waste while providing potable water to deprived communities. In India, Unilever staff help thousands of women in remote villages start micro-enterprises. And responding to green activists, the company discloses how much carbon dioxide and hazardous waste its factories spew out around the world.

Read More ....

Outgoing WB rep in Jakarta says alternatives to CGI would be useful

The Jakarta Post, Jakarta

While supporting the winding up of the Consultative Group on Indonesia (CGI), outgoing World Bank country director Andrew Steer said dialog and discussions with the international donor community will continue to be useful for the nation's development programs.

"I think it would be a pity if there is not some kind of a forum to discuss important issues. I mean, Indonesia does need to think about how to bring in trade, investment, ideas and technology," he said Friday on the sidelines of a farewell meeting with The Jakarta Post.

"It would be useful if it is replaced by something, not necessarily one big forum. It could be thematic forums on infrastructure, on education, on health," he explained.

He said that while ministers had made it very clear that dialog will continue, "down below in the bureaucracy, there is a bit of confusion."

The government has said it has no plans to set up any kind of formal or regular forum as a substitute for the CGI, though it has stressed that it will continue to engage in dialog with international lenders and donors.

"No, we consider it unnecessary to establish another forum. But we may hold informal discussion forums, like seminars," said Mahendra Siregar, the deputy for international economic cooperation at the Coordinating Ministry for the Economy, during a discussion Tuesday on the future of Indonesian government financing after the CGI.

In farewell remarks on Indonesia, Steer said he was optimistic about the nation's economy, saying it was on the right track to fully recover from the 1997 Asian financial crisis.

"When I first came here about 4.5 years ago, the No. 1 item on the budget was interest (payments on foreign debts)," he said. "Indonesia had to allocate more than 25 percent of the budget to pay interest. Now, it only allocates 10 percent," he said.

Steer also praised Indonesia's achievements in reducing the debt-to-GDP ratio from 100 percent in 1999 to the current figure of 38 percent.

"It is also a remarkable fact that Indonesia has now launched what may be the biggest educational reform in the world," he said, adding that the government had doubled spending on education over the last few years. "If it goes ahead, it could have a remarkable impact."

However, Steer said Indonesia must be able to speed up the building of roads, rail links, ports and power plants to attract investment and boost growth. "It would actually be very interesting to know why education spending has rapidly increased whereas infrastructure spending has not," he said.

Association makes green pledge

The Jakarta Post

JAKARTA: The Indonesian Real Estate Association (REI) has pledged to reduce the environmental impacts of its business to decrease the chance of flooding in the city.

"The construction of green buildings will not be bad for business," association chairman Lukman Purnomosis said Friday as quoted by Antara.

Developers are also ready to build percolation pits to harvest rainwater in housing complexes in Jakarta, Bogor, Depok, Tangerang and Bekasi, he said.

"We will set aside more green areas in the housing complexes we establish."

Environmentalists have said developers who fail to preserve green space and tree cover are partly to blame for the increased flood risk in the city.

Lukman said the government needed to issue a policy on environmentally and pedestrian friendly design.

Walhi backs police fight against logging

The Jakarta Post, Jakarta

A leading environmental organization has praised police action against a company accused of illegal logging, but says it wants the authorities to take a harder line against the crime in the future.

The Indonesian Environmental Forum (Walhi) said the organization supported National Police chief Gen. Sutanto in setting up a police line around the production area of PT Riau Andalan Pulp and Paper (RAPP) after the company was suspected of illegal logging practices.

"This is what we have been waiting for. PT Riau Andalan Pulp and Paper has been exploiting the natural forest in Riau," Chalid Muhammad, the national executive director of Walhi, told reporters Friday.

"We hope the police will follow up this move by charging the company's directors as suspects," Chalid said, adding that the police chief should be consistent and not be afraid of officials who might be backing the company.

Troy Pantouw, PT RAPP's public relations manager, declined to comment on Walhi's accusations.

But he said that PT RAPP had always been careful in conducting its business and had always obeyed the government's regulations, including those on logging.

"Our company will be cooperative with the police and the authorities regarding the matter," Troy said when asked about the police's move to restrict the company's activities in Riau.

A coalition from the police's head office and the directorate general of forestry banned operations at the factory area of the company in Pangkalan Kerinci, Pelalawan regency in Riau on Thursday last week, Detik.com news portal reported.

PT Riau Pulp and Paper is a subsidiary of the Asia Pacific Resources International Holdings group, owned by Sukanto Tanoto, who is listed as Indonesia's wealthiest man by Forbes magazine.

Johny S. Mundung, Walhi executive director in Riau, also said that the police had made a big move against PT RAPP, one of the biggest pulp and paper players in the country.

He added that it was nothing new for the pulp and paper industry to use illegal logs from the country's forests.

According to Walhi, the pulp and paper industry in the country needs up to 27.71 million cubic meters of wood per year, some 80 percent of which comes from forests instead of industrial plantations.

UNESCO to assist Palembang puppeteers

Khairul Saleh, The Jakarta Post, Palembang

The United Nations' cultural organization is working with Palembang puppeteers to save their art and bring it to a global audience.

Two researchers from UNESCO, Karen Smith of Australia and Yuji Shimizu of Japan, were recently in the South Sumatra city to visit puppet theaters and document Palembang's rich culture, including puppet shows.

The results of the visit are scheduled to be displayed from April to June in Paris.

"The pictures and writings we get while we're in Palembang will be presented to the world, taking Palembang's puppet tradition international," Shimizu said.

During the trip, the two researchers visited the Sri Wayang Palembang theater, accompanied by Sumari, chairman of the Senawangi Foundation for puppetry and Eko Cipto, chairman of the Indonesian Puppet Masters Association.

Shimizu said they were interested in doing research on Palembang puppetry because it was such a rich cultural tradition that should be preserved.

"There is more to a puppet performance, there are so many things to learn from it," said the Japanese researcher, who lives in Paris.

Smith raised her concerns over problems faced by Palembang puppet shows, including a lack of teachers and singers.

"The Palembang puppet show is in desperate need of attention from the government and people. I'll deliver our report to UNESCO to ensure continued assistance for its development," she said.

During their visit to the puppet theater, the researchers were regaled with a show by puppet master Wirawan Rusdi, a son of one of Palembang's most noted puppet masters, the late Rusdi Rasyid.

Wirawan said he was grateful for UNESCO's assistance, since it offered a fresh chance for the struggling traditional art form.

He said he fell in love with puppet shows as a child. While his father did not specifically train him, he said recordings of his father's shows continued to provide inspiration.

Eko said he welcomed UNESCO's assistance to ensure that Palembang's puppet tradition continued to survive. He said few younger people were interested in becoming puppet masters.

"Currently, there are 15 theaters under the supervision of UNESCO," he said. Each theater receives financial assistance of Rp 500,000 (US$54) a month to help them survive.

Basically, Palembang puppet shows differ little from the more popular Javanese variety, including their gamelan instruments.

According to Ki Agus Amiruddin, the 65-year-old leader of the Sri Wayang Palembang theater, Palembang puppetry is a local adaptation of Javanese puppet shows.

The tradition is thought to have developed around the 19th century when Arya Damar, who was influenced by Javanese culture, ruled Palembang and helped develop a local puppetry tradition.

Just like Javanese puppet shows, Palembang puppet shows take their storylines from the epics Mahabharata and Ramayana.

The difference is that the shows are staged in the Palembang language and there are no strict rules on instruments and characters. The shows are usually given local touches, including stories about the Blambangan and Banter Angin kingdoms.

"There was even a green Hanoman who was born out of leaves, but now the character has gone," said Ki Agus, referring to a hero from the Ramayana.

'Sleeping giant' Papua unveils major development programs

Nethy Dharma Somba, The Jakarta Post, Jayapura

The Papua provincial administration will focus its development programs on rural areas where the largest number of poor live, the governor said Thursday.

Governor Barnabas Suebu said 80 percent of Papuans live in remote villages in poor conditions, if not absolute poverty.

He said the administration would provide each of the 2,700 villages in Papua province and 1,164 villages in West Papua province with Rp 100 million (about US$11,100). "This is not a gift from Santa Claus, it must be accounted for."

The Papua administration currently oversees autonomy funds for both Papua and West Papua provinces.

Before receiving the funds, villages must specify their needs and outline planned development programs, as well as detailing plans for supervising the use of the money.

Some of the main goals of the village development program are improving nutrition, education, health, local economies and infrastructure in the villages, as well as addressing issues such as gender equality, sustainable forest management and law and justice.

To finance the program, Suebu has shaken up the provincial budget. In the previous budget, 70 percent of funds were allocated for the state apparatus, 20 percent for infrastructure and public spending and the remaining 10 percent for rural development. In the new-look budget, the funds for the state apparatus have been slashed to 27 percent, while 25 percent will go for infrastructure and public spending and 45 percent for rural development.

The province also has launched a major infrastructure project, called the integrated transportation network. Under this project, the administration will build seaports, airports and a modern highway system, at a total cost of between Rp 50 trillion and Rp 100 trillion. Funding for the work will come from both the state and provincial budgets, as well as from overseas grants.

Suebu said a modern transportation system would spur economic growth in villages.

"Our farmers have to sell their products in the city, but to do this they have to pay a lot for transportation, which cuts their profit. That's a major drawback of a poor transportation system," he said.

The governor said the highway construction would begin this year, starting with the 3,000 kilometer Trans-Papua highway, which will connect Papua and West Papua at a cost of Rp 30 trillion.

To save costs, the project will make use of tailings from the PT Freeport mining company, with the end result expected to be of similar quality as concrete roads.

Suebu said with an integrated transportation network, isolated areas would be opened and more investors would come and awaken the "sleeping giant". "This is what we call the new Papua, a prosperous Papua," said the governor.

Among Papua's abundant natural wealth are proven gold and copper reserves of 2.5 billion tons in the PT Freeport mining concession area, 540 million cubic meters of potential commercial timber, nine million hectares of forest conversion areas for large-scale plantations, 2,000 miles of coastline, a sea area of 220,000 square km and 1.3 million tons of potential fishery products per year.

SBY tells local leaders not to scare off investment

Suherdjoko, The Jakarta Post, Semarang

President Susilo Bambang Yudhoyono has promised to further ease licensing procedures to ensure that businesses will be able to obtain permits within 50 working days.

"Business licensing is still a complicated issue. Previously, it took 151 days, but then we cut it to 97 days. Now, it needs to be reduced to a maximum of 50 days in all local government areas. Don't complicate things unnecessarily," Yudhoyono said when opening the national congress of the Young Indonesian Business Association (HIPMI) in Semarang, Central Java, on Tuesday evening.

During the event, which was also attended by House of Representatives Speaker Agung Laksono, Coordinating Minister for the Economy Boediono, and Indonesian Chamber of Commerce and Industry chairman Mohammad S. Hidayat, the President also urged regional administrations to refrain from issuing regulations that could stymie investment.

"The government has thus far annulled 750 ordinances as they conflicted with central government policies," Yudhoyono said.

The President urged local authorities to provide tax incentives to attract investors to the regions, and thereby create more jobs, increase local revenues and alleviate poverty.

He also urged businesspeople to put their money in prospective sectors, such as energy, transportation, property, infrastructure, telecommunications, banking and manufacturing.

For example, he pointed out that the food processing industry offered enormous prospects given Indonesia's large market of 220 million people.

He added that steadily increasing purchasing power made food processing even more attractive.

The President concluded by saying that he had asked the central bank to further cut its key interest rate and to keep the lid on inflation at around 6.6 percent.

Garuda, Merpati stakes up for grabs

Ary Hermawan, The Jakarta Post, Jakarta

The government is to sell up to 49 percent and 40 percent respectively of its stakes in carriers Garuda Indonesia and Merpati Nusantara this year in an effort to overhaul their performances and help plug the budget deficit.

Garuda and Merpati will be among nine state enterprises in which stakes will be sold this year under the privatization program. In addition, the government will also sell off its minority stakes in six other companies.

"The privatization committee has approved the divestment of stakes in nine SOEs and six publicly listed firms," State Minister for State Enterprises Sugiharto said Tuesday on the sidelines of a hearing with the House of Representatives' finance commission.

Besides Garuda and Merpati, the state will also sell stakes in state firms PT Jasa Marga, Bank Negara Indonesia, PT Wijaya Karya, PT ISI, PT Iglas, PT Cambrics Primisima and PT Permodalan Nasional Madani.

Meanwhile, the state will sell its entire minority stakes in PT JIHD, PT Atmindo, PT Intirub, PT PPLI, PT Kertas Blabak and PT Kertas Basuki Rahmat.

However, the privatization committee has delayed the planned divestment of stakes in PT BTN, PT Krakatau Steel, PT Dirgantara Indonesia, PT Kertas Padalarang and five consulting firms until comprehensive studies on the firms have been completed.

In the case of turnpike operator Jasa Marga, the government plans to gradually sell of up to a maximum of 49 percent of its 100 percent stake so as to strengthen the firm's capital base and finance the construction of the Semarang-Solo expressway in Central Java, the Gempol-Pasuruan expressway in East Java and the Bogor orbital route in West Java.

As for PT BNI, the government plans to reduce its stake in the bank from the current 99.12 percent to 51 percent through both a rights issue and the divestment of 20 percent of its overall stake.

Meanwhile, the state will sell its entire stakes in PT Industri Soda Indonesia (100 percent), PT Industri Gelas (63.82 percent) and PT Cambrics Primissima (52.79 percent).

The privatization program is officially expected to generate proceeds of Rp 3.3 trillion this year, but Sugiharto said the government might revise the figure upwards to Rp 4.3 trillion.

"We still have to discuss the plan with the House budget committee," he said.

While the government is upbeat about the divestment program, privatization remains a sensitive issue.

In response to the government's plans, lawmakers decided Tuesday to set up a working committee to scrutinize the proposed divestments before giving their approval.

"We don't want the case of PT Indosat to happen again," said Nursanita Nasution of the Prosperous Justice Party, referring to the fact that the state has been left with only a 14 percent stake in Indosat after about 42 percent of its shares in the company were sold to Singapore Technologies Telemedia Pte. Ltd. (STT).

Finance Minister Sri Mulyani said the government promised to keep the privatization process transparent.

"The government, and in particular the Finance Ministry, has asked the State Ministry for State Enterprises to improve all the relevant procedures and to do everything transparently," she said.

Govt to dramatically reduce number of state firms, VP says

Andi Haswidi, The Jakarta Post, Jakarta

To help make state companies more efficient and competitive, the government plans to reduce the number of nationalized firms to 69 over three years from the current figure of 139.

The plan will be implemented through various mechanisms, including merger and privatization.

"The target is to reduce the number of state firms to 69 through mergers, privatizations, liquidations and other mechanisms," Vice President Jusuf Kalla told reporters Monday after a limited ministerial coordinating meeting.

The plan, Kalla said, was expected to bolster the performance of state firms amid increasing competition, both domestic and global.

He insisted that signs of progress in the state sector were already becoming apparent, pointing out that this year the government was targeting 22.5 percent growth in state-firm profits from the Rp 72.44 trillion booked last year.

"We are targeting a minimum of 20 percent growth, but we have agreed on 22.5 percent on average. So, it's good. State-owned companies will now be required to fast-track all the programs in their pipelines," Kalla said.

"These companies have to increase their investment levels for the sake of the nation's development. There are high-performing companies and there are also weak ones," he said.

State Minister for State Enterprises Sugiharto gave the following details of the resizing plan: reducing 139 companies to 102 in 2007, to 87 in 2008, to 69 in 2009, to 50 in the period between 2012 and 2015, and a further reduction to 25 after 2015.

However, the plan would still have to await an agreement between the coordinating ministries, the Finance Ministry and other relevant ministries, as well as the approval of the House of Representatives.

"All the processes, such as mergers, ownership dilution, divestment, etc., will need the support of all the stakeholders, including the legislators," Sugiharto explained.

For the short term, he said, it was expected that at least 4 state firms -- oil and gas firm Pertamina, a proposed holding company for state mining firms, state gas company PT PGN, and a proposed holding company for state plantation firms -- would come close to completing fast-track restructuring in 2007 and 2008, and that these would serve as pioneers capable of competing globally.

As for the state-bank sector, Sugiharto said that the issues involved were still being discussed internally and that consultations would soon be carried out with Bank Indonesia soon.

"I cannot say whether there will definitely be bank mergers. But the Vice President suggested the need to study the concept of a development bank, like those that exist in some overseas countries," he said.

A development bank would be beneficial as it would provide long-term loans, unlike Indonesia's private banks, which tend to cater to short-term financing needs, Sugiharto explained.

Under the 2007 national budget, the government is targeting a total of Rp 3.3 trillion in privatization proceeds, with Rp 1.300 trillion of this being injected as fresh capital for 8 state firms: PT KAI, Garuda, Kertas Leces, PIM, INKA, Perum SPU, BBI and PTPN XIV.

Sugiharto said that he also expected total capital expenditure by state companies to increase this year by 62.78 percent to Rp 114.1 trillion from Rp 70.1 trillion in 2006.

Government Guarantees Infrastructure Financing

Monday, 19 February, 2007 | 16:36 WIB

TEMPO Interactive, Jakarta: The government will guarantee the development of infrastructure projects that are financed by national banks.

This statement was made by the Coordinating Minister for the Economy Boediono.

The guarantee is being given to prevent the banking sector from worrying about the risks involved in loan disbursements to these projects.

The projects that will be guaranteed include those involving public interests and are seriously required for supporting macro economic growth.

However, Boediono was still reluctant to explaining examples of the projects.

“We'll be very selective over the projects that will be guaranteed,” he said last week in his office.

On a different occasion, Bank Indonesia stated it will not loosen its policy on the maximum lending disbursement limit (BMPK) even if loans are used for financing infrastructure projects.

The central bank still limits loan disbursement at 30 percent maximally.

In issuing the policy, said Bank Indonesia Governor Burhanuddin Abdullah, the central bank must refer to international regulation.

As a result, all policies will adopt international standards.

However, he said that the regulation was still flexible, in addition to infrastructure development that state-owned enterprises carried out.

“We will be more flexible,” he said without explaining further.

ANTON APRIANTO | SURYANI IKA SARI

Depressing picture of Indonesia's tropical forest

Rita A. Widiadana, The Jakarta Post, Nusa Dua

If you wished to better understand the condition of Indonesia's tropical forests, you could imagine them as a person suffering fourth-stage cancer -- very sick and hopeless.

This almost desperate statement was uttered by the nation's No. 1 person in the Forestry Ministry. In reality, it is much worse on the ground.

For more than 40 years Indonesia's forests have been prolific gold mines for a handful of elites in government and the business community.

Their illicit practices, usually immune to existing legal instruments, have caused tremendous destruction to the rich 120 million hectares of natural forests in Indonesia over the last four decades.

Almost 60 million hectares worth of forests in the country have been seriously degraded due to massive logging operations, both legal and illegal. The vast replacement of natural forests with industrial and production areas has also contributed to the large-scale destruction.

Such exploitations of nature damage 2.8 million hectares of forests every year.

Excessive exploitation of Indonesia's forests has resulted in tremendous disasters, including floods, landslides and a choking haze, being inflicted upon the nation's people, in addition to over 70 million people living in Singapore, Malaysia, Brunei Darussalam, Southern Philippines and Southern Thailand. Such activities have caused irreparable damage to the environment.

"It will take 100 years to fully rehabilitate our degraded forests. The costs will be so huge it will be beyond our technical and financial capability," said Forestry Minister M.S. Kaban, adding that the current rehabilitation of 3 million hectares of forests had already absorbed US$190 million.

Pekka Patosaari, director of the United Nations Forum on Forests (UNFF), told The Jakarta Post during the forum's Country-Led Initiative meeting here in Nusa Dua early this week that Indonesia was both a rich and poor country.

"Indonesia is very rich. The country has abundant natural resources but lacks proper management and controls. The country losses potential revenue that can be used to improve its people's welfare," Patosaari said.

Hans P. Hoogeveen, chairman of the UNFF-7 Bureau, said Indonesia had gained a significant level of international attention. "Indonesia's forests have been the world's most precious lung. International cooperation will be arranged to help this country manage its natural resources wisely and effectively," he said.

Indonesia has the third largest area of tropical forests in the world. The country's forests are home to 10 percent of the world's plants, 12 percent of its mammals and 17 percent of its bird species.

With this in mind, Indonesia's forests become one of the richest and most biologically diverse ecosystems in the world.

Unfortunately, few people have benefited from this potential. During the New Order era, beneficiaries of the Indonesian forests were those closest to then-president Soeharto. These included his children, and political and business cronies, as well as timber tycoons who had been granted concessions of more than 60 million hectares of forest land.

After the fall of Soeharto's regime, this list was extended to include new timber tycoons, governors and regents -- especially after regional autonomy was enforced in 2001.

"The government should not close its eyes to the bleak reality that there is a continuous joint effort from policy makers, business people, and military and police officials in exploiting Indonesian forests for their own benefits," the Indonesian Environmental Forum (Walhi) stated in a recent report.

The government, the report said, had failed to strictly control forestry and plantations for decades, adding that Indonesia's forestry management had been marred by corruption, incompetence and indifference.

Kaban admitted that despite efforts that have been made, the issue proved to be more complicated than was first thought. "There are many parties involved in the activities and their network has been extensive," he said.

Many "actors," or environmental criminals, continued to safely exist in the government bureaucracy, legislative bodies, the military and business. Drastic and brave action is sorely needed to bring these irresponsible and greedy people to justice in order to save the country's forests from enormous destruction.

Indonesia's economy up 5.5 pct in 2006

Source: Xinhua

Indonesia's economic growth reached 5.5 percent in 2006, with the highest contribution from the sector of communication and transport and the lowest from mining, the country's Statistic Bureau announced here on Friday.

The head of the bureau Rusman Heriawan said the growth was supported by growth in all sectors, including communication and transport, which contributed 13.6 percent, and construction sector, which contributed 9.0 percent.

The services sector contributed 6.2 percent, while trade, hotel and restaurant contributing 6.1 percent, electricity, gas and water, 5.9 percent, finance, real estate and company services, 5.7 percent, manufacturing industry, 4.6 percent, agriculture, 3.0 percent and mining, 2.2 percent.

Deducted of oil and gas sector, the economic growth stood at 6. 1 percent, higher than the overall growth of 5.5 percent, he said.

The head of the bureau said that a series of natural disasters in 2006, including earthquake and floods, curtailed the economic growth.

Thousands of people were killed and a huge number of infrastructures were destroyed by the tsunami and floods across the country last year.

Indonesia to issue longer visas to draw more tourists

Jakarta (ANTARA News) - Indonesia is to grant foreign visitors visas for up to 120 days compared to the current 30 days in a bid to boost tourism, Vice President Jusuf Kalla said Thursday.

"It is now being processed, that tourists get four months," Kalla told AFP during an interview here.

He said the longer visa was part of the government's drive to attract more foreign visitors.

At present, tourists from 54 countries can obtain a 30-day visa on arrival at a cost of 25 dollars, or free for most Southeast Asian nations.

Kalla said the 54 countries -- which include most of Europe, China, India, the US, Canada, Australia and New Zealand -- accounted for about 90 percent of Indonesia's foreign tourists.

Visitors have complained that 30 days is far too short a time to take in the vast archipelago, which stretches for thousands of kilometres (miles).

Indonesia's drive to boost tourist numbers has also suffered due to a lack of money to promote the country abroad because of more pressing budget priorities.

"But I said that tourism is also a priority and therefore this year the budget will be increased on top of what is in the state budget," Kalla said, without giving figures.

Indonesia recorded a 2.38-percent drop in foreign tourist arrivals to 3.98 million in 2006.

Tourism has been hurt by a number of terrorist attacks in recent years, including on the popular resort island of Bali, as well as bird flu and a series of man-made and natural disasters.

Renewable energy to power Indonesian villages

Jakarta (ANTARA News) - Indonesia aims to have 2,000 energy self-sufficient villages powered by hydro, solar or bio-fuel resources by 2009, Energy and Mineral Resources Minister Purnomo Yusgiantoro said.

The country currently has 140 villages capable of meeting all their own energy needs, the official Antara news agency quoted him as saying late Wednesday after a cabinet meeting.

"President Susilo Bambang Yudhoyono wants the number of energy-self-sufficient villages ... 140 increased to 200 this year and to 2,000 by the end of the present cabinet's tenure in 2009," Yusgiantoro said.

The villages have developed micro-hydropower plants or solar, bio-gas and bio-fuel energy schemes which also create jobs and reduce reliance on fossil fuel reserves to help meet growing energy demands in Southeast Asia's largest economy.

Yudhoyono has asked the relevant ministries to arrange to disburse the necessary funds to the villages involved in the scheme, Antara said.

Yusgiantoro said the villages were eventually expected to produce an energy surplus which they could then sell.

The scheme was hoped to reduce the number of unemployed by one million by 2009, the minister said, adding that 45 percent of Indonesia's 70,000 villages were underdeveloped.

Around a third of Indonesians have no access to electricity, the World Bank says.

One pioneer village, Tanjung Harjo in Central Java, was already using vegetable energy resources to meet all its needs and was selling its surplus power to a nearby sugar factory, the agency said.

Foreign banks foster sustainable development

Andi Haswidi, The Jakarta Post, Jakarta

The Foreign Bank Association of Indonesia (FBAI) has formed a special working committee on sustainable development that aims to formulate a standard for best lending practices to be adopted by FBAI members.

Speaking during a discussion on sustainable lending, the CEO of HSBC Indonesia, Richard McHowat, who also heads the FBAI, said Wednesday the committee was in the early stages of identifying the practices of its members in Indonesia and promoting awareness on sustainable development.

The FBAI was formed in February 2006, and includes as members ABN Amro, CitiBank, Rabo Bank and Standard Chartered, as well as joint venture banks. The association currently boasts 33 members.

"In formulating the standard for best practices, we will adopt the global standard of best practices for sustainable development and adopt it into an Indonesian context," McHowat said.

"For us, it is no longer about the willingness to implement sustainable best practices, but more about prioritizing them while waiting for the right moment."

As an example, McHowat said that under his company's environmental risk standard, it must ensure that all decision-making processes fully address environmental-risk assessment and establish suitable procedures for dealing with proposed transactions of an environmentally sensitive nature.

"We have been around from 121 years and we do not want to ruin our reputation by supporting a project that is potentially harmful for the people and environment," he later told The Jakarta Post.

Amol Titus, HSBC Indonesia head of risk analysis and sustainability, said that companies that embraced the principles of sustainability actually improved their chances of securing longer-term viability and success as they became more "bankable."

"HSBC in Indonesia has already started to develop portfolios of customers whom we regard as sustainable and the Bank is supporting them by providing a range of facilities, including working and trade capital, cash management and foreign exchange services," he said.

Sustainable development seeks to relieve poverty, create equitable standards of living, satisfy the basic needs of all people, produce sustainable economic growth and establish sustainable political practices, while taking the steps necessary to avoid irreversible damage to natural capital.

It does not focus solely on environmental issues as it also encompasses three general policy areas: economic, environmental and social.

Also speaking during the seminar was WWF Indonesia executive director Mubariq Ahmad, who described some of the challenges in bringing Indonesian corporations on board.

According to Mubariq, the foremost challenge in convincing corporations in Indonesia to adhere to environmental principles was the difficulty involved in identifying and contacting their owners. This was particularly true of those in the forestry business.

Globally, HSBC has announced a five-year US$8 million environmental partnership with the Smithsonian Tropical Research Institute to fund the largest-ever experiment on the effects of climate change and how it will affect the world's forests.

Opportunity knocks for Indonesia

Wolfgang Fengler, Soekarno Wirokartono, Andrew Steer, Jakarta

A revolution is underway in Indonesia's finances, creating immense opportunity for a better future. After almost a decade of successful macroeconomic management, Indonesia is finally in a position of fiscal strength.

As a result of the sharp reduction in fuel subsidies last year, coinciding with declining debt service payments and increasing revenues, Indonesia has created additional "fiscal space" of US$15 billion in 2006 (out of a total national budget of some $70 billion). Equivalent to around 7 percent of gross domestic product (GDP), this is the largest increase in additional fiscal resources since the 1973-74 oil revenue wind fall, providing a tremendous window of opportunity for Indonesia to upgrade its creaky public services.

However, the challenges have changed since the 1970s and 1980s, when Indonesia first expanded its basic services, particularly in education and health. Today, Indonesia needs to invest more in the quality of its public services and better infrastructure. If Indonesia is to stay competitive, then it is crucial that some of these precious additional resources are channeled towards higher quality and more accessible secondary and tertiary education, an improved and more equitable health system and better infrastructure provision.

The central government is no longer in the driver's seat in delivering the bulk of public services. Indonesia's move to decentralization in 2001 has changed the fiscal fundamentals of the country, and it is particularly regional governments that need to spend money, not save it.

In 2006, Indonesia has experienced a "second big bang" when transfers increased by another $8 billion to a record $25 billion. This is projected to rise further to $28 billion this year. With such large sums now flowing to the regions, the challenge is no longer primarily to ensure that adequate resources reach the poorest regions, but rather to ensure that the poorest regions spend the resources well.

As the Indonesia 2007 Public Expenditure Review produced by the government and the World Bank highlights, the size and ranking of spending in key sectors has changed significantly since 2001.

Of the three key sectors covered in the 2007 review, education is the one that stands out as having benefited most from the recent changes in expenditure patterns. Spending on education is now higher in Indonesia than for any other sector, accounting for more than 17 percent of the government's total budget.

Meanwhile, although its nominal spending share of spending has increased from 2.6 percent in 2001 to 4.5 percent in 2006, health still ranks in a lowly eighth position in total government spending. Infrastructure too is only slightly above its post-crisis low of 9.2 percent and only accounts for 11.1 percent of total spending. This is not sufficient if Indonesia is to catch up on the "lost decade" of investment in infrastructure since the economic crisis and stay competitive with its regional peers. This concern is echoed by the fact that infrastructure spending has fallen back from fourth position in 2001 to only sixth position today.

Also noteworthy, while debt service payments have fallen, as would be expected, from first position (24.6 percent) in 2001 to fifth position today, there is concern that the proportion of spending on government apparatus has risen from 9.0 percent in 2001 to more than 15.3 percent today. This is a far higher share of spending on the bureaucracy than observed in similar developing countries and suggests that precious resources are not being used as effectively as they could in particular, on the provision on front-line services to the poor.

Indonesia is poised to spend its resources in ways that could greatly influence and accelerate the country's development over the next decade. If these resources are spent wisely Indonesia will be able to make the most of the financial opportunities now available to it after so much recent hardship.

Not only might devastating floods in Jakarta become a thing of the past. So too could poverty levels of 17.8 percent, poor quality and inaccessible public services, and the inadequate provision of infrastructure that all combine to hold Indonesia back from achieving its ambitious development goals and, ultimately, its full potential.

With the changes already underway and fiscal opportunities these changes create, there is reason to hope that Indonesia will be under the international spotlight for the right reasons, not the wrong ones.

Wolfgang Fengler is World Bank Senior Economist, and lead author of the Indonesia Public Expenditure Review 2007, Soekarno Wirokartono, Former Deputy for Macro-economy, BAPPENAS and Andrew Steer, Country Director, World Bank Indonesia

Flood-stricken exporters want government help to avoid buyers' penalties

The Jakarta Post, Jakarta

Export companies affected by the recent floods in Jakarta have asked the government for its help in shunning penalties foreign buyers are attempting to impose over export delays.

They have also asked for support in convincing buyers not to shift their orders to other countries.

As the delays in deliveries were due to circumstances beyond their control, they should be exempt from paying penalties or other compensation, the companies said.

The floods that hit Jakarta last week disrupted business in the city that accounts for about one-third of Indonesia's gross domestic product, the biggest in Southeast Asia.

Many factories were closed due to the floods, which began last Friday. Access to Tanjung Priok Port, the main overseas shipping terminal, was also cut.

The economic cost of Jakarta's worst floods in five years may reach Rp 4.1 trillion (US$453 million) National Planning Minister Paskah Suzetta has said.

The 179-hectare Cakung Industrial Bonded Zone in North Jakarta was severely affected by the floods, with more than a hundred factories in the zone forced to put production on hold.

PT Caterindo Garment Industri director Bartolomeus Saleh, whose company operates in the bonded zone, said late last week that most exporters were in difficulty because their foreign partners had begun to impose penalties because of the delays in shipments.

He said that many were also concerned that they might lose business as buyers had begun to threaten to switch to other countries.

"We tried to assure them that we would meet all the demands required by our contracts, but they still threatened to look for other producers."

Of the 125 factories in the Cakung bonded zone, more than 80 percent are engaged in textile and garment production, exporting mainly to the United States and Europe.

PT Kaho Citra Indah Garmen director Parmudyo said the affected businesses had demanded decisive action from the government, such as the issuance of a formal notice to importers about the situation.

"The government must convince importers so that they won't go to another country for supplies. Apart from that, the government also has to ease the burden exporters carry and simplify the procedures for exporting goods," he said.

Eddy Sulaimen, the director of PT Aneka Garmentama Indah, said that without electricity, no document administration or data transfers could be carried out and that he hoped the customs and excise officials would come up with a solution.

Indonesian Bonded Zones president director Agus Supriyanto said that efforts were underway to restore electricity and water to the zone.

"We have deployed help like heavy equipment, trucks and mechanics for the factories in Cakung. We are also trying to come up with a solution for the aftermath of the flood," he said.

Automotive product exporters have also been affected by the floods. PT Toyota Motor Manufacturing Indonesia (TMMI) said that the a shipment of 820 cars had been delayed due to the floods.

"Usually we export twice a week, every Tuesday and Thursday," TMMI planning director Irwan Priyantoko told Antara on Friday.

WB country director in Indonesia to be replaced

Jakarta (ANTARA News) - World Bank country director in Indonesia, Adrew Steer, will soon be replaced because he will be given a new post in London, England.

"I will leave Indonesia for London on February 28 to work for the British government. I will remain in the World Bank but I have to be responsible to the British government," Steer said on the sidelines of a conference on public spending here on Monday.

Steer said having been World Bank country director in Indonesia since 2002, he had seen the country make a lot of economic progress from time to time.

"I have to leave Indonesia for London but I don`t know who will replace me," Steer said.

He said Indonesia would continue to face new challenges in the years to come but they would lead the country to greater success.

"The government at present is in a financially strong position and this is very good for Indonesia. Therefore, with the new challenges, I am certain the country will make a lot of progress in the future," he said.

Asked about the dissolution of the Consultative Group on Indonesia (CGI) by President Susilo Bambang Yudhoyono, Steer said he fully supported the government`s decision because it was a sign of success.

"I am glad CGI is dissolved because in my opinion, the dissolution is a sign of success. CGI is actually good for Indonesia but in view of the country`s progress, the CGI is no longer needed," Andrew noted.

However, he added that it was important for Indonesia to remain having both multilateral and bilateral dialogs with the international community.

"But it is not necessary to sit at one table and make such commitments," Steer said, adding on the other hand that multilateral dialogs as such were not a bad thing as they could save Indonesia time because they enabled Indonesia to meet and talk with about 35 donor countries and institutions at the same time.

Banks to help debtors affected by floods

Jakarta (ANTARA News) - Banks will help debtors affected by recent floods in Jakarta that have paralyzed production in some industries.

"We have already coordinated with Bank Indonesia (the central bank) about it. In principle we all will help them," the general chairman of the National Banking Association (Perbanas), Sigit Pramono, said here on Sunday.

He said that he had already written to Perbanas members to make an inventory of, verify and identify the debtors` problems to determine the form of assistance for them.

"We hope we could report the result of the inventory to Bank Indonesia within a week for the bank to decide the assistance," he said.

He said the assistance could be extension of grace period or an interest cut or even writing off of interest.

"We still need some time to determine the form of assistance," he said, adding that debtors now were still unable to tell how much they had lost," he said.

He said the national banks had actually had an experience in such a case namely when they helped debtors in disaster-hit Aceh and Yogyakarta so the pattern for it was actually already available.

Bank Indonesia spokesman Budi Mulya said based on central bank regulations debtors in regions hit by disasters were entitled to getting special treatment and therefore they would receive relief assistance.

State-owned companies to help small businesses affected by flood

Jakarta (ANTARA News) - State Minister for State-owned Companies Sugiharto said here Sunday he would formulate working capital assistance for small businesses that had been affected by recent floods in Jakarta, Bogor, Depok, Tangerang and Bekasi.

"We will formulate working capital assistance which could be given in the form of subsidy or without a colateral," he said on the sideline of a clean-up operation by state-owned companies.

He said priority would be given to small businessmen that could not continue their business activities after the recent floods.

The funds for it would be taken from the Environment and Partnership Program (PKBL) funds state-owned companies had so far allocated as part of their corporate social responsibility.

"Every state-owned company every year sets aside three percent of its profit for the PKBL. The funds are indeed for helping people like after recent floods and they will be given in the form of a grant," he said.

He said the capital assistance would be coupled with bank credits for small-scale businesses.

"In principles the state-owned companies have already had funds for those who need to rehabilitate their businesses," he said.

Asked how much that had been collected for the PKBL in 2006 the minister said it reached around Rp1 trillion because the state-owned companies` profit that year reached more than Rp42 trillion.

"I did not say that the Rp1 trillion would be for Jakarta and its environs only. We are now still counting the number of small businessmen that have been affected by the floods," he said.

Asked when the capital would be distributed he said he hoped it could be realized within a week or two weeks.

"The meeting on it happened only on Friday while the working day would only begin on Monday so we could only start formulating it that day. We think in two weeks` time people will start needing the money as now they are still busy cleaning up their residences," he said.

40 Indonesian SMEs meet German counterparts

Jakarta (ANTARA News) - Some 40 Indonesian small-and medium-scale entrepreneurs (SMEs) met with 26 German counterparts in a forum organized by the Agency for Assessment and Application of Technology (BPPT) here Friday, an official said.

"The meeting is an activity under the Small Project Facility (SPF) or a grant project from the European Union to help Indonesian SMEs apply technology in their businesses," the head of BPPT`s Business Technology Center (BTC), Bambang S Pujantiyo, said on the sidelines of the gathering which was held at the BPPT building.

The meeting was aimed at facilitating the transfer of technology from European countries to Indonesia, he said adding that the gathering was promoted by the Indonesian Network for Technology-Industry Matching (InTIM).

Bambang said the partnership between the Indonesian and German entrepreneurs will be materialized in the form of technology licenses, intellectual property rights, joint production, assembling, marketing and capitalization.

Germany will help modernize Indonesian businessmen`s machineries that are already worn out, he said.

The business gathering discussed issues in five areas, namely marine resources, aquaculture, energy, electronics and health as well as information technology, manufacturing and agro-industry.

Meanwhile, State Minister for Cooperatives and SME expert staff member for Technology Usage I Wayan Dipta said the business gathering will hopefully increase the number of technology and knowledge-based Indonesian entrepreneurs.

Quoting a study conducted by the Pacific Economic Corporation Council in 2002, I Wayan said Indonesia should raise the number of its technology- and knowledge-based entrepreneurs to 20 million until 2020 if it wants to have a competitive edge.

"Data of the Central Bureau of Statistics (BPS) in 2005 showed that Indonesia only had 3 million technology- and knowledge-based entrepreneurs while the accepted norm was that a country should have one technology- and knowledge-based entrepreneur in every 20 people," he said.

"If in 2005 Indonesia had a population of about 220 million, it should already have 11 million technology- and knowledge-based entrepreneurs by now," he said.

I Wayan also said the business gathering would not abandon Indonesian technology.

Indonesia, Switzerland agree to avoid double taxation

Jakarta (ANTARA News)- Indonesia and Switzerland agreed here to avoid double taxation by signing an amendement of the document on protocol for avoiding double taxation.

"This agreement is an important step to increase economic relations between the two countries especially to create a more conducive atmosphere for investment in Indonesia," Swiss ambassador to Indonesia, Bernadino Regazzoni, said.

He said today was also historic for the two countries following the arrival of Swiss Confederation President Micheline Calmy-Rey for the first time in the country on Wednesday for a three-day visit.

He said this was the right time to increase the two countries` bilateral relations in the political as well as economic fields.

The Indonesian foreign ministry`s director for West European Affairs, Ramli Sa`ud, meanwhile said that the amendment was done to adapt with the current situation.

"In principle, goods already taxed in Indonesia may not be taxed again in Switzerland and vice versa," he said.

Ramli said that the question of additional cost that had caused difficulties for businessmen to advance would also be addressed in addition to other problems by the ministry of trade which had the competence in the field.

He said Switzerland was one of the three big countries in Europe that had invested in Indonesia. Its investment in the country reaches three billion US dollars, he said adding there were now 75 Swiss companies operating in the country.

"Our bilateral relations have always been good. Switzerland is an advanced as well as neutral country," he said.

He said Switzerland had been interested to increase its economic relations with Indonesia in view of the country`s market potential. He said Indonesia had seen it as a good opportunity for increasing foreign investment in the country.

He said "there have been positive changes in Indonesia in the past two years."

Canada, Spain and Azerbaijan provide aid to flood victims

Abdul Khalik, The Jakarta Post, Jakarta

Canada, Spain and Azerbaijan announced Thursday their contributions to the overseas aid effort to assist the victims of Jakarta's floods.

The Canadian ambassador to Indonesia, John Holmes, said his country would donate Rp 382 million in aid, to be channeled through the Canadian International Development Agency, the Indonesian Red Cross (PMI) and the Circle of Women's Alternative Education (Kapal Perempuan), to provide urgently needed food and emergency supplies.

"On behalf of all Canadians I wish to extend our sympathies to the families and friends of those who lost their lives, and to those communities affected by the flooding," Holmes said in a statement.

He added that Canada would consider providing further assistance should the situation worsen and the Indonesian government issue a request for international assistance.

"Canada is committed to helping Indonesia in times of crisis as we did in the aftermath of the tsunami in Aceh and the earthquake in Yogyakarta," Holmes said.

The Canadian Embassy said that the Rp 229 million contribution to PMI would allow the organization to distribute hygiene kits to some 2,200 families across the city while the Rp 153 million aid to Kapal Perempuan would be used to provide food and other relief to households in Klender, East Jakarta, and Kalibata, South Jakarta.

Spain also announced Thursday it would contribute 100,000 euros (around US$129,000), mainly for drinking water and sanitation, to be distributed through PMI.

Spain's Queen Sofia, along with the country's State Minister of International Cooperation, Leire Paj¡n, announced the aid after inspecting flood damage in the capital.

Meanwhile, Azerbaijan's embassy in Jakarta announced it handed over food parcels, drinking water and medicine to flood victims directly through the PMI on Thursday.

The Azerbaijani Embassy offered its condolences to the Indonesian government and people affected by the Jakarta floods, and said it would quickly send emergency relief to the victims.

Scores of countries have so far contributed to the flood relief effort.

On Wednesday, the European Union announced that it would contribute Rp 6.6 billion while Germany said it would donate Rp 2.9 billion (not Rp 2.9 million as reported in our story on Thursday on Page 12).

On Tuesday, the Netherlands, Japan and Switzerland donated US$1.29 million, Rp 1.1 billion and US$50,000 respectively while on Monday, Australia and the U.S. contributed over Rp 1 billion and US$100,000 respectively.

The Netherlands embassy announced that Ambassador Nikolaos van Dam would hand over the first 20 boats on Friday to Jakarta police as part of its aid to the flood victims.