"A Summary" – Apr 2, 2011 (Kryon channelled by Lee Carroll) (Subjects: Religion, Shift of Human Consciousness, 2012, Intelligent/Benevolent Design, EU, South America, 5 Currencies, Water Cycle (Heat up, Mini Ice Ace, Oceans, Fish, Earthquakes ..), Middle East, Internet, Israel, Dictators, Palestine, US, Japan (Quake/Tsunami Disasters , People, Society ...), Nuclear Power Revealed, Hydro Power, Geothermal Power, Moon, Financial Institutes (Recession, Realign integrity values ..) , China, North Korea, Global Unity,..... etc.) -

“ … Here is another one. A change in what Human nature will allow for government. "Careful, Kryon, don't talk about politics. You'll get in trouble." I won't get in trouble. I'm going to tell you to watch for leadership that cares about you. "You mean politics is going to change?" It already has. It's beginning. Watch for it. You're going to see a total phase-out of old energy dictatorships eventually. The potential is that you're going to see that before 2013.

They're going to fall over, you know, because the energy of the population will not sustain an old energy leader ..."
"Update on Current Events" – Jul 23, 2011 (Kryon channelled by Lee Carroll) - (Subjects: The Humanization of God, Gaia, Shift of Human Consciousness, 2012, Benevolent Design, Financial Institutes (Recession, System to Change ...), Water Cycle (Heat up, Mini Ice Ace, Oceans, Fish, Earthquakes ..), Nuclear Power Revealed, Geothermal Power, Hydro Power, Drinking Water from Seawater, No need for Oil as Much, Middle East in Peace, Persia/Iran Uprising, Muhammad, Israel, DNA, Two Dictators to fall soon, Africa, China, (Old) Souls, Species to go, Whales to Humans, Global Unity,..... etc.)
(Subjects: Who/What is Kryon ?, Egypt Uprising, Iran/Persia Uprising, Peace in Middle East without Israel actively involved, Muhammad, "Conceptual" Youth Revolution, "Conceptual" Managed Business, Internet, Social Media, News Media, Google, Bankers, Global Unity,..... etc.)
.

The headquarters of the Corruption Eradication Commission (KPK) in 
Jakarta. (BeritaSatu Photo)
"The Recalibration of Awareness – Apr 20/21, 2012 (Kryon channeled by Lee Carroll) (Subjects: Old Energy, Recalibration Lectures, God / Creator, Religions/Spiritual systems (Catholic Church, Priests/Nun’s, Worship, John Paul Pope, Women in the Church otherwise church will go, Current Pope won’t do it), Middle East, Jews, Governments will change (Internet, Media, Democracies, Dictators, North Korea, Nations voted at once), Integrity (Businesses, Tobacco Companies, Bankers/ Financial Institutes, Pharmaceutical company to collapse), Illuminati (Started in Greece, with Shipping, Financial markets, Stock markets, Pharmaceutical money (fund to build Africa, to develop)), Shift of Human Consciousness, (Old) Souls, Women, Masters to/already come back, Global Unity.... etc.) - (Text version)

… The Shift in Human Nature

You're starting to see integrity change. Awareness recalibrates integrity, and the Human Being who would sit there and take advantage of another Human Being in an old energy would never do it in a new energy. The reason? It will become intuitive, so this is a shift in Human Nature as well, for in the past you have assumed that people take advantage of people first and integrity comes later. That's just ordinary Human nature.

In the past, Human nature expressed within governments worked like this: If you were stronger than the other one, you simply conquered them. If you were strong, it was an invitation to conquer. If you were weak, it was an invitation to be conquered. No one even thought about it. It was the way of things. The bigger you could have your armies, the better they would do when you sent them out to conquer. That's not how you think today. Did you notice?

Any country that thinks this way today will not survive, for humanity has discovered that the world goes far better by putting things together instead of tearing them apart. The new energy puts the weak and strong together in ways that make sense and that have integrity. Take a look at what happened to some of the businesses in this great land (USA). Up to 30 years ago, when you started realizing some of them didn't have integrity, you eliminated them. What happened to the tobacco companies when you realized they were knowingly addicting your children? Today, they still sell their products to less-aware countries, but that will also change.

What did you do a few years ago when you realized that your bankers were actually selling you homes that they knew you couldn't pay for later? They were walking away, smiling greedily, not thinking about the heartbreak that was to follow when a life's dream would be lost. Dear American, you are in a recession. However, this is like when you prune a tree and cut back the branches. When the tree grows back, you've got control and the branches will grow bigger and stronger than they were before, without the greed factor. Then, if you don't like the way it grows back, you'll prune it again! I tell you this because awareness is now in control of big money. It's right before your eyes, what you're doing. But fear often rules. …

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Monday, April 30, 2007

Asian financial chiefs to meet on weekend for deal on currency swap

Tokyo (ANTARA News) - Asian finance ministers from the 10-member Association of Southeast Asian Nations plus Japan, China and South Korea will gather Saturday in Kyoto to discuss ways to enhance financial cooperation, including the launch of a multilateral currency swap deal.

During the one-day meeting in the ancient Japanese capital, the ASEAN-plus-three finance ministers are expected to agree on a scheme for pooling funds from their foreign reserves as part of efforts to convert the current regional network of bilateral currency swaps worth nearly $80 billion into a multilateral framework, Japanese officials said.

The current web of bilateral currency swap deals, known as the Chiang Mai Initiative, was introduced in 2000 in order to prevent a recurrence of the 1997-1998 Asian financial crisis.

Under the initiative, central banks from participating countries are allowed to swap foreign exchange reserves to fight speculative attacks on their currencies.

The 13 Asian nations agreed in May 2006 at a meeting of their finance ministers

in Hyderabad, India, to set up a task force to study the feasibility of upgrading the current network of bilateral currency swaps into a multilateral framework to better protect the fast-growing Asian economy from possible currency upheavals, the officials said.

The envisioned multilateral currency swap deal will enable a troubled country in Asia to ensure necessary liquidity in a prompt manner in the event of a crisis, the officials said.

Some critics say the envisioned scheme could overlap with the functions of the International Monetary Fund, the Washington-based lender tasked with rescuing

economies from possible financial crises.

But Hiroshi Watanabe, Japan's vice finance minister for international affairs, brushed aside such concern, saying that such a scheme "would more likely

supplement the functioning of the IMF rather than overlap it."

Japan is allowed to allocate part of its foreign reserves to such pooling under existing laws, Watanabe was quoted by Kyodo as telling reporters last week.

The meeting is scheduled to be held on the sidelines of a two-day annual meeting of the Asian Development Bank from Sunday.

The finance ministers from the 13 Asian nations are also likely to discuss ways to foster efficient and more liquid bond markets in Asia, with the aim of encouraging savings in the private sector to flow into the market.

As the issuance of local currency-denominated bonds has been increasing sharply, a more flexible method of bond issuance is needed in the region to cater to the needs of local companies, the Japanese officials said.

The Asian financial leaders are likely to study ways to allow Asian firms with low creditworthiness but high growth potential to issue bonds by obtaining credit guarantees from public entities.

The ministers are also likely to review the progress of four working groups set up under the Asian Bond Markets Initiative, the officials said.

Among the issues being discussed by the working groups are ways to enhance the capabilities of local rating organizations in Asia and securitization.

Finance ministers from Japan, China and South Korea will hold a meeting Friday afternoon to confer on issues to be taken up at the ASEAN-plus-three meeting and to exchange views on their respective economies, the Japanese officials said.

ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

Sunday, April 29, 2007

Govt rolls out soft-loan scheme to help ailing textile industry

Andi Haswidi, The Jakarta Post, Jakarta

After a long wait, the government appears to be finally ready to cough up Rp 80 billion (about US$8.8 million) in soft loans to small and medium-sized textile firms as part of a reequipping program.

"The soft loans are intended to help about 50 small and medium-sized textile companies," said Anshari Bukhari, the Industry Ministry's director general for metal, machinery, textile and miscellaneous industries, as quoted by Detik.com.

Loans extended under the scheme will carry an interest rate of 8 percent per year, and will range in size from Rp 100 million up to Rp 5 billion.

The Rp 80 billion available for lending to SMEs in the sector forms part of an overall Rp 255 billion in budgetary funds that have been allocated to encourage firms in the country's ailing textile industry to reequip.

Anshari said the procedures for applying for a loan would be announced Monday in the press.

"So far, we have only received an application for a loan from one firm. We expect to receive more after we fully roll out the program on Monday," he said.

The government kicked off the first phase of the textile-industry interest subsidy scheme on April 20, under which a total of Rp 175 billion is being allocated to cover interest payments of up to 11 percent on loans for the purchase of machinery or for other forms of investment made by large-scale textile companies up until Dec. 31.

Of the overall Rp 175 billion available under the interest subsidy scheme, 30 percent is earmarked for the garment industry, 50 percent for the textile industry, and the rest for the spinning industry. The government is hoping that the sector can create an additional 10,530 new jobs this year, and increase total textile exports to $156 million.

The domestic textile industry is losing out in terms of production capacity and quality compared to its foreign competitors as most of the firms operating in the industry use machinery that is more than 20 years old.

Interest subsidies are essential for the industry as the banking sector has been reluctant to reduce lending rates despite the country's improved macroeconomic fundamentals, and the fact that Bank Indonesia reduced its key rate 10 times since last May to 9 percent at present.

Apart from providing subsidies, the government will also reduce taxes on the imported cotton used in textile production.

Saturday, April 28, 2007

RI 'lags behind' in ASEAN trade

Andi Haswidi, The Jakarta Post, Jakarta

Despite its remarkable export growth last year, Indonesia, unlike other ASEAN countries, has failed to cash in on increasing trade opportunities in emerging markets, a business analyst says.

"Indonesia has not been able to catch up with its regional neighbors in benefiting from the rapidly unfolding market opportunities associated with international product fragmentation, or outsourcing," said Prema-chandra Athukorala, a professor of economics from the Australian National University (ANU), during the first annual Sadli Lecture in Jakarta on Tuesday.

Attending the lecture, named in recognition of former minister Mohammad Sadli's contribution to economics, were some of Sadli's former students and colleagues, including Trade Minister Mari Elka Pangestu, ANU Indonesia Project head Chris Manning and the dean of the University of Indonesia's School of Economics, Bambang Brodjonegoro.

Chandra said that compared with Thailand, Malaysia and Singapore, Indonesia had performed poorly in the food processing, assembling and other manufacturing sectors, including those related to outsourcing.

During the period from 2001 until 2004, processed food exports from Indonesia grew at 5.7 percent compared to 2.8 percent in the case of Malaysia, and 3 percent for Thailand. However, Indonesia's world market share in 2003 and 2004 for this dynamic product category, at only 0.91 percent, was one third that of neighboring Thailand.

In manufacturing, he said, Indonesia remained an underperformer in benefiting from the opportunities provided by emerging markets, especially China, whose total foreign trade value expanded from about US$20 billion annually in the late 1970s to over $800 billion in 2004.

In her opening remarks, Minister Mari said that according a government analysis in 2003-2004, Indonesia's constraints on the supply side were mostly related to inadequate infrastructure, lack of fresh investment, the high cost of doing business, and increased competition from China and Vietnam.

However, Chandra suggested that the fears over China's expansion had been widely exaggerated.

"Competition from China doesn't necessarily imply a proportionate loss in market share for all developing countries. Contrary to popular belief, manufactured goods, not primary products, have been the most dynamic export product category from ASEAN to China," he pointed out.

In his concluding remarks, Chandra said that over the past five years the Indonesian government had made good progress in restoring order to the macroeconomic fundamentals that had been shattered by the 1997-1998 financial crisis, "However, it was not sufficient for achieving rapid and sustained export growth in this climate."

"Market-oriented reform is much more pressing in the current international economic environment, characterized by the rapid expansion of global production networks," he said, urging Indonesia to participate more fully in outsourcing.

Supporting Chandra's analysis, the University of Indonesia's Institute for Economic and Social Research (LPEM-UI) chairman Chatib Basri said that other ASEAN members were more engaged in the production network than Indonesia.

"So, even at the lower levels of investment, they can generate strong export growth because what is really involved is outsourcing. They become more efficient," he said.

Mohammad Sadli, admired as a teacher and a colleague, served as minister of manpower from 1971 to 1973, and minister of mines from 1973 to 1978. Now 85 years of age, he still regularly writes on economic issues.

Friday, April 27, 2007

RI`s textile exports grow 17.5 %

Surabaya, East Java (ANTARA News) - Indonesia`s textile and garment exports in the first quarter of 2007 rose 17.5 percent from the same period in 2006 apparently due to restrictions the US imposed on import of similar goods from China, an industry spokesman said.

The US was the largest market for Indonesian textiles and garments with exports to that country econtributing US3.1 billion (around 4 percent) to overall textile and garment exports in the first three months of 2007, Benny Sutrisno, chairman of the Indonesian Textile Producers Association (API), said here on Thursday.

Indonesia is so far exporting textiles and garments to 197 countries.

He said domestic sales of textiles and garments in the first quarter of 2007 grew by around 5 percent from the same period in 2006.

Meanwhile, domestic sales of textiles and garments in the January-March 2006 period rose by 7 percent from the same period in 2005, he said.

He said the low figure in sales of textiles and garments was a consequence of the people`s low purchasing power and a glut of imported products, particularly from China, in the domestic market.

Chinese textiles and garments currently meet 37 percent of demand in the domestic market.

Nearly 60 percent of Indonesian textiles and garments is exported while the remaining 40 percent is to meet domestic needs.

The government has set aside Rp255 billion in funds to restructure aging textile machines.

If the restructuring program ran well, the country`s textile and garment production would increase by 9 percent, he said.

"We hope that we will have restructured all the aging textile machines by the end of this year so our textile and garment production will increase by 9 percent," he said.

Thursday, April 26, 2007

IMF Optimistic Indonesian Economy Will Improve

Thursday, 26 April, 2007 | 17:00 WIB

TEMPO Interactive, Jakarta: Stephen Schwartz, Senior Representative in Indonesia of the International Monetary Fund (IMF), is confident that economic growth this year will reach six percent.

Schwartz said he was satisfied with the performance of the Indonesia economic team.

The IMF concluded that the Indonesian economy has improved compared to last year.

“We are estimating that the economy will grow by six percent in 2007,” said Schwartz when closing a meeting with reporters at the Four Seasons Hotel, Jakarta.

Last year, according to the IMF, growth was only 5.5 percent.

This means that there are only three emerging market countries in Asia that are growing faster than Indonesia: China (10 %), India (8.4 %) and Vietnam (8%).

The achievements made have satisfied the IMF, regarding the performance of Indonesia's economic team.

“They have continued the work of (former president) Megawati's economic team, which succeeded in stabilizing the macro condition and now starts to improve to a higher level,” he said.

Schwartz is optimistic that Indonesia can realize economic growth of between 6.5 and seven percent within a short period of time should this performance be sustained.

Next year, for instance, the IMF has forecast that Indonesia's economic growth will reach 6.3 percent.

The IMF team, according to Schwartz, will come to Indonesia at the beginning of next month to carry up routine monitoring.

“After the report is complete, we will discuss it in detail,” said Schwartz.

BHM

BI Optimistic Foreign Reserves Will Reach US$50 Billion

Thursday, 26 April, 2007 | 15:27 WIB

TEMPO Interactive, Jakarta: Bank Indonesia (BI) is optimistic that foreign reserves will hit US$50 billion by the middle of this year.

“Should economic stability continue as it is now, this will be achieved,” said Rasmo Samiun, Director of BI’s Directorate of Foreign Reserve Management at after a National Convention on the Draft of Indonesia National Working Competence Standards yesterday (04/25) in Jakarta.

He explained that the country's foreign reserves had already reached US$49.4 billion, a US$2.2 billion increase compared to last March.

The highest contribution came from oil revenues and capital inflows to the domestic market.

Foreign markets are now extremely interested in the condition of the Indonesian economy, especially as regards the financial sector.

The reason for this is that Indonesian interest rates are still higher than other Asian countries.

“So, the return on our bonds is evaluated as higher.

Likewise, financial market too,” said Rasmo.

He said that the larger the foreign reserve, the higher the confidence in the domestic economy.

AGOENG WIJAYA

RI`s potentials being promoted in six Chinese provinces through expo

Beijing (ANTARA News) - Indonesia is promoting its economic, trade and tourism potentials in six Chinese provinces by taking part in a three-day Expo Central China 2007 opened on Thursday (April 26) in Zhengzhou, Henan province, an Indonesian official here said.

"Indonesia`s participation in the exhibition is a strategic step as thereby it is promoting its potentials in six Chinese provinces through only one exhibition," Andriana Supandy, head of the economic section at the Indonesian embassy in Beijing, said here Thursday.

The six Chinese provinces were Anhui, Henan, Hunan, Hebei, Hubei and Jiangxi.

Andriana said the exhibition which was opened by Chinese Deputy Prime Minister Wu Yi was being attended by hundreds of participants from 40 countries.

Indonesian Ambassador to China Sudradjat was expected to give a speech at the exhibition on Thursday afternoon about Indonesia`s wish to enhance economic, trade and tourism relations with China.

"The Indonesian ambassador is the only foreign envoy given the chance to deliver a speech at the exhibition," Andriana said.

She said Indonesia`s participation in the exhibition was an effort by the Indonesian embassy to continue promoting Indonesia`s economic potentials in a number of China`s provinces.

"We will focus our promotional effort on a number of non-traditional provinces which have not been penetrated by national businessmen," Andriana said, adding that Indonesian businessmen had so far only exported their products to traditional provinces/cities in China such as Beijing, Shanghai and Guangzhou.

Yet, other provinces in China were also big potential markets for Indonesian products and services.

"Thus, we are trying to step up promotion of Indonesian products and services in a number of non-traditional provinces in China. However, we are doing this without neglecting promotion in the traditional regions," Andriana said.

According to Andriana, the total target of the two countries` trade value in 2008 was set at US$20 billion and the value was increased to US$30 billion in 2010.

The trade value between the two countries in 2006 reached US$19.06 billion. "We are optimistic that the targets in 2008 and 2010 can be reached," Andriana said.

Wednesday, April 25, 2007

Bank Indonesia's Dutch unit struggles to erase bad image

Rendi Akhmad Witular, The Jakarta Post, Amsterdam

Indover Bank, a specialized wholesale bank in the Netherlands that is fully owned by Bank Indonesia, has long been regarded as a European outpost of Indonesia's rampant corruption.

The alleged laundering of illicit funds belonging to former president Soeharto and massive debts owed by Indonesian politicians and central bank officials are just some of the cases that hit the headlines in recent years.

But efforts are now being made to improve things, thanks to a new commitment from the central bank and the government to reap maximum (legitimate) benefit from Indover, and to prevent the frequent scandals of the past from reoccurring.

With BI now in the process of transferring the ownership of the bank to the government, the central bank is trying hard to convince the government that Indover is worth saving.

The transfer of ownership is required under the Central Bank Law, which bans BI from owning subsidiaries, and should be completed by 2009 at the latest.

With new management in position, the Amsterdam-based Indover is now in the process of getting back to its original business as a provider of trade finance for Indonesian exporters.

"A better financial performance is obviously needed. We plan to do this by changing our orientation to focus once more on providing support for Indonesian exporters. That is actually our main objective," Indover managing director Chairy Hakim told The Jakarta Post on Friday.

Chairy explained that getting the business back on the right track was sorely needed to rid the bank of its bad reputation..

Indonesia`s 1st quarter growth to exceed BI`s prediction

Jakarta (ANTARA News) - Central Bureau of Statistics (BPS) chief Rusman Heriawan estimates that Indonesia`s economic growth in the first quarter of 2007 will surpass the central bank`s expectation of 5.4 percent but doubts it will exceed the Finance Ministry`s projection of 5.7-5.9 percent.

There were many reasons to believe that the economy would perform better in the first three months of 2007, he said here Tuesday.

In the three months ended on March 31, 2007 exports grew by more than 10 percent while investment rose by 27.16 percent, he said.

Private consumption which was expected to contribute 60 percent of the economic growth was also on the increase, he said.

"Based on our preliminary calculation, economic growth has already exceeded 5.4 percent. But I don`t know whether it will go beyond 5.7-5.9 percent," he said.

If economic growth in the January-March 2007 period reached 6 percent it would not be positive for the attainment of the government-set economic growth of 6.3 percent for 2007, he said.

"Ideally, the economic growth in the first quarter should be more than 6.3 percent so we will find it easier to achieve the economic growth targets for the following quarters. But if economic growth falls short of expectation we will find it harder to achieve the economic growth target of 6.3 percent," he said.

Tuesday, April 24, 2007

Govt sets ambitious targets in long-term plan

Ary Hermawan, The Jakarta Post, Jakarta

The government officially unveiled its long-term development plan Monday, which envisages the current high poverty rate falling to five percent and per-capita income soaring to up to US$9,000 by 2025.

The economic blueprint set out in the newly endorsed Law No. 17/2007 on the 2005-2025 National Long-Term Development Plan (RPJPN) was officially unveiled by National Development Planning Board (Bappenas) chairman Paskah Suzetta.

"We will work hard to achieve these targets. Every administration in the future will have to base their programs on this vision. This is not merely a discourse, it is the law," he said in his speech during the launch ceremony.

The poverty rate stood at about 17 percent of the country's 220 million people last year, according to the Central Statistics Agency (BPS), which officially categorizes people living below the poverty line as those who earn less than US$1.55 a day.

Under the long-term development plan, the government is targeting an increase in per capita income to between $3,000 and $9,625 by 2025, which would place Indonesia within the ranks of the middle-income countries.

BPS figures show that Indonesia's per capita income was $1,663 last year, meaning that the country is categorized by the World Bank as a lower-middle-income country. The bank places countries with per capita incomes of between $756 and $2,995 in this category.

The government has allocated Rp 51 trillion ($5.6 billion) for poverty-alleviation programs in the 2007 national budget, and plans to raise the figure to Rp 80 trillion in next year's budget. "But increased spending on poverty eradication is not a universal panacea for tackling this problem. We must also invite the private sector to take part in the effort," Paskah explained.

Therefore, he said, the government's efforts to eliminate rules and regulations that impeded the private sector from doing business were also important as economic growth was essential to providing more jobs, thus leading to less poverty.

"For 2007-2008, President Susilo Bambang Yudhoyono is determined to boost economic growth so as to reduce poverty and unemployment," he added.

The long-term economic plan also stresses the need to create an attractive investment climate so as to boost foreign investment and support economic growth.

Former Bappenas chairman Kwik Kian Gie said he doubted the 2025 poverty reduction target could be achieved. "It is not realistic as no strategic efforts are being made to achieve the target," he said.

The government recently launched a number of new poverty-alleviation programs, including the National People's Empowerment Program (PNPM) and the Family Hope Program (PKH). Both are being partly financed by soft loans from the World Bank and the Japan Bank for International Cooperation (JBIC).

With the enactment of the Long-Term Development Plan Law, future presidents will be required to base their development programs on the visions set out in the new legislation.

The law's targets and priorities are divided into four development periods: Period I (2005-2009), Period II (2010-2014), Period III (2015-2019) and Period IV (2020-2024). It features eight goals, one of which is the creation of a competitive society so as to bring about prosperity and well-being in society.

Main Goals

- Raising per capita income to the level of middle-income countries, and reducing poverty rate to below 5 percent.

- Improving quality of human resources, including enhancement of women's roles in development.

- Ensuring a stable economy, with agriculture and mining being prioritized.

- Bringing about integration of infrastructure in the transportation and energy sectors, respectively.

- Ensuring clean governance backed by professional administrators.

Monday, April 23, 2007

Hypermarkets Allowed in City Centers

Monday, 23 April, 2007 | 14:29 WIB

TEMPO Interactive, Jakarta: The Zoning Decree that Parliament passed on March 26 regulates the zoning of modern market.

As for more-detailed arrangements, they will be included in the regional zoning made by regional governments.

Based on the zoning policy, for example wholesalers are allocated in suburban areas, hypermarkets in the major cities, supermarkets in satellite cities and mini-market in districts and sub districts.

“Modern markets cannot be built anywhere, although the allocation is not strict,” said Hermanto Dardak, Director General of Zone Planning at the Public Works Department, when contacted on Thursday (19/4) in Jakarta.

The arrangement is related to the environment, such as traffic jam potential and facilities, as well as infrastructure needs.

“What hasn’t talked about yet is competition with traditional market,” said Hermanto

The Trade Department complained about the zoning in the Government Regulation Draft on Modern Markets.

RR Ariyani

Govt scraps duties on imported raw materials of automotive spare parts

Jakarta (ANTARA News) - The Finance Ministry has decided to scrap final duties on imported raw materials of automotive spare parts to help encourage the domestic industry.

The provisions were contained in Finance MInister`s Regulation No.34/PMK.011/2007 dated April 3 which will come into force 30 days after its date of issuance, the ministry`s spokesman, Samsuar Said, said on Monday.

He said the privilege would be valid for one year after the regulation became effective.

Any application for the privilege should be addressed to the Directorate General of Customs and Excises. The application must be such data as taxpayer`s code number, business permit issued by the relevant ministry/agency, list of materials, the specifications and prices of goods and a statement of verification issued by a government-sanctioned surveyor, he said.

Mexico along with Indonesia, Pakistan, and Turkey are the emerging markets to watch

TORONTO, April 19 /CNW/ - The latest findings from the Grant Thornton International Business Report (IBR) have identified Mexico, Indonesia, Pakistan, and Turkey as the next generation of emerging economies set to have significant impacts on the world economy. These countries may match or even overtake some of the commonly identified BRIC economies (Brazil, Russia, India and China) which are expected to join the global economic powers.

Although these economies are unlikely to match India or China in strength, they certainly have the potential to rival Brazil and Russia in terms of economic strength.

According to Alex MacBeath, Executive Partner & CEO of Grant Thornton LLP in Canada and global leader of privately held business services for Grant Thornton International: "Indonesia and Pakistan, with their large populations, have the potential to grow their labour-intensive exports and could capitalize on the process of low-cost production that mainland China has so successfully exploited."

Mr. MacBeath points out that Mexico, with the world's 14th largest economy, is benefiting from its close trading ties with Canada and the U.S. through the North American Free Trade Agreement (NAFTA). "Mexico is well-placed to play a more significant role in the Americas. Turkey is also expanding robustly and is on the path to making the transition to a modern industrial economy and is set to increase its influence in Western Europe and the Middle East."

According to Hector Perez from Salles, Sainz-Grant Thornton in Mexico:

"The reason for such an outstanding performance from the Mexican economy during 2006 was the unprecedented macroeconomic stability, a steady Mexican peso and a low inflation rate of 4%.

"Mexico is an export-oriented economy, dominated by a mixture of industry and agriculture. It is the biggest exporter in Latin America (US$250.3 billion) and the 15th in the world, as well as the only member of the Organisation for Economic Co-operation and Development (OECD) in the region. Furthermore, Mexico received the highest figure of foreign direct investment headed to Latin America and is top of the list in terms of per capita GDP. It is one of the most open economies in Latin America and has signed 12 free trade agreements with 43 countries. There is no doubt that it will be one of the top emerging markets in coming years."

Hendra Winata from the Grant Thornton firm in Indonesia commented: "The Indonesian economy continues to strengthen with the help of a vigorous policy reform agenda aimed at reviving investment and easing inflationary pressures.

As a result the country's growth target of 6% looks very achievable.

"Indonesian commodities have also seen strong demand from both increased household consumption and externally from mainland China, India and the Eurozone. Although it is expected that Indonesia's economic recovery will remain on track, any global economic slowdown would be one of the main challenges for the country to resolve."

Aykut Halit from Arkan & Ergin Grant Thornton in Turkey commented:

"Turkish economic growth rates over the past five years have averaged 7.5% with foreign trade averaging 26% a year. These rates are unprecedented and reflect the great potential of Turkey brought forward thanks, among other things, to continued political stability over the same period. Foreign direct investment has come in at record levels from Europe, North America and the Middle East as have many international banks. Turkey is also set to be boosted by becoming a full member of the European Union in the near future."

Notes to editors

Grant Thornton International started a major annual survey of the attitudes and expectations of small and medium-sized businesses in 1992 called the European Business Survey (EBS). In 2003 the research project was widened to an international perspective covering medium-sized businesses and renamed the International Business Owners Survey (IBOS).

In 2007, the survey's name was changed from IBOS to the International Business Report (IBR). The IBR survey draws upon 15 years of trend data for original EBS participants and 5 years for original IBOS countries. 15 year trend data is available for: France, Germany, Greece, Ireland, Italy, the Netherlands, Poland, Spain, Sweden, Turkey and the UK, while 5 year trend data is available for Australia, Canada, Hong Kong, India, Japan, Mexico, Singapore, South Africa and the US.

Grant Thornton International will donate US$5 to UNICEF for every completed IBR questionnaire. In 2007 this will result in a donation of over US$35,000.

The research was conducted by Experian Business Strategies Limited and Harris Interactive. All figures were correct at time of going to press. To find out more about IBR and to obtain details of IBR reports and results please visit www.internationalbusinessreport.com.

About Grant Thornton International

Jamsostek adopts int'l standardized quality management

Ridwan Max Sijabat, The Jakarta Post, Jakarta

State-owned workers' insurance company PT Jamsostek has received ISO certification setting international standards for the company in providing services to its customers.

The ISO 9001:2000 certification was presented by president of PT SGS Indonesia Robert James Rom Paris to Jamsostek president director Hotbonar Sinaga in a ceremony on the weekend.

Rom Paris said the certification would prompt a cultural change in Jamsostek's management and the company's future direction.

"The handing-over of the certificate involves a long process and demands the company's commitment to implementing internationally standardized quality management in investing its assets and providing a service to the public," he said.

"The certification is an international recognition of the company in terms of the delivery of services to satisfy customers, good corporate governance and transparency."

Rom Paris said the certification would also provide motivation for Jamsostek to give better service to its customers.

The certification was granted after SGS Indonesia and PT Surveyor Indonesia conducted a five-month audit of Jamsostek's investment and service systems from December 2006 to March 2007.

Hotbonar said the certification would improve the company's status as a national financial institution as well as improving its services to workers as customers.

He said that receiving the certification meant Jamsostek had to ensure its investments and services to workers followed international standards.

"We are required to comply with international quality management in investing our assets and delivering services to our customers. For instance, Jamsostek will deposit its funds in banks certified by SGS and protect our workers with social security programs," he said.

Currently Jamsostek manages almost Rp 50 trillion (approximately US$5.3 billion) in assets with some 25 million workers registered with the company. However, only about 7.9 million workers are active and many employers have reported only a part of their workforce or their gross monthly salaries to Jamsostek.

Jamsostek's director of operations and services Achmad Anshori said the application of international standardized quality management in operations and services was expected to improve the company's credibility in the eyes of customers and attract more workers and employers to take part in social security programs.

"We are required to be professional in carrying out programs and delivering satisfactory service to all clients," he said.

"However, the awarding of ISO certification can be revised if the company is found to have failed in its implementation of international service standards because the certification will be audited every six months," he added.

Jamsostek is yet to implement an online system and one-day service to customers in accordance with ISO standards and continues to maintain that a ministerial decree requires workers to wait for six months before withdrawing funds in the pension benefit program.

Modern markets no threat: Survey

Ika Krismantari, The Jakarta Post, Jakarta

Modern retail outlets in the country such as hypermarkets and minimarkets do not pose any threat to wet markets and traditional grocery stores despite their massive expansion during the past two years, a survey shows.

The latest survey by Nielsen shows a "strong indication" that the presence of hypermarkets or other modern groceries did not affect the existence of wet markets and traditional grocery stores.

Nielsen director for retailer services Yongky Surya Susilo said during the presentation of the survey last week the competition between hypermarkets and traditional markets was nothing to worry about as the two retailing channels served different market segments.

"The surviving wet market traders prefer to cater to food sellers or small restaurants, which buy the goods on a daily and massive bulk basis. They are also focusing on medium-income house wives, while hypermarkets are focused on high-income and young and practical or image-seeker moms," he said.

He rebuffed the general assumption that hypermarkets were growing rapidly in the country at the expense of traditional markets, saying that existing traditional grocery stores were still dominant and growing, reaching almost 1.7 million in 2005 as compared to modern retail stores, which had only reached about 8,000 stores in the same period.

"Even in Jakarta, the number of the outlets of supermarkets or hypermarkets decreased to 196 stores in 2006, as compared to 233 in the previous year, while the traditional stores increased to 91,221 stores from 88,974 during the same period," Yongky said.

He also cited another survey that gave surprising results, indicating that the majority of urban Indonesians did their in traditional outlets even though the data did not include how much money was spent in each type of outlet.

The 2006 survey, which covered a sample of 1,385 respondents in four major cities -- Jakarta, Surabaya, Bandung and Makassar --, revealed that people visited traditional outlets 25 times on average per month, while they only visited modern outlets two times per month.

The respondents also said that they tended to visit wet markets on average 12 times per month, while the frequency of visits to supermarkets and minimarkets only averaged three times and five times per month.

The survey comes amid growing criticism of the rise of modern retail outlets, particularly hypermarkets and minimarkets.

The government is expected to issue a new retail regulation in the middle of this year to curb the rapid spread of modern retailers in the country by imposing a zoning system.

Earlier in March, the Alliance of Traders Associations, representing traditional retailers, urged the Jakarta administration to issue a gubernatorial decree on market regulations, saying the existing 2002 city ordinance on modern retail restrictions was not effective.

The alliance claimed that traditional markets throughout the city had suffered financial losses of up to 75 percent, and some of the traders made less than Rp 50,000 daily last year.

In response to this, Yongky said that some efforts could be made to empower the wet markets in order to go head-to-head with modern retailers, including revitalizing markets in line with the changes in the geographical surroundings and focusing on business generators.

Indonesia, Malaysia Can Become Major Asian Powers, Says Historian

By Mohd Nasir Yusoff

PADANG (Western Sumatra), April 19 (Bernama) -- Indonesia and Malaysia are on the right track and period of time to collaborate and emerge as major powers of Asia, an Indonesian historian said today.

Des Alwi, 80, who used his close relationship with past Malaysian leaders to play a major role in resolving the Indonesian Confrontation with Malaysia, said both countries had the strength and edge to achieve that.

"I am sure that if both countries were to collaborate with the strength and edge that they have, they can emerge as major economic and diplomatic powers," he told Malaysian journalists here.

Des said that after having enjoyed 50 years of diplomatic relations, the time was now right for both Indonesia and Malaysia to look 50 years ahead and see how they can overcome obstacles impeding efforts to forge greater cooperation for mutual benefit.

Earlier, Des had attended a one-day seminar on the Bung Hatta annual lecture in appreciation of 50 years of diplomatic relations between Indonesia and Malaysia at the Andalas University, here.

Des said their efforts would be all the more possible considering that relations between both countries were at their best following the close relationship between President Susilo Bambang Yudhoyono of Indonesia and Prime Minister Abdullah Ahmad Badawi of Malaysia.

Meanwhile, a representative of Bung Hatta's family, lecturer Sri Edi Swasono said in his speech that in consolidating their relations, Indonesia and Malaysia should tide over minor obstacles for bigger achievements of mutual benefit.

He expressed amazement at the wisdom of Malaysian leaders in charting a path out of the economic recession without having to bow to the demands of foreign powers.

Prof Datuk Dr Zainal Kling of Malaysia, in his lecture, said that under the leadership of Abdullah, more emphasis was given to Malaysian-Indonesian camaraderie and that consultations and discussions formed the basis of bilateral relations.

Western Sumatra Chamber of Commerce and Industry President Asnawi Bahar said focus should be given to tourism, agriculture, plantations and fisheries in the effort to enhance development of the region with Malaysian assistance.

"Small industries of both countries should be encouraged to step up trade between them, particularly in the export of handicraft to Malaysia," he said.

-- BERNAMA

Indonesia to give import tax exemption on cars above 3,000 CC

Jakarta (ANTARA News) - With a view to protecting the automotive industry in Indonesia, the government will only grant an import tax exemption on cars above 3,000 cc.

"Only cars above 3,000 cc will be exempted," the director general for transportation equipment industries, Budi Darmadi, told ANTARA News here on Sunday.

Some automotive producers in the country were worried that the government might open its market to cars of all categories in the framework of the Japan-Indonesia Economic Partnership Agreement (JIEPA) currently still in the making.

Budi said the government would not liberalize its market for cars of all categories because the automotive industry at home had already developed not only to meet domestic needs, but also for exports.

Under the current circumstances, he said the tax exemption would only apply to cars above 3,000 cc while cars below that would continue to enjoy protection.

"We have not produced cars with engines above 3,000 cc and likely will not do it in the near future or will not completely include it in our development plan," he said.

He said the local market share of cars above 3,000 cc was still relatively small as the cars were still considered a luxury and therefore their tax reached more than 75 percent.

He said the government would not offer to liberalize the market for cars below 3,000 cc to Japan because the domestic industry was just developing the type of cars such as Toyota Innova and Fortuner that have engines above 2,000 cc.

"So far the focus of development is on multi-purpose vehicles, sport utility vehicles and small sedans to meet both the domestic and export market," he said.

Budi admitted that the offer to liberalize the market of cars above 3,000 cc was not yet settled because Japan still sought for the liberalization of cars below 3,000 cc.

"Japan wishes for the liberalization of the market for all categories. We will not open the market of cars that we have already made and will make in the future," he said.

In the 3,000 cc segment Japanese cars will compete with cars from Europe and the US such as Mercedes, BMW and Ford.

Sunday, April 22, 2007

Freeport reaches agreement with Indonesian miners

Jakarta (ANTARA News) - Thousands of mine workers in Indonesia's remote Papua province on Sunday returned to work after a subsidiary of US firm Freeport McMoRan agreed to salary and benefit demands, a labour activist said.

"We finally reached an agreement last night at around 11:00 pm (1500 GMT) and today all workers who are on shift have returned to work," said Penina arma, the secretary general of Tongi Papua, a non-governmental organisation involved in the three-day protest and the negotiations.

More than 2,000 workers from the giant gold and copper Grasberg mine started protesting peacefully Tuesday at the headquarters of PT Freeport Indonesia, which operates the mine, just outside the town of Timika.

The protracted dispute centres on demands for higher wages, improved welfare, and better access to higher-level jobs for Papuan workers.

The rally helped push world copper prices to 8,000 dollars a tonne amid concerns disruptions could lead to a drop in stockpiles of the metal.

Karma said that the agreement had been reached with the executives of Freeport Indonesia and there was no reason to take the dispute further.

The protestors had initially demanded a teleconference with Freeport McMoRan executives in the United States.

Mine workers had demanded a minimum monthly wage of at least 3.2 million rupiah (352 dollars). The negotiations finally settled on a range of 3.1 to 3.6 million rupiah, Karma told AFP.

'Innovation, investment key to Asia's dynamism'

The Jakarta Post

Riyadi Suparno, Boao, Hainan, China

Asian economies need to embrace innovation and invest more in technology so that they will continue to lead the world with their economic miracle, say leaders attending the Boao Forum for Asia conference.

"Rapid and peaceful economic development in Asia is a miracle," Bill Gates, chairman of Microsoft, told the Boao forum, "but it needs more investment in education and technology" to keep the miracle going.

Investment in education, he said, was necessary to improve the welfare of common people as the benefits of educational attainment to wealth creation are beyond doubt, and investment in technology should support that.

Investment in technology, said Gates, should focus on industries related to three big areas that have revolutionized the world: personal computing, the Internet and mobile telephony.

"A PC connected to the Internet is the greatest achievement mankind has ever created," he said, adding that mobile technology has made them even more powerful.

Therefore, he said, Asian economies, especially the big players like China and India, should invest more in research and development, especially in these three areas, to keep the miracle going, Gates said.

Since 2000, Asia's economy has grown by over 6 percent per annum, contributing to 20 percent of world economic growth. Today, Asia's economy, trade and foreign exchange reserves respectively take up a quarter, one-third and three-quarters of the world's total.

Wu Boangguo, the third-most important person in China after the president and prime minister, said that to maintain Asia as the most dynamic region in the world, there should be enhanced cooperation in science and technology.

"The growth of wealth and the increase of people's well-being increasingly hinge on the accumulation of knowledge and innovation," said Wu, currently chairman of the Standing Committee of the National People's Congress.

"In the face of a global trend in scientific and technological development and fierce competition, only by giving top priority to scientific and technological innovation can we Asian countries seize the opportunity and take the lead in development," he added.

On China, Wu explained that his government now gives priority to independent innovation to turn China into an "innovation-based country" by 2020, when scientific and technological advances should contribute to over 60 percent of economic growth, imported technologies should be brought down to below 30 percent and research and development expenditures should increase to over 2.5 percent of GDP.

"It is a national strategy we pursue in all endeavors of modernization," he said.

Speaking at the same forum, Pakistan Prime Minister Shaukat Aziz said that despite technological advancement achieved in many countries in Asia, Asia continues to be seen as a low-cost production house for Western brands and, therefore, it needs to move up the "value-chain" by innovating in products and services.

"Asian companies need to continue acquiring companies in the West and creating their own brands, as brand creation boosts both value and return," Aziz said.

New standards issued to streamline public-sector audits

The Jakarta Post

JAKARTA (JP): The Supreme Audit Agency (BPK) launched a new set of public-sector audit standards Thursday that are expected not only to improve the quality of public sector audits, but also remove misunderstandings arising out of audits.

"The new auditing standards must be used as the basis for all audits conducted on institutions and programs funded by the treasury, covering not only the national and provincial budgets, but also state-owned and local government firms," BPK head Anwar Nasution said during the launch of the new standards.

The State Financial Audit Standards (SPKN) supersede the State Audit Standards (SAP), which were drawn up by the New Order administration. The old audit rules failed to take account of the public-sector accounting standards. It also separated audits on routine and development expenditure, which often overlapped.(Ary Hermawan)

Saturday, April 21, 2007

Investors want clarification on laws

Andi Haswidi, The Jakarta Post, Jakarta

Both local and foreign investors are seeking clarification from the government on its commitment to providing a more conducive investment climate amid growing demands for the expansion of the business sectors that are closed to foreign investors.

"Investors are puzzled as regards the government's commitment to promoting investment, given that some departments are lobbying for the negative list to be expanded," Indonesian Employers Association chairman Sofyan Wanandi told The Jakarta Post on Friday, referring to the list of sectors that are closed to foreign investment.

"There are some people who seek to promote a narrow-minded view of nationalism and the instituting of counterproductive protectionist measures," he said.

Sofyan, together with a group of foreign investors, met Trade Minister Mari Elka Pangestu on Thursday and Investment Coordinating Board chairman Muhammad Lutfi on Friday to seek clarifications.

Also present at the meetings were representatives of various overseas business associations and chambers of commerce from countries such as Japan, the United States, South Korea and the Netherlands.

After meeting with Lutfi, Sofyan said the investors were satisfied by Lutfi's clarifications, which basically reaffirmed the government's commitment to pressing ahead with the implementation of the new Investment Law, which has been drawn the ire of left-wing and ultra-nationalist circles.

According to Sofyan, the BKPM chairman said any restrictions on foreign investment would be in line with the spirit of the legislation, which is designed to ensure equal treatment for both local and foreign investors.

"Lutfi also said the negative list had not been finalized, but promised that it would be ready within the next one to two months," Sofyan said.

Earlier, Minister Mari had said that a series of interministerial meetings, chaired by the coordinating minister for economy, would be held in the near future to determine which sectors would remain out-of-bounds to overseas investors.

A number of populist economists have been loudly demanding that the government increase the number of business sectors that are closed to foreign investment. They argue that the expansion of the negative list is necessary in order to protect local firms.

A number of ministers have also called for the expansion of the list. Industry Minister Fahmi Idris, for example, said the tobacco and sugar refining industries should remain off-limits to foreign investment.

The government has come under pressure to delay the introduction of the legislation, which left-wing and nationalist groups claim is too liberal.

A number of civil society groups, including the Institute for Global Justice, recently announced plans to challenge the constitutionality of the legislation in June, arguing that it fails to protect the interests of the majority of the Indonesian people, and was specifically framed to placate foreign investors.

Legislator Hasto Kristianto of the Indonesian Democratic Party of Struggle, which staged a walkout during the House plenary session that passed the new legislation, said the negative list was a tool that could be used by government to help local industry and improve the country's industrial capabilities.

Investment set to kick in to drive economic growth

Urip Hudiono, The Jakarta Post, Jakarta

With the enactment of the new Investment Law, the central bank says it expects that Indonesia will be able to attract more foreign direct investment (FDI) -- rather than just portfolio investments -- so as to produce higher and more sustainable growth this year.

Bank Indonesia Governor Burhanuddin Abdullah said Friday that with the more pro-business Investment Law, domestic investment should also increase.

The central bank, therefore, believed that investment in the real sector would become the main engine of growth for the country's economy this year.

"The past two years has seen growth being built on consumption and exports. However, we expect investment to be the main growth engine this year," he said.

Burhanuddin said investment would have to grow by 13 percent this year, from only 2.9 percent last year, to secure overall economic growth of between 5.7 and 6.3 percent.

For her part, Finance Minister Sri Mulyani Indrawati has stated that 12.9 percent growth in investment would be needed to achieve the government's 6.3 percent growth target for this year, and 6.8 percent for next year. BI is predicting growth of between 5.7 and 6.7 percent for 2008.

Realized FDI increased 15 percent to US$2.99 billion in the first quarter, while new FDI approvals jumped sixfold to $14.13 billion in the same period, the latest data from the Investment Coordinating Board (BKPM) shows. The BKPM figures do not include investments in the oil, gas and mining sectors, or the financial services sector, which are monitored by other agencies.

Burhanuddin said that foreign investment flows into Indonesia still largely took the form of short-term portfolio investments -- mostly invested in the stock market, central bank bills and government bonds.

Apart from government bonds, the proceeds of which can be used to finance infrastructure projects, investments in the stock market and central bank bills provide only a limited contribution to growth, and leave the country vulnerable to capital flight at the slightest economic shock.

BI has in the past warned that up to $10 billion invested in the capital markets could be prone to capital flight. However, it has remained upbeat about monetary stability, given that the country's foreign exchange reserves are likely to reach $51 billion by the year's end.

Speaking separately, BI Deputy Governor Aslim Tadjuddin said that Indonesia's forex reserves had reached $49.4 billion this week, from $47.6 billion last month.

Burhanuddin further said that the current stability in the country's macroeconomic situation and the recent passing of the Investment Law were expected to lead to eventually lead to a portion of the portfolio investments being converted into longer-term FDI.

The business community, however, was still awaiting the issuance of the ancillary regulations necessary to give effect o the new Investment Law, especially those listing the sectors that are will remain closed to foreign investment.

Burhanuddin also warned of the need for the banking industry to keep non-performing loans in check, particularly those resulting from poor debt management, so that the industry would have more room to increase lending.

"Lower NPLs mean lower provisions to cover them, so that the difference can be used for more productive lending," he said.

The country's banks have been criticized for their sluggishness in increasing lending to the real sector, preferring instead to invest their excess funds in central bank bills. Total outstanding BI bills stood at Rp 237 trillion in February, and are expected to reach Rp 300 trillion by the year's end. This will cost the central bank at least Rp 100 trillion in interest

Friday, April 20, 2007

Tax for Industry that Produces Pollution

Friday, 20 April, 2007 | 16:41 WIB

TEMPO Interactive, Jakarta: The implementation of sanctions over industry that produce pollution will be more effective than a moratorium of new vehicle manufacturing. Industrial pollution, said former Coordinating Minister for the Economy Rizal Ramli, was one the causes of the green-house effect that affects global warming.

“There must be a financial sanction such as tax so that they reduce pollution gradually,” he said at the break of a discussion, “Settlement and Rehabilitation of Ecological Justice” yesterday (04/19). He responded to the plan of Environment Minister Rachmat Witoelar's proposal of moratorium of new vehicle production if air pollution could not be reduced.

So far, developed countries, said Rizal, have always accused Indonesia as the agent of global warming by virtue of deforestation. State and multinational companies that produced pollution and the greenhouse effect should have paid Indonesia for any pollution they created.

However, developed countries such as the US in fact refused to be blamed and to sign the Kyoto Protocol and Carbon Emission Trading (CET). CET is a policy which regulates that industry be given the maximum pollutant rate that is admissible. Should it be abundant, industry should compensate.

NININ DAMAYANTI

Local lenders living on borrowed time, warns BI

Urip Hudiono, The Jakarta Post, Jakarta

Indonesia's banks may lose out to their regional competitors when the free trade and services agreement among Southeast Asian nations is fully implemented in 2015.

Syamsul Arifin of Bank Indonesia's international affairs unit said Thursday that most of the country's banks were still far from being efficient or capable of going head to head with their regional rivals.

He said that the local banking industry's average interest rate spread -- the margin between its lending rates and deposit rates, which is used to cover operating costs and produce profits -- was among the highest in the region.

"The spread stands at between 5 and 7 percent in Indonesia, while in other countries -- like Singapore and Malaysia -- it's only between 2 and 3 percent," Syamsul said during a discussion hosted by BI Thursday.

"This clearly raises the question of whether Indonesian banks -- with all their inefficiencies -- will really be ready to compete in the upcoming ASEAN single market?"

The interest rate spread is perhaps the simplest yardstick for gauging competitiveness in the banking industry. While banks that offer higher deposit rates may be able to attract more funds from the public, bank profits actually depend on the ability of lenders to extend more loans. Naturally, businesses seeking loans will be drawn to those banks that offer the lowest lending rates.

Syamsul further said that the matter was a cause of major concern to BI, and had to be quickly resolved through the setting out of policies to make local banks aware of the situation and encourage them to run their businesses in a healthier manner.

BI director for banking policy and regulation, Halim Alamsyah, had previously warned of the inefficiencies plaguing local banks.

He pointed out that their overheads were often up to 1.5 times those of banks in Singapore, Hong Kong and Japan, while many Indonesian banks still applied risk premiums -- additional lending surcharges to take account of specific risks on the part of particular borrowers -- of up to 2 percent, while international best practice limited such surcharges to only 1 percent.

Accordingly, Halim said BI was planning to issue regulations to encourage greater efficiency in the banking system.

Inefficiencies in the banking industry may explain why lending rates have been relatively slow to come down -- they still stand at an average of 14 percent -- even though the central bank's benchmark rate -- and the Deposit Insurance Agency (LPS)'s maximum rate for guaranteed rupiah deposits -- have both declined to 9 percent.

The slow progress in improving Indonesia's investment climate and infrastructure, and in reducing red tape, all of which have increased the cost of doing business here, only adds to the problem. Indonesia is ranked among the world's least competitive nations and as one of the riskiest places for doing business.

High lending rates and an uncertain business environment only serve to discourage businesses from borrowing.

All this comes on the back of the decision by ASEAN to bring forward its plan to form a European Union-style single market allowing for the free movement of goods, services and investment in 2015. In January, ASEAN also signed a free-trade agreement with rising global economic giant China, which will come into effect this July.

Analysts have long been warning that Indonesia could lose out badly in the services sector -- which also includes the banking industry -- with the country already running a deficit of up to $10 billion even without the free market -- and have urged the government to take action to improve the situation.

The head of the Finance Ministry's Fiscal Policy Agency, Anggito Abimanyu, recently said the government would continue harmonizing its taxation and customs regulations with the other ASEAN countries.

Thursday's discussion at BI was held in advance of the central bank's planned launching today of three books highlighting the challenges facing Indonesia in the ASEAN and global free-trade markets. BI Governor Burhanuddin Abdullah and Trade Minister Mari Elka Pangestu will address a seminar on the topic to mark the launching of the books.