Govt: 5% of state firm officials have yet to report wealth

Nani Afrida, The Jakarta Post, Jakarta | Fri, 12/31/2010

The State-Owned Enterprises Ministry revealed Friday that up to 5 percent of the total number of officials working at state firms had yet to submit wealth reports.

 There are currently around 7,150 officers working for state firms.

“About 95 percent of officers have submitted wealth reports,” SOE Minister Mustafa Abubakar said, adding this was an improvement on the figures in June  when only 59 percent of officers had reported their wealth.

Officers who had failed to submit reports were possibly waiting for decrees for new positions or about to retire.

State firms book net profit of Rp 84.8t in 2010

Nani Afrida, The Jakarta Post, Jakarta | Fri, 12/31/2010

Indonesia's 141 state firms booked a total of Rp 84.8 trillion (US$ 9.4 billion) in net profits this year, State Owned Enterprises Minister Mustafa Abubakar said in Jakarta on Friday.

“This was excluding profits from 17 state firms listed on the Indonesia Stock Exchange,” Mustafa said, adding that he was pleased with the result. Last year, state firms booked Rp 74 trillion in profit.

According to separate reports, the 17 state firms listed on the Indonesian bourse gained Rp 37.9 trillion in net profits during the third quarter of this year.

State firms concentrating in the energy sector had accounted for the biggest portion of the profits, contributing Rp 33.3 trillion, Mustafa said.

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Rupiah Completes Second Annual Gain as Economy Attracts Funds

Bloomberg, by Khalid Qayum - Dec 31, 2010

Indonesia’s rupiah traded at more than a one-month high, completing its second consecutive annual gain, as the nation’s improving economy and relatively high yields helped attract funds from abroad. Bonds advanced.

Global funds bought $2.3 billion more of the nation’s shares than they sold this year through Dec. 29, helping drive the Jakarta Composite Index 46 percent higher. Foreigners boosted their holdings of Indonesian government debt by 81 percent to 195.3 trillion rupiah ($21.8 billion) as of yesterday, finance ministry data shows.

“Stable economic growth and foreign investors’ need for quality investments helped the rupiah to gain,” said Wiwig Santoso, head of treasury and markets at PT Bank DBS Indonesia in Jakarta.

The rupiah rose 0.1 percent to 8,978 per dollar as of 3:10 p.m. in Jakarta, taking this year’s advance to 4.6 percent, according to data compiled by Bloomberg. The currency earlier touched 8,963, the strongest level since Nov. 26.

Southeast Asia’s biggest economy will expand at least 6 percent this year, following growth of 4.55 percent in 2009, Bank Indonesia Governor Darmin Nasution said Dec. 27. President Susilo Bambang Yudhoyono is targeting annual growth of as much as 7.7 percent by the end of his second term in 2014, he said Aug. 16.

The central bank on Dec. 29 tightened curbs on banks’ foreign-exchange holdings and overseas borrowing to help damp capital inflows. Banks must set aside 5 percent of their total foreign-exchange holdings as reserves as of March 2011, from 1 percent currently, and limit short-term overseas borrowings to 30 percent of their capital from next month.

Foreign funds also helped the government’s benchmark bonds to gain in 2010, pushing the yields down by the most since 2006.

The yield on benchmark 11 percent note due in November 2020 fell 251 basis points to 7.71 percent, more than double the 3.37 percent for similar-maturity U.S. government debt, according to midday prices provided by the Inter-Dealer Market Association.

The rate reached 7.02 percent on Oct. 14, the lowest level since the debt was sold in May 2005.

Bank Indonesia’s benchmark interest rate of 6.5 percent compares with the Federal Reserve’s near-zero rate.

To contact the reporter on this story: Khalid Qayum in Singapore at kqayum@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net

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Indonesia Can Achieve `Sustainable' Economic Growth of 8%, Ambassador Says

Bloomberg, by Greg Ahlstrand and Femi Adi - Dec 30, 2010

Indonesia can achieve economic growth of 8 percent that is driven by domestic as well as international investment, if regulatory clarity and infrastructure in the country are improved, U.S. Ambassador Scot Marciel said.

Scot Marciel, U.S. ambassador to Indonesia.
Photographer: Dimas Ardian/Bloomberg

“Indonesia’s growing around 6 percent this year,” Marciel said in an interview in his office at the U.S. Embassy in Jakarta. “I think that could reach 8 percent sustainably, without tremendous difficulty, by addressing some of the infrastructure issues and opening up a little bit more.”

President Susilo Bambang Yudhoyono seeks to expand Southeast Asia’s biggest economy by as much as 7.7 percent and create 10.7 million jobs by the end of his second term in 2014, he said in his annual state-of-the-nation address Aug. 16. Indonesia also aims to cut the poverty rate by about a third to between 8 percent and 10 percent over the next four years.

“It’s not so much about making it attractive to foreign investors,” said Marciel, who was named ambassador in August. “To the extent Indonesia can work on infrastructure, and improve transparency and the regulatory environment and battle corruption, it creates a good environment for Indonesian businesses. Then foreign business will also find it attractive.”

Indonesia’s ranking in Transparency International’s 2009 corruption perception index improved to 111 from 126 in 2008, according to the watchdog’s website. It gained one place to 110 this year, 24 slots above the Philippines. The index measures the perceived level of public-sector corruption in 178 countries and territories around the world, the website says.

Roads, Ports, Rails

Inadequate roads, ports and railways mean orange juice from the Indonesian side of Borneo costs more than that from China, four times as far away, the Indonesia Logistics Association said in January. Logistics costs are the equivalent of 25 percent of gross domestic product in Indonesia, versus 19 percent in Thailand and 10 percent in the U.S., it said.

During U.S. President Barack Obama’s visit to Indonesia in November, he and Yudhoyono announced the Comprehensive Partnership, under which the countries will cooperate on education, environmental and climate change issues, defense and security, science and technology, investment and trade.

“We’ve made education a high priority; specifically trying to increase the number of students from Indonesia studying in the United States, and from the United States studying in Indonesia,” Marciel said. “Also to try to build partnerships between universities.”

Scholarship Drive

The U.S. will commit about $165 million over five years to promote cooperation on education, including scholarships such as the Fulbright program, funding for Indonesian students to study at U.S. community colleges and English-language training, Marciel said. Indonesia will provide 100 scholarships for American students to study in Indonesia, he said.

“We need to do a better job of making U.S. education accessible to Indonesians,” he said. “Over the past 10 to 12 years, the number of Indonesian students studying in the U.S. has actually fallen.”

The decrease is partly due to concern over costs, and partly to a “misperception” that a student visa is difficult to get, Marciel said. That misperception stems from revisions to visa procedures implemented after Sept. 11, 2001, he said.

“A lot of the problems or obstacles that came out of that have been dealt with, but the perception remains that it is extremely difficult to get a visa,” Marciel said. “We need to continue to explain to people that it’s very possible.”

Military Cooperation

In July, Defense Secretary Robert Gates said the U.S. will begin a “measured and gradual” relationship with the elite Indonesian military unit known as Kopassus after a 12-year gap. The decision to restore links was possible due to Indonesia’s progress in professionalizing the military since the fall of the dictator Suharto, Gates said at the time.

The move was criticized by New York-based Human Rights Watch, which said it “weakens U.S. standards for military cooperation globally.” U.S. Senate Foreign Relations Committee member Russ Feingold, a Wisconsin Democrat, also said he was “disappointed” by Gates’s announcement.

“Secretary Gates announced in July that we would begin taking limited steps toward re-engagement with Kopassus,” Marciel said. “That had not been possible in the past because of lack of accountability for past human-rights violations.”

Move to Democracy

Marciel said Gates stressed that the decision was based on Indonesia’s move to democracy, improved human rights record, and changes to the military, and that it would start with staff- level talks, which to date has been the extent of the engagement.

Regarding videos that surfaced in October showing men in military clothing torturing Papuan civilians, Marciel said: “The Indonesian leadership has made it clear the human-rights violations depicted in those videos is unacceptable. There’s nothing that I’ve seen that suggests that was Kopassus.”

Indonesian police had assured the U.S. that they were committed to investigating the videos and bringing the perpetrators to justice, he said.

“We are watching this very carefully,” Marciel said.

A challenge the U.S. faces in developing its relationship with Indonesia is convincing Indonesians it doesn’t have a hidden agenda, Marciel said.

“Indonesia is a democracy, and the people and the government have to decide what’s most important to them,” he said.

To contact the reporters on this story: Greg Ahlstrand in Jakarta at gahlstrand@bloomberg.net; Femi Adi in Jakarta at fadi1@bloomberg.net

To contact the editor responsible for this story: Greg Ahlstrand at gahlstrand@bloomberg.net

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RI seeking to join world`s major economies club

Antara News, Thursday, December 30, 2010

Bogor, West Java (ANTARA News) - Indonesia is expecting to become one of the world`s ten biggest economies in 2025 with its gross domestic product expected to reach US$3.7 to 4.7 trillion and the per capita income at US$12,000.

The country`s chief economic minister, Hatta Rajasa, said on the sidelines of a limited cabinet meeting on economy led by President Susilo Bambang Yudhoyono at the presidential palace here on Thursday he believed the target could be achieved because right now Indonesia has already been the world`s 16th biggest economy.

He said Indonesia even hoped it could become the sixth biggest in 2050.

"We will push Indonesia to become an advanced country and a world power," he said.

For that he said the government had held the meeting to design a road map to speed up and expand the country`s economy that would combine regional and sectoral powers.

"What we are discussing is focussing the master plan of the road map on targets and goals of the Indonesian vision until 2025," he said.

In the master plan the country`s economic potentials are mapped into six integrated economic clusters or corridors to make natural resources in each of the clusters exploitable fully.

The paradigm for natural resource exploitation has also been changed so that industrial developement would no longer depend upon extractive industries but manufacturing based on natural resources to increase the added value for Indonesia.

Based on the policy, he believed, regional income would jump four to six times higher than now.

"We have already identified all the corridors, So there won`t be no region that we would not turn into a new growth area based on natural resources. Natural resources will be turned into foreign exchange income. We will change natural resources into growth," he said.

As an example he said the Sumatra corridor which would be connected with Java to become a palmoil and metal mineral industrial clusters with the availability of infrastructure that connects the two islands through the Sunda Strait bridge.

He said the idea of economic development acceleration and expansion based on a corridor system that connects regional and sectoral powers was expected to be started as of 2011.

In view of that he said the master plan was expected to be finished soon and issued through a presidential decree in 2011.

He said the presidential decrees are inseparable from Law Number 17 of 2008 on national long-term development plans and therefore the masterplan would not change when the national leadership undergoes changes.

"That is the essence of what we were discussing," he said.

He said funding for the economic development would be from public-private partnership from home and abroad.

He said the investment portion based on the scheme would comprise more than 70 percent of the funding.

As of now, he said, the government has already prepared an investment climate to boost investors` optimism by improving the regulations in various fields including taxation and land ownership.

"So, it will be clear for us what we are going to build based upon the document, howmuch the cost would be. We are still discussing it and after it is done the results will be put into a single solid document," he said.

ICW demands PSSI publicize results of audit

The Jakarta Post, Jakarta | Thu, 12/30/2010

Indonesia Corruption Watch (ICW) has urged the Indonesia Football Association (PSSI) to publicize the results of an audit of the association among measures to uphold transparency and accountability.

Citing the freedom of information law, ICW coordinator Emerson Yuntho said ICW would mobilize soccer fans and non-government organizations to demand PSSI reveal the contents of the audit.

“So far the results of the independent audit were only made available to members of the PSSI. We really want the association to be transparent and accountable,” he said.

ICW will also ask the association about the recent sale of tickets to ASEAN Football Federation (AFF) Cup final matches.

“How much did the tickets cost? What factors were taken into account in pricing the tickets?” Emerson asked on Wednesday, as quoted by tempointeraktif.com.

Indonesian Banks Facing Stricter Forex Rules to Tame ‘Hot Money’

Jakarta Globe, Francezka Nangoy & Faisal Maliki Baskoro | December 29, 2010

The central bank plans to compel domestic lenders to increase their foreign exchange reserves deposited at Bank Indonesia starting in March to rein in hot money that could threaten the country’s economic stability.

Rather than imposing capital controls, Bank Indonesia is seeking
to calm high levels of foreign direct investment by raising domestic
bank reserve rates and encouraging moderate loan-to-deposit
ratios.(JG Photo/Safir Makki)

“The reserve requirement will be increased in two stages: to 5 percent on March 1, and then raised to 8 percent on June 1,” said Darmin Nasution, governor of Bank Indonesia. Currently, banks are required to set aside 1 percent of their foreign exchange deposits as reserves.

Analyst estimate that the move by the central bank could soak up as much as $2.5 billion in liquidity from the market.

BI has been wrestling with the surge in foreign capital in the past year as near-zero interest rates in the West and Japan have prompted investors to seek higher yields in emerging economies such as Indonesia. Although foreign funds support growth, they drive up prices and have the potential to create asset bubbles, which could create havok when they burst.

The central bank has refrained from raising its benchmark interest rate, instead opting to increase bank reserve requirements and introducing measures to require investors to keep their money in the country for longer periods of time.

“The policy will be implemented in stages to allow banks more time. The policy will be evaluated from time to time to reflect the real economic condition,’’ Darmin said on Wednesday.

Starting on Nov. 1, BI required lenders to set aside 8 percent of their rupiah deposits as reserves, up from 5 percent. The central bank also said it would introduce an additional reserve requirement in March that would penalize banks with loan-to-deposit ratios below 78 percent or above 100 percent.

Darmin said the country saw an influx of $16.2 billion worth of portfolio investment flow into the economy in 2010, while foreign direct investment rose to $12.2 billion in 2010 from $5 billion just a year earlier.

Another policy that will be implemented to minimize the risk of sudden capital flight next year limits the amount of size of short-term loans foreign entities take from a domestic bank to not more than 30 percent of the lender’s total capital. BI hopes the move will lead to more prudent management of the loans as well as longer credit terms. This policy is to take effect by the end of January.

Darmin added that with these measures there was no need for capital controls to cool inflows.

“What we need now is to manage the capital inflow by setting the reserve requirement, deepening the capital market and always being aware of global financial volatility,’’ he said.

Economist have hailed the move. “It is a positive step as it could reduce the cost of monetary operation,’’ said Destry Damayanti, an economists at Mandiri Sekuritas in Jakarta.

“This policy is needed to absorb excess liquidity in the market. This policy is a better alternative in stabilizing the economy compared to increasing the BI rate,’’ Destry said. She added that raising the reserve requirement to 8 percent might make it difficult for banks to channel foreign-exchange credit.

BI has kept its key rate at a record low 6.5 percent since August 2009, which while historically low for the country is among the highest in the region.

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KPK recovered Rp700 billion from corruption cases in 2010

Antara News, Wednesday, December 29, 2010

Jakarta (ANTARA News) - The Indonesian Corruption Eradication Commission (KPK) recovered state assets totaling Rp700 billion from convicted corruptors in 2010, a spokesman said.

"The total amount of state assets we have been able to recover this year is Rp700 billion. But the amount retrieved since KPK`s formation runs into trillions of rupiah," KPK Deputy Chairman Haryono Umar said.

Speaking at a year-end press conference here Wednesday, Umar said the amount of state wealth recovered this year was the aggregate result of the settlement of tens of corruption cases.

During the year 2010, KPK investigators were able to settle 35 corruption cases.

The funds retrieved from the corruption cases had already been returned to the state treasury, he said.

KPK Chief Busyro Muqoddas said beside continuing to enforce the law on curruptors, the commission would in 2011 also draw up a concept to prevent corruption.

President wants state budget funds spent in result-oriented ways

Antara News, Tuesday, December 28, 2010

Jakarta (ANTARA News) - President Susilo Bambang Yudhoyono has asked ministers and the heads of all government agencies and state institutions to develop a result-oriented mindset in the spending of state budget funds.

In his address at a function to hand 2011 Budget-funded Project Porposal Lists (DIPA 2011) to cabinet ministers, state institution chiefs and provincial governors at the State Palace here on Tuesday, the President asked that the budget be used in more innovative, creative, and proactive manner.

"Let us change our mindset on the use of State Budget funds from input-based to output- and outcome-based. Stop using budget funds in the `business as usual` way," the president said.

On the occasion the head of state asked state officials, ministers, and governors to observe efficiency on their service trips, meeting activities, operational as well as non-operational activities.

"Do not be wasteful. Conducting a meeting at a hotel outside Jakarta instead of at a government building while all participants are from Jakarta is wasteful," the president said.

The head of state also asked that activities which were funded with foreign loans should be conducted as efficiently as possible.

The 2011 State Budget consists of state revenues and grants amounting to Rp1,104.9 trillion, up 11.3 percent from the previous year`s budget.

The allocation of the State Budget is Rp1,229.6 trillion which represents an increase of 9.2 percent from the previous year`s budget while the budget deficit was projected to amount to Rp124.66 trillion, or 1.8 percent of gross domestic product.

State banks distribute Rp 15.9 trillion in micro loans this year

Nani Afrida, The Jakarta Post, Jakarta | Tue, 12/28/2010

State Minister for State-Owned Enterprises Mustafa Abubakar announced Tuesday that as of Dec 23 state banks had disbursed Rp 15.9 trillion (US$1.79 billion) in micro loans, exceeding Rp 15.4 trillion amount targeted this year.

“I predict by the end of this year we will manage to distribute Rp 16.5 trillion in micro loans,” Mustafa told reporters in Jakarta.

According to Mustafa, state bank PT Bank Rakyat Indonesia (BRI) was the most active bank for micro loans, distributing Rp 9.6 trillion, exceeding its target by Rp 1.06 trillion.

The second largest micro lender was PT Bank Pembangunan Daerah (BPD), which distributed Rp 2.07 trillion in micro credit.

State bank PT Bank Mandiri also exceeded its target, distributing Rp 1.9 trillion. PT Bank Bukopin managed to disburse Rp 120 billion in micro credits.

However, state bank PT Bank Negara Indonesia (BNI), and PT Bank Tabungan Negara (BTN) are still striving to meet their targets.

BNI distributed Rp 1.05 trillion in micro loans, or only 65.7 percent of this year’s target.

“We will verbally reprimand them,” Mustafa said.

The government plans to disburse Rp 18 trillion in micro credits next year.

President calls for more economic optimism

The Jakarta Post, Jakarta | Mon, 12/27/2010

President Susilo Bambang Yudhoyono called on all parties to be more optimistic in their economic projections to help improve prospects in the coming years.

Yudhoyono made the remark during a limited cabinet meeting on economic projections for 2011. The meeting included a presentation from the Bank Indonesia governor.

The President said that fiscal and monetary policies were critical in pushing economic growth.

“Both have to be intertwined so that economic policies could attain the best results,” he said, as reported by kompas.com.

Job creation and guarding inflation were fundamental in stabilizing the macro economy and creating a conducive environment for economic growth, he added.

Yudhoyono said that prudent and accurate economic policies could bolster and boost Indonesia’s economy, including the real sector.

Oil Price Hikes Wreak Havoc With Fuel Subsidy Budgets

Jakarta Globe, Ririn Radiawati Kusuma | December 26, 2010        

State oil and gas company Pertamina looks set to lose money if the rise in crude oil prices continues, an official said.

A Caltex oil refinery near Brisbane, Australia. Oil prices
hit $91.41 per barrel on Sunday, the highest in two years,
on the back of rising demand during an unusually cold winter
 in Europe, and Indonesia is worrying about the effect of
 high prices on 2011state spending. Bloomberg Photo 

Pertamina spokesman Mochammad Harun said the company’s bottom line would take a hit as oil prices grew beyond the government’s allocation for fuel subsidies in 2010.

“We are still calculating what we have to pay to replace the subsidy allocation from the government,” he told the Jakarta Globe on Sunday.

Oil prices hit $91.41 per barrel on Sunday, the highest in two years, on the back of rising demand during an unusually cold winter in Europe.

Analysts said the cold snap, which happened earlier than expected, saw some speculators move to increase the oil price.

“OPEC estimated that the highest demand will happen in the end of December,” Rudi Rubiandini, an energy analyst from Institut Teknologi Bandung, said on Sunday.

Price rises, he said, would continue until mid-January before returning to normal in early February and hitting their lowest demand in May.

Crude oil prices will impact Indonesia’s oil subsidy allocation in December, Rudi said, as demand during the Christmas and New Year holidays would increase up to 10 percent above average. The current price is higher than the $80 per barrel mark the government wrote into its 2010 state budget.

The government and House of Representatives agreed on Dec. 9 to add 1.87 million barrels to the allocation of subsidized oil. Evita Legowo, directorate general of oil and gas at the Energy Ministry, said the government had already saved Rp 7.7 trillion ($855 million) as the average oil price earlier in 2010 was lower than the projected $80 per barrel.

The government allocated Rp 88.9 trillion in the stage budget to cover fuel subsidies this year, though Evita said it might only end up spending Rp 81.1 trillion after the addition in December.Harun confirmed the fuel subsidy allocation would not exceed the state budget allocation.

“The country will not lose anything, but on our side, we have to replace the loss caused by the oil price hike,” he said.

Rudi estimated Pertamina would pay Rp 750 billion more to meet the extra fuel demand in the final days of 2010.

65 percent of RI workers outsourced, contract-based

The Jakarta Post, Jakarta | Thu, 12/23/2010

Sixty-five percent of workers in Indonesia apparently work for outsourcing companies or are contract workers, indicating a more than double increase from the 2005 figure.

The president of the Confederation of Indonesian Prosperity Trade Unions, Rekson Silaban, said Thursday that five years ago permanent workers accounted for 70 percent of the total workforce in Indonesia, leaving only 30 percent working on an outsourced or contract basis.

“The data was cited by the World Bank and the ILO two months ago. That means only 35 percent of our workers are now permanent workers,” he told a press conference in Jakarta as quoted by tempointeraktif.com.

“That means that only 9.5 million people in Indonesia have permanent jobs through to retirement,” he said, adding that there were currently a total of 33 million formal workers in Indonesia.

Rekson expressed concern over the issue, reiterating that contract-based and outsourced workers were in a disadvantaged position and that they rarely won a case when facing their employers at the Industrial Relations Court.

Busyro Starts Work With Vow to Regenerate KPK in Indonesia

Jakarta Globe, Heru Andriyanto | December 20, 2010

Jakarta. Incoming antigraft czar Busyro Muqoddas started his first day on the job on Monday with a pledge to tackle problem cases that have led to charges that the country’s fight against corruption has stalled.

KPK Chairman Busyro Muqoddas pledged at his inauguration
to tackle the Gayus Tambunan and Bank Century cases. (JG Photo /
Yudhi Sukma WIjaya)

As he was sworn in at the State Palace by President Susilo Bambang Yudhoyono, however, one question on observers’ minds was whether he could achieve much in a term of just one year.

After the ceremony, a confident Busyro promised that the Corruption Eradication Commission (KPK) would pursue all pending cases thoroughly.

“I envision the KPK, along with the press and other institutions, starting a tradition of transparency,” he said.

“Transparency means honesty. We must respect each institution’s authority, including the KPK’s.”

Also on his agenda, as he agreed in response to a question from a reporter, are the tax scandal involving Gayus Tambunan and the lingering Bank Century bailout mess.

“As long as the evidence is sufficient, we will [investigate]. God willing, I’d like to tell the public that I do not have any political agenda,” he said.

Busyro will have his hands full regaining the people’s trust in a once-respected agency that had seen its last chairman convicted of murder and a number of high-profile cases languish due to an internal leadership crisis.

And unless the rules are changed, he has only a year to get it done before he would have to undergo a new election to his post.

“Busyro has no time for anything else, he must begin work on his first visit to the agency as chairman,” legal expert Todung Mulya Lubis said on Monday.

As a member of the selection committee for the antigraft agency, Todung said he was confident that Busyro had what it took to lead, but he regretted the decision by the House of Representatives to limit Busyro’s tenure to just the remaining term of the sitting commissioners, which will expire next year.

“It’s now up to Busyro. If he can prove that he is a competent leader in just a year, there will be a good chance for him to be re-elected and to lead the agency for a full term of four years,” Todung said.

“He must go directly after the big fish, the high-profile cases that the KPK has avoided so far. I know Busyro has the commitment to combating corruption without fear, so I think he will get the job done.”

Busyro, the former head of the Judicial Commission, could win popularity by meeting public demands for the KPK to take over the tax mafia scandal involving Gayus or the Bank Century bailout saga from police and prosecutors, Todung added.

But taking over either of those complex cases would be hard as legal proceedings have long been under way, with several suspects already convicted and sentenced.

“Besides, handling just the many abandoned cases already facing the KPK might consume more than a year,” Todung said.

Busyro won by a landslide in the head-to-head House selection against human rights activist and renowned lawyer Bambang Widjajanto.

Lawmakers then selected from among the commissioners for the new chairman ­— and again he won a majority of votes over four deputies of the KPK.

“The prospect that Busyro can lead next year’s selection doesn’t make things better,” said Danang Widoyoko, chairman of non-governmental group Indonesia Corruption Watch.

“He will have to prepare application documents again in May or June next year, attend interviews with lawmakers, undergo a health examination and so on. That could significantly reduce his available work hours.”

Also on Monday, ICW filed a motion with the Constitutional Court challenging the House limitation on his term and demanding that Busyro be allowed to serve for four years, through 2014.

“One year is just too short for the massive work facing a KPK leader,” Danang said.

“Let’s say that Busyro would take KPK into the Gayus saga. As police and prosecutors are prosecuting Gayus for bribery and mishandling corporate taxpayers, the KPK could launch a probe into another aspect of the case, namely the source of Gayus’s suspicious bank accounts. This will surely take longer than a year,” Danang added.

Dem Party chairman says don’t fear WikiLeaks

The Jakarta Post, Sun, 12/19/2010

Democratic Party chair Anas Urbaningrum said the government should not consider WikiLeaks’ wires regarding Indonesia a threat.

"If there is unflattering information from WikiLeaks, all the government has to do is clarify the content. The information may not be the ultimate truth anyways. They are the opinions of United States diplomats," Anas said Sunday, as quoted by kompas.com.

The whistle-blowing website has been leaking documents that reveal information about many countries, including Indonesia. One wire stated U.S diplomats believed the 2004 murder of human rights activist Munir Said Thalib involved the National Intelligence Agency (BIN).

Another stated that the Indonesian government planned to use the visit of U.S President Barack Obama in November as a bargaining tool to persuade the U.S. to lift the ban on training a special army unit that had been accused of human rights violations.

Anas said there was a moral message behind the leaks.

"There are no policies that can be hidden.

Transparency is always required, unless it is something that is confidential in nature. Every country has confidential information that protects their national interests," he said.

Govt to give tax relief to environmentally friendly companies

Antara News, Saturday, December 18, 2010

Yogyakarta (ANTARA News) - The Environment Ministry and the Directorate General of Taxation are planning to provide tax relief to companies using environmentally friendly technology.

"We plan to provide tax relief to companies belonging to the `green` category," Environment Minister Gusti Muhammad Hatta said here on Saturday.

Besides tax relief, the companies would also have easy access to credits from Bank Indonesia (the central bank/BI) after they had passed an environmental standard test, he said.

"Meanwhile, companies put under the `black" category for the second consecutive time will be brought to justice and companies put under the "red" category will be denied access to credits," he said.

The sanctions were expected to have a deterrent effect on companies which contribute to environmental destruction, he said.

"We are also making approaches to the Supreme Court to impose severe punishment on companies proven guilty of destroying the environment," he said.

Most companies proven guilty of heavily polluting the environment had so far received light punishment thanks to alleged legal mafia involved in the court proceedings, he said.

"President Susilo Bambang Yudhoyono himself has instructed the anti-legal mafia task force to investigate the allegation," he said.

Under Law No.32 of 2009 on Environmental Protection and Management, civil investigators of the Environment Ministry had the authority to bring `delinquent` companies to justice, he said.

Rothschild Says Indonesia's Bumi Can Shake Up Coal World

Jakarta Globe, December 17, 2010

The company formed by the union of Bumi Resources and Berau Coal Energy is looking to acquire coal mines around the world and become a global giant, investor Nathaniel Rothschild said on Friday.

The company formed by the union of Bumi Resources and
Berau Coal Energy is looking to acquire coal mines around
the world and become a global giant, investor Nathaniel
Rothschild, left, said on Friday.

Rothschild said the combined entity aims to raise cash from the likes of Chinese sovereign wealth fund China Investment Corp. — which bought 1.9 billion dollars of Bumi Resources’ debt last year.

“This could become a global coal company, as opposed to an Indonesia-focused coal company,” Rothschild told Dow Jones Newswires in an interview during a visit to Beijing.

He added: “... it’s certainly institutions like CIC that we would look to involve in the future plans, because they are inextricably linked to Bumi through this debt instrument.”

Rothschild designed the Bumi-Berau deal through his investment firm Vallar PLC. Vallar listed on the London Stock Exchange in July after raising about 1.1 billion dollars from investors.

It completed a “reverse takeover” deal worth three billion dollars on Nov. 16, giving it 25 percent of Bumi Resources, Indonesia’s biggest coal miner by output, and 75 percent of Berau, the fifth biggest.

Indonesia’s powerful Bakrie family, which controls Bumi Resources, will own 43 percent of Vallar, and Indra Bakrie will become its chairman. The family also includes billionaire Golkar Party chief Aburizal Bakrie.

Analysts have said the move looks like a good way to take advantage of Indonesia’s position as a key raw materials supplier to the booming Asian economies of India and China.

But they have also raised red flags over allegations of corruption and poor governance in Bakrie-related companies.

Rothschild said the Indonesian market was “very, very undervalued” compared to other major emerging countries like Brazil, Russia, India and China.

“And whether the naysayers like it or not, it’s a democracy,” he added.

Bumi Resources and Berau this year will produce about 78 million metric tons of thermal coal used in power plants in China and India.

“What I like about this industry is that you’re effectively selling dirt,” Rothschild told Dow Jones.

Shares in Vallar jumped more than nine percent on the London Stock Exchange on Friday, as they resumed trading for the first time since the company announced the deal.

Agence France-Presse

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Briton, Saudi Get 15 Years For Bank Century Saga

Jakarta Globe, Heru Andriyanto | December 16, 2010

Jakarta. Two co-owners of Bank Century were convicted on Thursday for corruption, money laundering and looting their own bank. They were sentenced to 15 years in jail in an in-absentia trial by the Central Jakarta District Court.

Hesham al Warraq, 52, a Saudi citizen, and Rafat Ali Rizvi, 50, born in Pakistan but currently a British citizen, were found guilty of looting their own bank and benefiting from the government's bailout.

Both men, who were declared fugitives by the police last year, used Bank Century assets to buy and exchange non-rating bonds without market value for personal gains, and because the bank received state funding, their acts inflicted financial losses to the state.

In fact, the bank never received cash payments in the transactions, but was paid in shares instead, the court heard.

"The two defendants are proven to have enriched themselves," said presiding judge Masrudin Nainggolan. "The state loss according to the Supreme Audit Agency amounts to $ 286.5 million, equivalent to Rp3.1 trillion."

"They were involved in a blatant conspiracy to perform fraudulent bank practices of junk bonds trade in violation to the banking law, and then fled the legal proceedings," said the judge.

"The defendants must return Rp3.1 trillion to the state within a month, or prosecutors will seize their personal assets," said the judge. Any failure to repay will risk an additional term of five years, he said.

The court also ordered the seizure of personal assets in foreign countries belonging to the third owner of Bank Century, Robert Tantular, who was convicted earlier of bank fraud, in order to recover the stolen state assets.

Yudhoyono calls for prioritizing domestic market

Antara News, Tuesday, December 14, 2010

Surabaya, East Java (ANTARA News) - President Susilo Bambang Yudhoyono has called on all economic stakeholders to prioritize the domestic market including inter-island and inter-province trade.

"We must admit that equal distribution has not yet been optimally achieved and therefore businesses must not always be export-oriented because the 230 million population is also a market," he said at a general lecture at the Surabaya Institute of Technology (ITS) here on Tuesday.

Before ITS students, lecturers, employees and a number of regional officials, Yudhyono said regional sectors and domestic funding sources had to be put into consideration.

"In the future debts will be continuously reduced while the debt ratio to the Gross Domestic Product must be maintained to avoid a deficit. Defense indusry must also become self-sufficient," he said.

The president said the government would not resort to market mechanism fully but would maintain the market mechanism.

"So we will not submit to market mechanism like in a capitalist economy but the government will still play a role to maintain the market so that no confusion will happen between market economy and the government`s role," he said.

President Yudhoyono who was once an ITS student in 1969 before moving to the AKABRI (armed forces academy) said Indonesia would choose an economic system which is an eco-social market economy.

"We wish to have a strong economy with growth reaching 6 to 7 percent, balanced among islands, enjoyable by both the rich and the poor and which is environment friendly," he said.

With the choice, he said, it is believed Indonesia will become an advanced country in the 21st century and although the century is to end in 90 years` time progress should happen before the period ends.

"Our target is in 15 years` time there will be progress not only in the eocnomic field but also in competitiveness and inovation, legal and social justice system, defense and international diplomacy," he said.

President Yudhoyono said the ideal was not impossible to achieve but would be fought jointly involving all national elements.

Emphasizing that the goal was not impossible to meet Yudhoyono referred as examples to the conflict in Aceh that could finally end peacefully after 30 years or the global crisis that could be finally overcome and the latest one the country`s football team that has proven to have the potentials to advance (the team has to people`s surprise been able to advance to semi-finals at the current ASEAN Football Federation championship).

At the event attended by a number of cabinet ministers President Yudhoyono also referred to positive reports about the country from a number of foreign institutions including the Foreign Policy Magazine, the Economics magazine, the World Economic Forum report, the annual reports on global competitiveness for 139 countries, the OECD and others.

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