House officially endorses national ombudsman commission

Dicky Christanto, The Jakarta Post, Jakarta | Tue, 01/25/2011

House deputy speaker Priyo Budi Santoso welcomes several would-be members of the office of the ombudsman, at the House of Representatives building on Tuesday. The new officers are scheduled to be installed on Tuesday afternoon.(JP/R. Berto Wedhatama)

The new ombudsman commissioners were endorsed Tuesday at the House of Representatives plenary.

They are Danang Girindrawardana, who has been appointed as commission chief, Azlaini Agus, deputy chief, Budi Santoso, Hendra Nurtjahjo, Ibnu Tri Cahyo, Kartini Istikomah, Muhammad Khoirul Anwar, Petrus Beda Peduli and Pranowo Dahlan.

These newly appointed commissioners passed the House's Home Affairs Commission’s three-day-long screening session last week. They were up against dozens of contenders.

The National Ombudsman Commission is tasked to accommodate complaints regarding unsatisfactory public service. After addressing complaints, the National Ombudsman Commission has the authority to reprimand the reported state institutions.

The National Ombudsman Commission was first led by former junior attorney general for special crimes Antonius Sujata.

AGO applies “deponeering” to KPK deputies

Mariel Grazella, The Jakarta Post, Jakarta | Mon, 01/24/2011

The Attorney General’s Office (AGO) has officially set aside the legal proceedings against two Corruption Eradication Commission (KPK) deputies, Bibit Samad Rianto and Chandra M. Hamzah.

“I would like to announce that the two dossiers [against Bibit and Chandra] have been set aside,” Attorney General Basrief Arief said late on Monday.

Basrief had signed the necessary documents needed to set aside the case against Bibit and Chandra, the two KPK deputies who had been accused by corruption convict Anggodo Widjojo of abuse of power and extortion.

“We have discussed and studied the dossier, and came up [with the decision] that it would be right if [the case] was set aside for public good,” Basrief said.

Setting aside a case for the better public good, a legal tool known as deponeering, will spare the deputies from standing trial.

Basrief further said that the AGO decided to apply the deponeering move to the deputies’ case to prevent “impeding corruption eradication [efforts], which the public is really counting on”.

It would not be a problem for the AGO if certain people felt “disadvantaged” by the decision, Basrief added.

“This is the discretion of the Attorney General,” he said.

Ministry reshuffles boards of 12 state firms

The Jakarta Post, Jakarta | Mon, 01/24/2011

The State Enterprises Ministry reshuffled the commissioners and supervisory boards of 12 state-owned companies on Monday.

The companies include plantation firms PT Perkebunan Nusantara (PTPN) I, PTPN II PTPN IX, PTPN XIII and PT Rajawali Nusantara, as well as agribusiness firms PT Pertani and PT Sang Hyang Seri.

Others are forestry firms PT Inhutani I, PT Inhutani II and PT Inhutani III, and water supplier companies Perum Jasa Tirta I and Perum Jasa Tirta II.

“We reshuffled the supervisory boards and the boards of commissioners because of expiring job contracts and because we need some refreshing,” the ministry’s deputy for primary industry, Megananda Daryono, said as quoted by Antara news agency after installing new members of both boards in Jakarta.

The new appointments are also expected to help the state enterprises support the government’s goal of achieving national food self-sufficiency, Megananda added.

RI banks lag behind ASEAN rivals

Esther Samboh, The Jakarta Post, Jakarta | Mon, 01/24/2011

Bank Indonesia (BI) is calling on local banks to improve their efficiency so they can benefit from the growth of Asia’s banking industry.

BI Governor Darmin Nasution said Friday that in terms of efficiency, asset quality and capitalization, Indonesian banks still lagged behind their peers in other Association of Southeast Asian Nations (ASEAN) member countries.

Darmin said the average operating cost to operating income ratio (operating ratio) and net interest margin (NIM) of Indonesian banks was 82 percent and 6 percent, respectively.

These figures were much higher than banks in Singapore, Malaysia and the Philippines. According to Darmin, the operating ratio and NIM of banks in neighboring countries were between 33 and 73 percent and 2 to 5 percent, respectively.

“Indonesian banks have the lowest efficiency rate in the ASEAN-5,” he said, referring to the banks of ASEAN’s relatively more developed members, the Philippines, Indonesia, Malaysia, Singapore and Thailand.

“This is ironic considering the fact that Indonesia’s average increase of banking shares has been fantastic. I urge banks to increase their efforts to alleviate the lag in efficiency,” Darmin said to over a hundred bankers at the annual banker’s dinner hosted by BI in Jakarta.

High lending rates due to banking inefficiencies have hampered credit growth in the country. The central bank estimated loan growth would slow to 19 percent this year, from 23 percent in 2010.

“We could not regulate the minimum NIM for banks. Later, we will combine the prime lending rate ruling with other steps in order to lower the NIM,” Darmin said.

A lower NIM means lower lending rates, which will in turn trigger more business expansion and consumption to spur economic growth in Southeast Asia’s biggest economy. Indonesia’s economy is expected to expand by 6.4 percent this year.

“A lower NIM will create a more efficient and conducive environment for enterprises, especially micro, small and medium enterprises [MSME]. Lending rates for the [MSME] sector are still relatively high compared with other sectors. It’s a challenge for us all to lower the rates further so that the economy will benefit,” Darmin said.

MSME loans accounted for 53 percent of overall loan disbursements in 2010, therefore growing 25 percent and surpassing the usual growth for loans.

Bankers have said that loans for the MSME sector have higher risks of bad debt compared with the non-MSME sector, but BI data showed that in 2010, the non-performing loans (NPL) rate for MSMEs was 2.65 percent, lower than that of the non-MSME sector at 3.51 percent.

Other than lowering the NIM to help businesses grow, the central bank will also focus on increasing bank capitalization to boost competitiveness ahead of the “ASEAN Economic Society”, providing more access for “unfinanced” and “unbanked” people as well as strengthening banking management to prevent excessive risk-taking by executives.

BI will also focus on strengthening the regional economy through the Regional Development Bank (BPD), strengthening the competitiveness of the Rural Credit Bank (BPR) and increasing the role of the sharia banking industry, Darmin said.

He said 2011 policies will revolve around increasing banking intermediary functions, banking supervision and banking stability in order to boost growth, and strengthening rural lenders.

Gayus ‘domino effect’ continues at immigration office

The Jakarta Post, Jakarta | Mon, 01/24/2011

Law and Human Rights Minister Patrialis Akbar said at least 27 officers from the Immigration Office had been suspended following revelation of a falsified passport used by graft convict Gayus Tambunan.

“The number has increased from 16 to 27,” Patrialis said as quoted by tempointeraktif.com on Monday.

Patrialis said the suspension of the 27 officers was proof of the government’s renewed commitment to eradicating judicial and tax corruption.

Coordinating People’s Welfare Minister Hatta Rajasa shared similar views to Patrialis.

“I think people should not doubt [the government’s commitment to fighting corruption] because there is now a system in place to work on the presidential instructions,” Hatta said.

Hatta referred to 12 instructions issued by President Susilo Bambang Yudhoyono to speed up the investigation of the Gayus case. The instructions, among other things, assigned Vice President Boediono to oversee the implementation of the instructions.

Ministry Admits Dipping Into Hajj Fund Accounts

Jakarta Globe, Nurfika Osman | January 23, 2011

The Ministry of Religious Affairs said on Sunday that it had used part of the interest earned from hajj funds to pay for its own officials’ trips to Mecca.

This followed Indonesia Corruption Watch’s claim on Friday that the ministry had used hajj funds to pay bonuses to officials, as well as to cover their transportation, accommodation and lodging costs while on the hajj in Saudi Arabia.

Abdul Ghafur Djawahir, secretary of the ministry’s hajj directorate, told the Jakarta Globe that his office needed to dip into the funds due to budget constraints.

“We use that money to cover the costs of officials who help us in Mecca, Medina and the Plain of Arafah, because what we get from the state budget is not enough to cover our needs,” he said.

“Besides, we believe the people who can afford to go on the hajj are those who are financially secure, even though we realize many people had to save for years to go on the pilgrimage.”

He said, however, that the bulk of the funds used to finance officials’ trips to Mecca came from the ministry budget.

If the ministry did not use some of the interest from the funds, he added, “we’d never be able to offer a satisfactory hajj service.”

Every year, thousands of pilgrims pay the ministry a deposit to register for the pilgrimage. The fee was previously set at Rp 20 million ($2,200) but was raised to Rp 25 million last year.

The fees are deposited in the ministry’s accounts at state-owned banks, and can be stored for years before a pilgrim gets a slot. The total fund is now estimated to hold Rp 1.2 trillion.

Hopefuls have to wait several years before they can go on the state-organized pilgrimage due to travel quotas under the Hajj Management Law.

As of August 2010, the ministry said there were about 1.17 million people on the waiting list.

Abdul said the ministry hoped to get more money from the state budget for the hajj next year.

“We’re in the process of drafting an amendment to the law on hajj fund management that will fix some loopholes,” he said.

The amendment is already on the House of Representatives’ priority list, he added.

Last year, the Corruption Eradication Commission (KPK) issued a report identifying 48 flaws in the ministry’s management of the hajj in 2009.

One of the major problems cited in the report was the lack of transparency in the payment of interest made on fees from pilgrimage applicants.

At the time, Abdul told the Globe that the KPK’s findings just pointed to weaknesses in the system that needed to be fixed and which were not related to graft.

Indonesia Replaces Controversial Tax Chief

Jakarta Globe, Dion Bisara | January 21, 2011

Jakarta. The controversial Mochamad Tjiptardjo has been replaced as head of Indonesia’s tax office.

lBapepam chief Ahmad Fuad Rahmani, above, is taking
the place of Mochamad Tjiptardjo. (Antara Photo)

During a ceremony on Friday, Finance Minister Agus Martowardojo replaced Tjiptardjo with Fuad Rahmani, who steps down as head of the Capital Market and Financial Agencies Supervisory Agency (Bapepam LK).

Tjiptardjo, who is due to meet the retirement age in May, has been director general of the notoriously corrupt Directorate General of Taxation for one-and-a-half years.

He has been heavily criticized for his “poor performance” in resolving a number of outstanding tax cases, as well as the scandal involving tax official Gayus Tambunan.

The debacle has fueled rumors of his replacement.

Tjiptardjo, however, dismissed the speculation, saying “it would be better if new officials entered office at the beginning of the year, given the complicated tasks in the tax office.”

Other appointments included Nurhaida as an expert staff member at Bapepam LK, while Bambang Permadi Soemantri Brodjonegoro becomes the interim head of Bapepam LK’s fiscal policy office. The economist from the University of Indonesia takes over from interim head Agus Supriyanto.

Related Articles:

New Top Taxman After Gayus Mess

Calls for Former Indonesian Tax Chiefs to Be Probed Over Gayus Scandal

VP : RI needs solution to its problems

Antara News, Wednesday, January 19, 2011

Jakarta (ANTARA News) - Indonesia is in need of solution to its problems at present and in the future, Vice President Boediono said here on Wednesday.

"Indonesia needs solution, not contradiction nor controversy," the vice president said when attending the establishment of President University and President Executive Club here.

The vice president asserted that the country had immense social energy, directed to solve various problems at present and in the future.

He added that the country should not be afraid to face various challenges ahead because it had immense social energy.

"It is very deplorable if the immense social energy is wasted uselessly for a momentary interest of certain group of community," Boediono said.

He said the social energy should be used to solve the present and future problems for the state and the nation`s common interest.

"All public components including the bureaucrats, entrepreneurs, and other parties should jointly use the social energy to solve the problems for the national common interest," he said.

According to him, the progress of a nation was determined by its human resources quality.

"Indonesia really has a lot of human resources, but their quality is the most important thing," the vice president said.

In the light of this, he said the government was open to the presence of education institution and dialog forum such as President University and President Executive Club that can create the best possible solution for the progress of Indonesia in the future.

Police Say Gayus & Family Were All Planning to Move to Guyana

Jakarta Globe, Farouk Arnaz | January 19, 2011

Related articles

• Gayus Praises Judges, Lashes Out at Task Force, Cites CIA Role Jan 19, 2011
• Breaking News: 7-Year-Sentence for Gayus Tambunan Jan 19, 2011
• Gayus Can Accept Death Sentence: Lawyer Jan 19, 2011
• Gayus Tambunan Arrives at South Jakarta District Court Jan 19, 2011
• Gayus Verdict Today; Defense Lawyers Hope Big Fish Investigated Jan 19, 2011

Jakarta. Gayus Tambunan, who has just been sentenced to seven years in jail for bribery and corruption, had been planning to leave Indonesia with his entire family, police said on Wednesday.

Gayus Tambunan? National Police allege the dirty tax
official obtained this fraudulent Guyanese passport, as
well as fake Guyanese passports for his wife and
three sons. (JG Photo/Farouk Arnaz)

Brig. Gen. Agung Sabar Santoso, the National Police chief of transnational crimes, said they found that Gayus’s three sons had fake Guyanese passports as well.

“There isn’t only a fake Guyanese passport for Gayus and his wife, Milana Aggraeni, but for all three sons as well,” he told reporters.

In addition, he said they also found fake birth certificates apparently meant for three sons, “but with fake, French-sounding names.”

Authorities have earlier found e-mailed copies of Guyanese passports sent by John Jerome Grice to Arie Nur Irawan, a member of an alleged passport ring who supposedly took the photo used in one of Gayus’s false documents.

In a news conference on Tuesday, National Police spokesman Sr. Comr. Boy Rafli Amar said the e-mailed passport copies had photos of a man “resembling Gayus,” and woman who looked like his wife, Milana Anggraeni.

One passport was under the name of Yosep Morris, born on May 9, 1979, in Georgetown, Guyana’s capital. Another document, with the photo of a woman resembling Milana, was under the name Ann Morris, born on May 6, 1979, also in Georgetown.

Boy said investigators “would contact the Guyanese Embassy in Jakarta to establish the authenticity of the documents.”

Police have asked Interpol to issue a red notice to arrest and deport Grice, said to have lived and worked in Jakarta starting in 2007 as a business consultant. Officials said Grice left Jakarta in July.

He was reportedly introduced to Gayus through J or Joko, a middleman arrested but later released on suspicions that he played a part in helping Gayus obtain fake travel documents.

The former tax official, on trial for graft and bribery, also used a fake passport under the name Sony Laksono, with a photo of him wearing a wig and glasses as a disguise.

Boy said on Monday that police believed Grice was the “intellectual actor” behind the Sony Laksono passport, which authorities said was authentic but that its contents had been tampered with.

A police source had also told the Globe that Grice helped Gayus obtain Guyanese citizenship. But Boy said the claim was still being investigated.

Gayus used the falsified passport to make trips to Macau, Kuala Lumpur and Singapore when he was supposed to have been detained at the Mobile Brigade (Brimob) detention facility in Depok, West Java.

The ensuing controversy prompted President Susilo Bambang Yudhoyono to issue 12 specific instructions on Monday to speed up the ongoing probe into Gayus’s alleged crimes.

He issued the directives hours after announcing that he would take a more hands-on approach in the fight against corruption.

One of the president’s orders was for law enforcers to look into the 149 companies said to have benefited from the former tax official’s illegal services.

“If the investigation suggests that there is enough preliminary evidence indicating violations, they should also be probed,” the president said.

Related Articles:

US Ambassador Denies American Involvement in Gayus Case

CIA agent made my Guyana passport: Gayus

Haposan, Gayus's Ex-Lawyer, Sentenced to 7 Years Jail

Ireland interested in RI`s success in mandling economic crisis

Antara News, Wednesday, January 19, 2011

London (ANTARA News) - The Irish Republic while facing an economic crisis is still keenly interested in Indonesia`s success in overcoming the 1997 economic crisis and financial crisis facing the world in 2008.

This was revealed in a business luncheon held by the Indonesian embassy in London with the cooperation of Bank Indonesia and Chester Beatty Library in Dublin, Ireland, recently, embassy third secretary, Landry Subianto, said in a press release on Tuesday.

In his official visit to Ireland, the ambassador was in the company of Deputy d Deputi Director for Monetary Policy Doddy Zulverdi and head of Bank Indonesia`s payments balance bureau, and the Trade Attache and BI and BKPM representatives in London, besides holding the business luncheon, also had a series of meetings with business people and bankers in Dublin.

Indonesian Ambassador to the United Kingdom and the Irish Republic Yuri O. Thamrin during the business luncheon explained the latest economic developments in Indonesia including and achievements in various fields like good, trade and finance.

In the meantime, Doddy Zulverdi in the business luncheon presented Indonesia`s experience of successfully coming out of the 1997 economic crisis.

Discussions were held lively reflecting the wishes of many circles in Ireland to learn from Indonesia in facing the financial and economic crisis.

In the meantime, in the meetings with financial circles, the ambassador exchanged views and listen to an explanation on Ireland`s experience in developing itself into a world and European financial and industrial center by Mark Fitzgerald, Chief Operating Officer of Citibank Europe Plc and chairman of the Irish Association of Exporters.

In the meeting also attended by Chief Executive of the Irish Funds Industry Association Gary Palmer, the possibility of cooperation between the financial and banking sectors between the two countries was also explored.

The ambassador and entourage also had a discussion with former Irish Financial Minister Alan Dukes, who is now chairman of the Anglo Irish Bank.

17 governors are graft suspects

The Jakarta Post, Jakarta | Mon, 01/17/2011

Seventeen of 33 governors in the country have been named graft suspects, Minister of Home Affairs Gamawan Fauzi revealed Monday.

The last case involved the Bengkulu governor, who was allegedly involved in corruption of land and building taxes worth Rp 23 billion (US$2.4 million).

“I signed the letter [to lay him off] two days ago. Hopefully in two or three days the President will issue a letter to lay him off,” he said in a meeting with regional representatives in Jakarta.

He said that two governors, Ismeth Abdullah of Riau province and Syamsul Arifin of North Sumatra, were still facing legal processes due to corruption charges, kompas.com reported. 

“Today, 155 regional heads became suspects. But I think there will be more. Every week there is a new suspect. Three months in the office and they become suspects…,” he said.

Gamawan, a former West Sumatra governor, said to become a governor, one should spend a lot of money, between Rp 60 and 100 billion. However, the highest monthly salary of a governor, like the Jakarta governor, was only Rp 90 million, he added.   

Moody's upgrades RI rating to one notch below investment grade

The Jakarta Post, Jakarta | Mon, 01/17/2011

Moody's Investor Services on Monday upgraded Indonesia’s sovereign credit rating to one notch below investment grade, a statement released on Monday shows.

According to the statement, the top rating agency upgraded Indonesia's rating from Ba2 to Ba1 with a stable outlook, citing economic resilience, macroeconomic balance, an improving government debt position and the central bank's foreign currency reserve adequacy as well as prospects for foreign direct investment inflows.

"We have upgraded the sovereign credit ratings as momentum in the economy is expected to be sustained by steady domestic demand, a reasonable pace and sequencing of policy and structural reforms, and rising foreign direct investment.

"Furthermore, Indonesia’s debt position and reserve adequacy remain on an improving trajectory relative to most of its ratings peers," says Aninda Mitra, a vice president at Moody's and its lead sovereign analyst for Indonesia.

Moody's, however, still considers key risks to the rating outlook to be mainly embedded in Indonesia’s political system.

"Opposition from coalition partners has slowed the government's drive to implement far-reaching economic reforms," the agency says, adding that this opposition has not impacted overall policy management capabilities or near-term economic prospects.

Nonetheless, Moody's notes that adversarial or obstructionist politics that impede policy making and banking supervision could make investor confidence suffer and financial market pressure could increase.

Earlier, Finance Minister Agus Martowardojo has said he hoped Indonesia would receive achieve investment grade accreditation from top rating agencies this year, following its stellar economic performance in 2010. (est)

Australia welcomes RI’s new foreign policy ‘activism’

Abdul Khalik, The Jakarta Post, Jakarta | Wed, 01/05/2011

Merry meeting: US Secretary of State Hillary Clinton greets Indonesian Foreign Minister Marty Natalegawa (left) amid a crowd of foreign ministers waiting to take a group photo before the ASEAN Regional Forum’s (ARF) opening in Hanoi (Reuters/Hoang Dihn Nam)

Major regional dialogue partners of ASEAN, such as Australia, are watching closely to see how Indonesia exercises its leadership in ASEAN as the country begins to chair the group this month.

Australian Ambassador to Indonesia Greg Moriarty expressed optimism that under Indonesia, ASEAN could enhance the grouping’s role in regional and global arenas, stating that Indonesia’s vision of global architecture matched Australia’s.

“Our aspirations match Indonesia’s own aspirations. We [see]Indonesia’s increasing confidence and leadership role as positive and matches Australia’s interests.

“We see Indonesia’s foreign policy activism as a positive sign,” he told The Jakarta Post recently.

Australia, Moriarty said, acknowledged Indonesia’s recent foreign policy track record as impressive, including the country’s instrumental role in shaping the evolution of the East Asia Summit (EAS), exercising leadership in climate change forums and playing a significant role in the G20 agenda.

“Indonesia has been playing a clever role in keeping ASEAN’s interests very central in the process of building the regional architecture,” he said.

The EAS comprises the 10 ASEAN states and 6 dialogue partners: China, Japan, South Korea, India, Australia and New Zealand.

Leaders of the 16 countries meet annually to discuss regional and global issues in one of the ASEAN countries. Beginning this year, the US and Russia will formally join the forum, which will be held in Indonesia.

President Susilo Bambang Yudhoyono announced his intention to get ASEAN more involved in tackling global problems during Indonesia’s chairmanship of ASEAN.

During the ASEAN Summit in Hanoi last year, he proposed to UN Secretary-General Ban Ki-moon a more comprehensive cooperation between ASEAN and the UN so the 10-member group could be involved in more areas to help the world body solve global problems.

“We want to be more involved in a range of issues the UN handles, such as human rights and development, and achieving MDGs,” Foreign Minister Marty Natalegawa said on the sidelines of the meeting.

Moriarty cited Indonesia’s success in hosting the Bali Democracy Forum as proof of President Yudhoyono’s leadership in the region and beyond.

“An initiative such as the Bali Democracy Forum is a very important event. It shows Indonesia can lead a global dialogue in democracy.”

Diplomats from major dialogue partners in ASEAN in Jakarta said they were also convinced Jakarta would lead ASEAN in crucial roles to tackle global problems.

“It’s about how confidently Jakarta plays its role. Others will follow what Jakarta proposes as we respect Indonesia all along,” a diplomat speaking on condition of anonymity said recently.

Pakistani Ambassador to Indonesia Sanaullah also supported the view that Indonesia could lead ASEAN to achieve its goals and play an important role in helping solve global problems.

SBY says govt tells the facts

Antara News, Friday, January 14, 2011

Surabaya, East Java (ANTARA News) - President Susilo Bambang Yudhoyono said that the explanation that the government gave to the people was made based upon facts and accountable.

"The government while carrying out its tasks as best as possible also wishes to explain everything as it is with facts and it is all accountable," he said when opening the 14th Congress of GP Ansor, the youth wing of the Islamic organization Nahdlatul Ulama (NU) here on Thursday.

A newspaper in its editorial this week raised criticism that the government had lied to the public. It quoted the criticism that was made by different religious leaders in a meeting here recently.

President Yudhoyono said the government had always worked as hard as possible to improve the welfare of the people.

"When I say the government I mean the central and local governments including the ministers, governors, mayors, district heads, sub-district heads and even village heads," he said.

He said despite the complexity of the problems and challenges that the government is facing all have been striving hard to improve the livelihood of the people.

"Certainly some have been achieved but we, including myself, have also to be honest that some have not," he said.

President Yudhoyono said every year he had always explained about what had been and had not been achieved by the government.

"I always tried to tell whatever it is and by doing that I hope we can continue carrying out the tasks with the spirit of togetherness and with the full support of the people to make the development program a success," he said.

On the occasion the President appealed to all parties to respect each other.

"I am not a cleric. I cannot as yet be able to become a cleric. I am just a common religious follower, the servant of Allah but I wish I can always control what I say and my feeling so that this country will remain strong. We share the bad and the good. That is what is the statehood should be," he said.

Coordinating minister for economic affairs Hatta Rajasa meanwhile had also said that all the facts presented by the government were based on official data issued by credible institutions such as the Central Bureau of Statistics.

Coordinating minister for political, security and legal affairs Djoko Suyanto had also refuted that the government had lied. He however referred not to the religious leaders` statement but rather to the media`s editorial.

RI economy to grow 6.2% in 2011: World Bank

The Jakarta Post, Jakarta | Thu, 01/13/2011

The World Bank expects Indonesia’s economy to expand 6.2 percent in 2011, less than the official government estimate of 6.4 percent.

World Bank (WB) senior economist for Indonesia Enrique Blanco Armas said Thursday the economic growth target was not considered pessimistic, despite a recent statement by Vice President Boediono that the Indonesian economy could expand by up to 8 percent this year.

“I wouldn’t consider this pessimistic if you see conditions in Europe,” Enrique said at the World Bank office in Jakarta on Thursday.

Last month, the World Bank cut its economic growth estimate for Indonesia to 5.9 percent from 6 percent for full-year 2010, because of domestic-related supply constraint issues caused by weather anomalies that hampered harvests.

Local economists have also said weather anomalies have not only hampered economic growth but caused inflationary pressures mainly from volatile food prices.

The World Bank released its latest global report on Thursday, in which soaring food prices were considered the main focus for domestic consumption-reliant economies such as Indonesia, Southeast Asia’s largest economy with more than 230 million people accounting for 60 percent of its economy.

“Inflation is high or on the rise in many developing countries, notably China, Indonesia and Sri Lanka ... Inflation mainly reflects drought-related increases in food prices,” the report says.

The World Bank sees 2011 headline inflation at 6 percent for Indonesia, in line with the central bank’s 4 to 6 percent target.

“What’s more important is to monitor development in the next few months, most importantly on core inflation. Headline [inflation] increased mostly as a result of high food prices, so it’s weather related. The government should address the supply side,” Armas said. (est)

On GDP, Indonesia to Surpass Holland in 2012

Indonesia's GDP will grow more in the future in line with the economic growth.

Vivanews, 11 JANUARI 2011, 17:06 WIB Heri Susanto, Syahid Latif

VIVAnews - Chief of National Committee for the Economy, Chairul Tanjung, said the volume of Indonesian economy by 2012 will surpass the Netherlands, its former colonizer.

(VIVAnews/Tri Saputro)

"In 2012, Indonesia would have taken revenge over the Netherlands which in the past had colonized the nation for 350 odd years," he said today, Jan 11.

The nation's Growth Domestic Product in 2009 based on data from the World Bank shows that Indonesia is ranked 18 at US$540 billion of GDP. The Netherlands sits on 16th position at US$792 billion of GDP.

However, in 2010, the National Statistics Agency recorded that the Indonesia's GDP has reached US$700 billion. The country last year was also ranked 16 as a nation with top economic volume.

RELATED NEWS

• Indonesia's GDP Rises in Percentage
• Will Indonesia Experience Capital Outflow?
• State Income May Hit US$111.7 Bn
• Investors Consider Indonesia as Promising
• Indonesian Economy to Remain Stagnant in 2011

Chairul believes that Indonesia's GDP will grow more in the future in line with the economic growth. This assumption is based on the figure made by the Indonesia Monetary Fund about the increase in future Indonesia's GDP which can earn an average of 12.8 percent.

Earlier, Standard Chartered Bank estimated that Indonesia will be listed economic giants together with China, the US, India and Brazil by 2030.

SBY calls for tax office reform

Nani Afrida, The Jakarta Post, Jakarta | Mon, 01/10/2011

President Susilo Bambang Yudhoyono called for tax office reform as part of efforts to tackle corruption and collusion.

“[We have to] prevent and eradicate corruption and collusion in tax offices. I am afraid there are big octopuses in those offices and we must cut them before they spread to other places,” Yudhoyono said during a meeting with ministers, governors and mayors at the Jakarta Convention Center’s main hall on Monday.

Yudhoyono urged all government officials to stay away from corrupt practices.

“I urge [government officials] not to jack up prices in procurement projects, not to use state money for political interests or illegally tax investors,” he said.

“I was sad when I had to sign [letters to approve] an investigation implicating government officials,” he said. “Sometime they were even not aware that what they had done was corrupt. So, we must reprimand them.

Stock index suffers steepest drop since Oct. 2008

The Jakarta Post, Jakarta | Mon, 01/10/2011

The country's benchmark stock index, the Jakarta Composite Index (JCI), went into freefall at midday, suffering the steepest drop in more than two years since October 2008.

JCI plummeted 4.19 percent, or 146 points, at the bourse's noon break, sliding back to the 3,400 level at 3,485 amid widespread inflation worries.

Indonesia's inflation neared 7 percent in 2010, with food prices increasing by almost 18 percent mainly due to climate anomalies that hampered the harvest season in the country, where domestic consumption accounts for more than 60 percent of the economy.

Despite the high inflation, the central bank has kept its benchmark interest rate at a record low 6.5 percent for 18 consecutive months.

Analysts have expressed concern that if the rate is not increased, inflation could hamper economic growth, which the government expects to reach 6.4 percent this year.

Blue-chip stocks suffered the most in Monday's trading, with Astra Internasional, the biggest firm by market capitalization on the nation's stock exchange, slipping nearly 6 percent to Rp 46,250 a share. (est)

Related Article:

Bangladeshis clash with police over stock market fall

10 achievements in 2010: President

Nani Afrida, The Jakarta Post, Jakarta | Mon, 01/10/2011

President Susilo Bambang Yudhoyono (SBY) claimed Monday that Indonesia had attained 10 targets in 2010.

"We had 10 achievements in 2010," SBY told participants of national working meeting on the Indonesian Development Program 2011 at the Jakarta Convention Center in Jakarta.

First, Indonesia’s economy grew strongly in 2010.

"This was reflected in the rise of Jakarta Composite Index. We also improved our competitiveness in the world and our investment grew significantly," he said.

Second, SBY said there were several indicators of improved public prosperity.

"Third, we also maintained political stability. Checks and balances between the government and legislators were smooth," SBY said.

Fourth, law enforcement was upheld and corruption was curbed.

"Fifth, domestic security was well maintained. Sixth and seventh, we solved bureaucratic bottlenecks and reduced poverty and unemployment," he said.

Eighth, the country’s foreign exchange reserve booked a new record of US$96 million, SBY added.

Ninth, there was accelerated progress in micro business as well as micro credit distribution.

Last but not least, the President said Indonesia played an important role in the world.

"Indonesia was also involved in maintaining world peace and in solving the global economic crisis," he said.

Related Article:

Yudhoyono Lists Past Achievements and Future Challenges

Iceland summons US envoy over WikiLeaks probe

Google/AP,

LONDON (AP) — The American ambassador to Reykjavik has been summoned to explain why U.S. investigators are trying to access the private details of an Icelandic lawmaker's online activity as they try to build a criminal case against WikiLeaks.

Revelations that the U.S. Justice Department obtained a court order to examine data held by Twitter Inc. on Birgitta Jonsdottir, an Icelandic parliamentarian who sits on the country's Foreign Affairs Committee, immediately caused consternation in the tiny North Atlantic nation.

"(It is) very serious that a foreign state, the United States, demands such personal information of an Icelandic person, an elected official," Interior Minister Ogmundur Jonasson told Icelandic broadcaster RUV.

"This is even more serious when put (in) perspective and concerns freedom of speech and people's freedom in general," he added.

Jonsdottir is a one-time WikiLeaks collaborator also known for her work on Iceland's media initiative, which aims to turn the island nation into a free speech haven. Jonsdottir told The Associated Press she was too overwhelmed to comment Sunday, but in a recent post to Twitter, she said she was talking with American lawyers about how to beat the order — and was drumming up support in Iceland as well.

U.S. Ambassador Luis E. Arreaga has been summoned for a meeting at Iceland's Foreign Ministry to discuss the issue, Foreign Ministry spokeswoman Urdur Gunnarsdottir said Sunday. It was not clear when the meeting was taking place.

U.S. Embassy in Reykjavik said no one there would be available for comment until Monday.

The evolving diplomatic spat illustrates the challenge American prosecutors face as they weigh whether to bring charges against WikiLeaks, an international, tech-savvy operation that has angered and embarrassed Washington with a series of huge leaks of classified information.

The most recent disclosure of thousands of secret State Department cables saw U.S. diplomats being ordered to gather the DNA and fingerprints of their international counterparts, captured backroom dealing over issues such as Guantanamo and rendition, and publicized unflattering assessments of friends and foes alike.

WikiLeaks: US diplomats 'have been spying on UN leadership'

Ban Ki-Moon greets US Secretary of State Hillary Clinton

just before a meeting of the Middle East Quartet Photo: AFP

The U.S. says the disclosures have damaged international diplomacy and put the safety of informants and foreign human rights activists at risk. WikiLeaks has dismissed the claims, but Washington has been trying to find a way to prosecute the group and its leader, 39-year-old Julian Assange, who is currently in England.

A court order unsealed earlier this week revealed that American authorities had gone to court to seek data from Twitter about Assange, Jonsdottir, and others either known or suspected to have interacted with WikiLeaks.

Some of those named in the court order have said they suspect other companies — such as Facebook Inc., Google Inc., and the eBay Inc.-owned Internet communications company Skype — have also been secretly asked to hand over their personal data.

Assange and Jonsdottir have vowed to fight the court order.

Der Spiegel: Enthűllt wie Amerika die Welt Sieht

Related Articles:

WikiLeaks demands Google and Facebook unseal US subpoenas

Icelandic MP fights US demand for her Twitter account details

Stop Tweeting - or we will take you to court! Watchdog's crackdown on celebrities who plug products on Twitter

Press Freedom Index 2010

Reporters Without Borders condemns attacks on WikiLeaks