BI orders 23 banks to suspend adding new prime clients

The Jakarta Post, Esther Samboh, Jakarta | Fri, 04/29/2011

Bank Indonesia (BI) has officially ordered 23 banks to suspend the acceptance of new clients to premium service programs for one month, starting Monday.

The move follows revelations of alleged embezzlement by a former premium services provider at Citibank, senior relationship manager Melinda Dee, who allegedly siphoned billions of rupiah from clients’ accounts.

According to BI deputy governor of banking supervision Halim Alamsyah, the step was being taken to improve the quality of premium banking services and protection of clients, especially those listed in priority baking and wealth management programs.

“Bank Indonesia has ordered 23 banks with such services to temporarily suspend the acceptance of new clients for one month, starting Monday,” he said.

He added that services to already registered clients mat continue to take place as usual.

In the mean time, banks have been requested to “improve policies, standard operating procedures and internal supervision in efforts to improve the quality of services and client protection,” Halim said.

“In time, [the central bank] will conduct an evaluation of the quality of services,” he added.

Related Articles:

BI Freeze on Banks’ Premium Business

EU investigates banks over credit default swaps use

Sri Mulyani Indrawati Interview: From political protest to top of the World Bank

Daily Mail, by ALEX BRUMMER, CITY EDITOR, 27th April 2011

When Sri Mulyani Indrawati was drafted into one of the top jobs at the World Bank in June 2010, she could never have guessed how useful her experience as a reformer in the post-Suharto era of klepto-capitalism in Indonesia would prove to be.

In her current job as the Washington based Bank’s managing director, she finds herself responsible – among other things – for the Middle East and North Africa region, which has seen unprecedented upheaval, violence and change since revolution erupted in Tunisia late last year.

Since then no less than 15 of the 17 countries across the region – many of them clients of the Bank – have been in turmoil. In two countries, Libya and Yemen, there is all out civil war.

Unlikely revolutionary: Mulyani's experience as a
reformer in Indonesia has proven invaluable

When the disturbances began, Mulyani, a native of the world’s fourth most populous nation, immediately identified them with events in her own country where the population rose up against the rule of President Suharto in 1998 in the wake of the devastating Asian financial crisis.

‘The changes have a similarity with Indonesia. You have an economy supported by a relatively crude economic performance, or in this case (the Middle East), the oil sector,’ Mulyani argues.

More...

• Stock market predictions: What next? {thisismoney.co.uk}
• We're NOT in recession but GDP is up by just 0.5% (and the construction industry is in tatters)

'People feel they are not participating in the decision-making process. Decisions are exclusive to those at the very top. You have grown up with crony capitalism and it creates ever more resentment.’

Our conversation takes place at the conference table in her office on the spacious president’s floor of the World Bank headquarters, just a short distance from the White House.

Mulyani, who is a near permanent presence on the Forbes list of the world’s most powerful women, speaks in fluent – but sometimes difficult to understand – English, and is accompanied by a coterie of advisers.

The World Bank managing director’s own experience in part resembles that of the well-educated revolutionaries in Egypt’s Tahrir Square and across the region. As the protests against the Suharto regime grew amid soaring inflation, which climbed to 80 per cent, and a collapsed economy, Mulyani, an academic at the University of Indonesia, found herself acting as ‘a resources person for the media’.

She became a big voice in the protest movement and as change came about was swept into government as an adviser sitting on the council of economic affairs. After a short sabbatical she was called back to power as finance minister.

The World Bank, with its 10,000 employees and thousands of consultants, looks a doddle in comparison. ‘At the Ministry of Finance we had 64,000 people,’ she recalls.

A slight woman, dressed demurely in a grey silk suit, Mulyani looks an unlikely revolutionary. She says that ‘toppling the small elites in charge and identifying the issues is much easier than correcting it’.

She adds: ‘You have to build new institutions that create an open, fair transparent institution and regulatory framework.

‘Indonesia’s response was dictated by the financial shock of crisis. So there was a phenomenal policy change required at the time.

‘We now have an anti-corruption law, we have a competition law and an anti-monopoly law and a bankruptcy law.

‘It took a year and a half from ending the president’s (Suharto) rule.’ In her view it was possible to speedily drive reform in Indonesia because it was ‘a collapsed economy’.

It may be harder in Tunisia, Egypt and across North Africa and the Middle East because the damage, so far, has not been so cataclysmic.

‘The momentum for change cannot be that radical in a way that it was in Indonesia. Tunisia and Egypt need to design the transition which strike the right balance between the continuity of economic growth and the need to protect poor people.’

As someone coming from the country with the world’s largest Muslim population, does Mulyani believe that Islamism and modern reformed economies are incompatible?

‘I don’t believe it has anything to do with religious belief,’ she snaps back. ‘People now, especially with the internet, are connected. They have an expectation of behaviour, of accountability, avoiding conflict and fair and just competition.

‘In Indonesia we don’t see this as against our values or religious beliefs. In fact I think Islam is actually seeking a just society in a way.’

Part of the clean-up process in Mulyani’s view is returning looted assets to the people through a ‘proper process’. But she warns it takes a long time and people ‘can be easily disappointed’.

Now that she is on the other side of the fence, Mulyani recognises that the World Bank and other development groups have much to learn from the way in which unscrupulous leaders loot the national wealth through crony capitalism and nepotism.

‘We are watching and learning from the experience. Corruption is really an enemy of the people, it is the enemy of the poor and that is why governance has become one of the Bank’s essential principles.

‘Engaging with a country that will not provide support for governance will definitely be a limitation on the Bank’s ability to operate there,’ she insists.

Mulyani is keen to bring a new dynamic to the Middle East economies which avoids a model of ‘high growth which fails to create jobs’. In her view it needs a blueprint that is inclusive and recognises the harm done by discrimination on ‘gender, on minority and location’.

She bemoans the fact that much of the education in nations like Tunisia ‘is not connecting with the jobs market’. Many of the manufacturing jobs are being replaced by automation so it is the services sector which will need to pick up the slack.

As for food prices, one of the other underlying causes of upheaval across the region, Mulyani thinks that governments need to be ‘aggressive in designing a social safety net’.

‘The problem of the food price is structural. The growth of demand cannot be checked in that it is coming from middle income countries demanding more quality and more quantity of food. High demand is here to stay,’ she says.

Mulyani has made an extraordinary journey from academia, to protest leader, to the highest level of government in one of the world’s most complicated countries, and now a portfolio at the World Bank which stretches from Latin America to East Asia and North Africa.

Mulyani says: ‘Many emerging countries are facing the same issue of overheating and inflation because they have been vigorously expanding fiscal and monetary policy to counter the 2008 shock.’

But she is hopeful that they have learned from the past and the economic framework is now much more sound.

Having risen to such dizzy heights does she have further ambition? Could she, for instance, be the first emerging market president of the World Bank.

Mulyani won’t be drawn. She simply notes that the ‘process has to be credible’ which means ‘open and not following any nationality’.

Despite the disadvantages of being a women from Asia – at an institution which since its foundation at Bretton Woods in 1944 has been headed by alpha male Americans – it would be hard to argue against her credentials.

Chinese Prime Minister to Visit Indonesia With Deals in Mind

Jakarta Globe, Faisal Maliki Baskoro & Reuters | April 22, 2011       

Related articles

• China Eyes Palm Oil, Power Plant Deals With Indonesia
• Indonesia Must Clearly Outline China FTA Problems: Official
• Govt Pledges to Protect Local Industries From Dumping of Cheap Chinese Goods

Chinese Premier Wen Jiabao will go on
 a brief tour of Southeast Asia and sign a
number of agreements next week.
(EPA Photo/Adrian Bradshaw)     

Beijing. Chinese Prime Minister Wen Jiabao will sign a series of agreements next week covering everything from banking and energy to palm oil and infrastructure during visits to Malaysia and Indonesia, a senior diplomat said on Thursday.

Assistant Foreign Minister Hu Zhengyue said deals in Malaysia would include telecommunications and infrastructure construction cooperation, while in Indonesia there would be a greater number of documents signed, including on banking.

“The bank cooperation will probably involve many banks, not just one or two,” Hu said. “There will also be some financing [deals] for major projects.”

Other agreements to be signed in Indonesia will cover palm oil plantations and coal-fired power plants. He gave no firm details on any of the deals.

China already has close trade, economic and cultural ties with both countries. In 2009, China signed currency swaps with Malaysia and Indonesia, as part of moves to give the yuan a bigger international role.

According to Indonesia’s Investment Coordinating Board (BKPM), Chinese investment in the country during the first quarter of this year reached $28.4 million, 10th most among foreign investors. Chinese investment in Indonesia last year was $173 million, which put it in 11th place.

Zhang Qiyue, the Chinese ambassador to Indonesia, said earlier this month that there were more than 1,000 Chinese companies ready to register in Indonesia at the end of last year, with contracts estimated at $9.7 billion.

Wen will be in Malaysia from April 27 to 28 before flying to Indonesia. He plans to return to China on April 30.

Sofyan Wanandi, chairman of the Indonesian Employers Association (Apindo), welcomed China’s investment but noted growing sentiment against cheap Chinese goods flooding Indonesian markets.

“I see this as a positive investment in infrastructure and manufacturing,” he said.

“However, I have seen enough agreement signings to know that dozens of these signings end up with no realization.”

Agreements tend to take a long time to take hold, he said, even failing to materialize because the Indonesian government is often unprepared with permits for the projects and land availability.

“Action speaks louder than words. Upon signing an agreement, both parties must be able to realize their intentions,” he said

“The government should also lure Chinese investment to build manufacturing bases here. China is a major importer of our raw materials, and building a manufacturing base here would give it added value and cool down tensions stemming from the flood of Chinese products.”

Erwin Aksa, chairman of the Indonesian Young Entrepreneurs Association (Hipmi), said China needed to increase its investment here, especially in areas such as infrastructure and manufacturing, to balance Indonesia’s trade deficit and improve domestic competitiveness.

“China’s specialty is in infrastructure projects, but we also need increased investment in manufacturing,” he said.

Indonesia is often seen as just an exporter of raw materials, Erwin said, so China should invest more in developing domestic industry to give it added value.

“Ideally, China should be among the top five foreign investors in Indonesia,” he said.

Former REDD+ negotiator for Indonesia sentenced to 3 years for corruption

mongabay.com, April 22, 2011

Wandojo Siswanto, one of the negotiators for Indonesia's delegation at 2009 climate talks in Copenhagen and a key architect of its Reduced Emissions from Deforestation and Degradation (REDD) partnership with Norway, has been sentenced to three years in prison for accepting bribes.

Following an investigation by the Corruption Eradication Commission (KPK), Wandojo was found guilty of receiving a bribe of about $10,000 from Anggoro Widjojo, a director of PT Masaro Radiokom, to win favorable treatment in the Ministry of Forestry's budget for the telecommunications company. Wandojo had been named in at least two other corruption probes, including a 2008 case where he admitted to taking a Rp 50 million ($4,600) kickback from lawmaker Al-Amien Nasution.

Wandojo was removed as a Special Advisor to the Minister of Forestry in September.

Wandojo's arrest and sentencing raise questions about the capacity of Indonesia's forestry ministry to manage potentially billions of dollars of payments under the proposed REDD program, which aims to reduce Indonesia's greenhouse gas emissions by shifting its development model away from one that consumes forests to one that protects forests. Several governments—including Norway, which has already committed up to a billion dollars—are supporting the initiative.

Concerns over the fate of Indonesia's REDD funds have been raised before. Critics cite the country's reforestation fund, which lost $5.25 billion between 1994 and 1998, according to Ernst and Young audit. The fund was managed by the forestry ministry.

Chandra M. Hamzah, deputy chairman at the KPK, told Reuters in September that the forestry sector is "a source of unlimited corruption."

Wandojo has been one of several figures in the investigation. In August the Corruption Court convicted Anggodo Widjojo -- the brother and business partner of PT Masaro Radiokom's Anggoro Widjojo -- for attempting to bribe officials from the Corruption Eradication Commission (KPK) with as much as Rp 5.1 billion ($566,000) in an attempt to get it to drop a corruption case against his brother. Anggodo Widjojo was sentenced to four years in prison, while his brother has been at-large since August 2008.

Kaban, the forestry minister from 2004 to 2009 and a legislator from 1999-2004, is also a person of interest in the case. Kaban has been linked to several other corruption cases, including bribe-taking for issuance of forest concessions, according to the Jakarta Post.

Related Article:

KPK: Corruption Jeopardizes Lucrative Climate-Change Deals

Sports Ministry Official Busted in Alleged Southeast Asian Games Corruption Scandal

Jakarta Globe, Ulma Haryanto, April 22, 2011

Related articles

• Hype Machine for Southeast Asian Games Ready to Go Into Overdrive
• Cirus Sinaga Finally Behind Bars
• Ministry Officials Held Over Student Fair Corruption
• AG Blames Staff for Drawing Presidential Anger
• Law Enforcement Agencies Urged Not To Let Egos Get in the Way of Graft War

Indonesia’s Corruption Eradication Commission has taken a senior government official into custody in connection with strong indications of corruption allegedly involving construction of the athletes village for the Southeast Asian Games in Palembang in November.

KPK spokesman Johan Budi told the Jakarta Globe on Friday that the investigators from the antigraft agency swooped on the State Ministry of Youth and Sports Affairs in Senayan, South Jakarta, on Thursday night.

Johan said two men and a woman had been taken into custody after the bust at the office of ministry secretary Wafid Muharam.

He said the trio, identified as ministry official WM, businessman MI and mediator R, a woman, had been taken away for further questioning. Also recovered were documents and checks totaling Rp 2 billion [$231,750].

WM is believed to be Wafid Muharam.

“We also searched [Wafid’s] and R’s offices, we suspected the checks were given in connection with the construction of an athletes village for the upcoming SEA Games in Palembang,” Johan said.

The budget for the athletes’ village is Rp 200 billion.

The 26th SEA Games will be held on Nov. 11-20. The country is hosting the Games for the first time since 1997.

Related Article:

Minister vows to comply with KPK in secretary bribe case

KPK appraises Bandung anti-graft initiative

The Jakarta Post, Jakarta | Tue, 04/19/2011

The Corruption Eradication Commission (KPK) visited the Bandung administration on Tuesday for an anti-corruption initiative appraisal.

“We are carrying out an appraisal on 29 agencies. Bandung is the only West Java city we will visit because it is the capital of the province,” Epa Kartika, the KPK official in charge of the operation, said.

She added that the assessment was based on innovation and initiative in corruption eradication, following the code of ethics, transparency and public complaints.

The agency and administration with the highest score will be awarded as winner, Epa said.

The KPK will also appraise Medan, Palembang, Bandarlampung, Makassar, Samarinda, Semarang, Surabaya and Manado.

Related Article:

JG Photographer Recognized for Gayus Photo

RI's fast-moving consumer goods industry grows 11.8%

The Jakarta Post, Jakarta | Tue, 04/19/2011

Indonesia has recorded an 11.8 percent growth in its fast-moving consumer goods industry in 2010, a result of an improving economic condition, Nielsen says.

“Consumers are now more willing to spend money; they tend to be buying products they would not have considered earlier,” Nielsen client leadership executive director Venu Madhav said Tuesday in Jakarta.

He added that the shift in consumer behavior had occurred across the upper to lower-middle class.

Venu also said the upper-class tended to spend more on products with added value, “Although these could be double in price”.

He added hair conditioner, milk and toothpaste were among products upper-class consumers spent considerably more on last year.

Ministry Officials Held Over Student Fair Corruption

Jakarta Globe, Nurfika Osman | April 15, 2011

Four Education Ministry officials have been arrested on suspicion of embezzling Rp 2 billion ($230,000) from funds allocated for a student fair, authorities said on Friday.

Those arrested were Joko Santoso, the ministry’s director for vocational schools, and three of his subordinates, Susilowati, Suko Wiyanto and Al Azhar.

Noor Rachmad, a spokesman for the Attorney General’s Office, said the four were arrested on Thursday. “We detained them because they posed a flight risk,” he said.

The case stems from an exhibition and contest held for vocational schools at the Jakarta Fairground in Kemayoran, Central Jakarta, in 2009.

The event was given a budget of Rp 13.84 billion by the Education Ministry, with Joko in charge of Rp 6.34 billion and the remainder tendered out to the private sector.

Joko is alleged to have ordered his staff to siphon off at least Rp 1.498 billion and doctor the financial report to cover up the missing money.

“Based on a report by our investigators, losses to the state could reach as high as Rp 2 billion,” Noor said.

A final figure would be known, he said, once the State Development Finance Comptroller (BPKP) completed its audit.

National Education Minister Muhammad Nuh said he was aware of the case and would leave it up to the AGO to investigate.

“All we can do is provide the suspects with [legal] assistance because they’re still members of our staff,” he said. “We’ve also appointed a new acting director of vocational schools.”

Nuh added the ministry would not fire the four officials until they had been formally charged and brought to trial. He declined to say whether other officials were likely to be named suspects in the case.

Additional reporting from Berita Satu

50 officials suspected of money laundering

Esther Samboh, The Jakarta Post, Jakarta | Wed, 04/13/2011

Over 50 officials who are clients of alleged Citibank embezzler Inong Malinda, aka Melinda Dee, are suspected of being linked with the fraud case that may also indicate money laundering, Financial Transaction Reports and Analysis Centre (PPATK) officials say.

Chairman Yunus Husein said on Wednesday that the PPATK was studying money-laundering indications in 28 transaction reports from two insurance firms and eight banks, including unidentified state-owned, private and foreign-owned lenders.

“We have not figured out if the large amount of private banking funds came from money laundering … If we were to guess, using income statement analyses, or lifestyle and network analyses, we could jump to that conclusion. How come they have little income but the account shows huge amounts of money?” he said at a press briefing at the PPATK office in Jakarta, adding that there were several “former officials” who were clients of Malinda.

The National Police are currently investigating a case of alleged embezzlement of client’s funds and have taken into custody the 47-year-old former Citigold wealth manager, who, according to the PPATK, used four different identification cards in her alleged embezzlement operation.

When asked how many high-ranking officials were suspected of money laundering in the Citibank fraud case, PPATK supervisory and compliance director Subintoro said it “may be more than 50”.

“The modus operandi is rolling over funds into other funds. For instance, [Malinda] withdrew Rp 5 billion (US$580,000) from Customer A, which goes straight into her office. Later on, she covers the Rp 5 billion with Rp 10 billion withdrawn from Customer B. Then she will withdraw from another big customer. That goes on,” Subintoro said.

PPATK, Bank Indonesia (BI) and the police plan to cooperate in investigating the Citibank fraud case, which may be worth more than the initial Rp 16 billion, all of which belongs to Citibank’s first-class customers.

Yunus said that Malinda should definitely be charged with money laundering, as she “withdrew and shopped funds that were not hers but her customers’ without their permission”.

Article 4 of the Law on Money Laundering stipulates that charges of money laundering could carry a 20 year prison sentence and a Rp 10 billion fine.

Citibank's country corporate affairs chief Ditta Amahorseya said, in response to the PPATK findings, "The information is not true. All Citibank accounts have gone through the KYC (know your customer) process."

Related Articles:

Bank employee arrested for stealing from customers’ accounts

Bank Victoria client reports case similar to Citibank

Former Pupuk Kaltim president director faces 4 years in jail

The Jakarta Post, Jakarta | Tue, 04/12/2011

Omay Komar, the former president director of fertilizer producer PT Pupuk Kaltim, is facing a four year jail sentence over a graft case surrounding the procurement of generator rotors for a company subsidiary.

Prosecutors also demanded that he pay a Rp 500 million (US$58,000) fine during Tuesday’s trial session at the Bontang District Court in East Kalimantan.

Prosecutors said he was guilty of approving the purchase of generator rotors for PT Kaltim Daya Mandiri, which is responsible for Pupuk Kaltim’s power supply, without a legitimate  tender process.

“Prosecutors believe that the defendant has been convincingly proven guilty and asked the panel of judges to sentence him to four years in prison and [oblige him] to pay a Rp 500 million fine or serve an additional three months in jail,” prosecutor Darfiah said as she read out the indictment.

The prosecutors said that although officially Pupuk Kaltim was no longer directly owned by the government, its assets still belonged to the state because it was run by state-owned PT Pupuk Sriwijaya, and thereby procurement activities should be in line with existing regulations.

Italian Consultant Denies Skimming Water Program Funds

Jakarta Globe, Heru Andriyanto | April 11, 2011

Related articles

• World Bank Targets Conflict in War Against Poverty
• AG Says Government Is Right to Scrap The Death Penalty for Corruption
• Prosecutor Cirus Sinaga Hit with Travel Ban
• New Corruption Bill Covers Private Sector, Foreigners
• AGO: Prosecutors Will Face Charges Instead of ‘Discipline’

An Italian consultant detained by the Attorney General’s Office had no direct role in the alleged pilfering of funds for a multimillion dollar government project, his lawyer claimed on Sunday.

Giovanni Gandolfi, an official from Italy-based engineering company C. Lotti & Associati, was arrested late on Thursday for allegedly falsifying invoices and billing statements for the Water Resources and Irrigation Management Project funded mainly by the World Bank.

Gandolfi, who worked as a consultant for the project, was accused of inflating amounts in payment claims to the government from 2007-09.

Authorities said the funds disbursed to C. Lotti were then deposited in a Bank Mandiri account under the firm’s name.

But the suspect’s lawyer, Yan Apul, blamed the company’s Indonesian partners for the padded amounts. “Actually, the financial documents were submitted by eight local partner companies,” Yan told the Jakarta Globe.

“The documents cover expenses including car and airplane leases, furniture and office equipment,” he said. “The partners met at [Gandolfi’s] office and provided their own billing statement.”

However, Yan acknowledged that his client, as project leader, had the authority to sign off on these documents.

“[Gandolfi] signed the invoices then forwarded them to the [Public Works Ministry’s] director general of water resources,” the lawyer said.

Noor Rachmad, an AGO spokesman, said on Friday that the suspect was “the first foreigner to be arrested by [the office] for a graft case.”

He said Gandolfi would be held at the AGO’s detention facility for 20 days from his arrest.

Based on initial audits from project centers in Jakarta, as well as East and West Java, Noor said state losses were estimated to be around Rp 6.5 billion ($750,000).

“This figure likely to increase because [we are still waiting for data] from 14 provinces covered in the project,” he added.

In recent discussions between the World Bank and C. Lotti, the Italian company admitted that some of the claims had been falsified by Gandolfi, Noor said. The firm agreed to pay the Indonesian government back $350,000.

Contrary to statements by his lawyer, Gandolfi reportedly “realized that the billings were incorrect” and signified his intention to return Rp 3.5 billion worth of funds, according to the AGO.

Noor said this was stated in a letter from C. Lotti dated Jan. 14 this year.

According to the World Bank Web site, the $115.6 million project, approved in 2003, aims to implement water sector reforms.

The International Bank for Reconstruction and Development, the International Development Association and the Dutch government financed $84 million of the project cost.

Related Article:

New Corruption Bill Covers Private Sector, Foreigners

World Bank, ADB Support Indonesia's Economic Corridor Scheme

Jakarta Globe, April 09, 2011

Indonesian President Susilo Bambang Yudhoyono and World Bank managing
director Sri Mulyani Indrawati, right, walking after having a meeting in Jimbaran,
Bali on Friday. This is the first time former Indonesian finance minister
Sri Mulyani Indrawati has met the Indonesian President as the managing
director of the World Bank. (JG Photo/J.P. Christo)

Related articles

• Asian Growth Strong Through 2012: ADB
• SBY Asks Businesses to Look Beyond Java in Growing Nation’s Economy
• ADB Extends $200 Million Two-Stage Loan to Indonesia
• Indonesian President Outlines 'Illnesses' Behind Development Program's Failure
• President Admits Development in Indonesia Has ‘Failed’

Jimbaran, Bali. The World Bank and Asian Development Bank (ADB) have voiced support for Indonesia’s plans to accelerate economic expansion.

Coordinating Minister for Economic Affairs Hatta Rajasa said on Saturday that ADB president Harihuko Kuroda and World Bank managing director Sri Mulyani — until last year Indonesia's top finance minister — had delivered their support at a meeting with President Susilo Bambang Yudhoyono.

“They will support the master plan to speed up infrastructure development and connectivity as the main pillar in the economic acceleration and integration of regional sector in six corridors,” Hatta Rajasa said.

According to government plans, six regions will be designated as main economic corridors. Sumatra will be developed as an agricultural and national energy center, while Kalimantan will focus on mining and energy, Sulawesi-North Maluku on agriculture and fisheries, Bali-Nusa Tenggara on tourism and supporting national food self-sufficiency, Papua-Maluku on natural and human resources, and Java on industry and services.

Hatta on Saturday said that the ADB intended to give direct assistance to both state and private enterprises to develop added value for Indonesian economic acceleration and expansion.

“Thus connectivity, capacity building, and human resources are the three main pillars the Asian Development Bank is interested in,” Hatta said, adding that he had been asked by President Susilo Bambang Yudhoyono to talk with the World Bank and ADB to follow up with the support.

The economic minister explained that based on ADB and World Bank evaluations, Indonesia’s economic situation at present was good, although it faces three problems — namely rising food price rises, oil prices and general inflation.

Antara, JG

Related Articles:

World Bank supports RI`s economic expansion master plan

Sri Mulyani Causes a Stir on Her Return

Sri Mulyani: RI should manage risks

Sri Mulyani greeted as celebrity at ASEAN meeting

Sri Mulyani: RI should manage risks

The Jakarta Post, Jakarta | Sat, 04/09/2011

Indonesia should prepare against potential global shocks, such as the rising prices of basic commodities, to sustain its economy. World Bank managing director Sri Mulyani Indrawati said on Friday.

Speaking at a meeting with President Susilo Bambang Yudhoyono in Jimbaran, Bali, on late Friday, the former finance minister said the Indonesian government should keep a watchful eye on global situations.

“Indonesia’s economy has been running well, but there are some risks it should manage, like the inflation rate, infrastructure problems and the like,” Sri Mulyani said as quoted by the presidential website, presidenri.go.

Rising food prices and continuing Middle East crises were among the challenges the nation faced, Sri Mulyani said.

She suggested that the government take precautions to improve food security and cooperate with other nations to cope with challenges.

S&P gives Indonesia a good grade

Financial Times, April 8, 2011 4:50 pm by Alexandra Stevenson

Things are looking up for Indonesia.

On Friday, Standard & Poor’s promoted it to within one notch of investment grade, edging the country further away from the perceived line of risky investments where most of its EM peers dwell. The ratings agency upgraded Indonesia’s long-term foreign currency sovereign credit and debt ratings to ‘BB+’ from ‘BB’, with a positive outlook, citing a steadily improving public balance sheet as the main reason.

S&P said it made the move because of Indonesia’s sustained high nominal GDP growth and falling net government debt – down to 24 per cent of GDP in 2010.

S&P’s has so far been the most cautious of the ratings agencies. In January, Moody’s upgraded its Indonesia rating to one notch below investment grade, and Fitch followed suit, upgrading its rating to BB+, in February.

Indonesia’s GDP growth accelerated to 6.1 per cent in 2010, up from 4.5 per cent in 2009, on the back of growing consumer spending, an increase in foreign direct investment and booming trade. In the last quarter of the year the economy surged an annualised 6.9 per cent.

Indonesia’s per capita GDP has doubled to US$3,037 in the six years to 2010, launching the country into the league of middle income countries for the first time. While this represents remarkable growth, its per capita GDP growth is still “signifcantly below” S&P’s median for the ‘BB’ rating category, the ratings agency said.

S&P cited shortfalls in infrastructure, legal uncertainties, corruption and the labour market as potential obstacles for Indonesia in obtaining higher growth.

“A stalling of reforms or the absence of timely and adequate policy responses to renewed fiscal or external pressures would result in the rating stabilizing or weakening,” Agost Benard, S&P credit analyst, said on Friday.

“We may raise the ratings if inflation pressure diminishes, the external debt burden declines, the sovereign’s balance sheet improves, or reforms such as subsidy rationalization suggest that fiscal and external vulnerabilities are further reduced,” he said.

But the country’s accelerated growth has raised inflationary pressure and Bank Indonesia has been criticised for getting behind the curve. Before it raised rates in February – by 25 basis points to 6.75 per cent – Indonesian rates had been at a record low of 6.5 per cent for 18 months.

Full marks to Indonesia for its better grade. Now it needs to keep up with its homework.

J&J settles bribery, kickback allegations: SEC

Reuters, WASHINGTON | Fri Apr 8, 2011 12:14pm EDT

(Reuters) - Johnson & Johnson (JNJ.N) has agreed to pay $70 million to settle U.S. charges that it paid bribes and kickbacks to win business overseas, the first major pharmaceutical company to settle since the Obama administration began its scrutiny of the industry more than a year ago.

Johnson & Johnson agreed to pay a $21.4 million fine to settle criminal charges and pay more than $48.6 million in disgorgement and interest to settle charges by the Securities and Exchange Commission, the SEC said in a statement.

The Justice Department announced in November 2009 that it would focus on prosecuting those in the pharmaceutical industry who try to bribe foreign officials for preferential treatment of their products, leading to a wide-ranging probe.

(Reporting by Jeremy Pelofsky, editing by Lisa Von Ahn)

Cosmetics and drugs giant Johnson & Johnson, the 15th largest
US company by market capitalisation, was found to have paid doctors
and hospital administrators in Europe for contracts and to promote
its drugs and medical devices / AFP

Related Articles:

Johnson & Johnson fined $67m for bribing doctors, paying kickbacks

Johnson & Johnson settles U.S. bribery charges

Drug companies pay 17,000 U.S. doctors, report finds

Former health ministry executive gets 3 years in prison

McKinsey implicated in Galleon trial

Ex-Goldman director charged with insider trading

Satyam and PwC are fined in US for accounting fraud

IBM Agrees to Pay $10 Million to Settle SEC Foreign-Bribery Allegations

Screwed by corporate America