RI will lead SE Asian economic growth in next five years: OECD

The Jakarta Post, Jakarta | Wed, 11/30/2011

With its large domestic market, Indonesia is expected to lead economic growth in six Southeast Asian countries over the next five years despite the slowdown in the global economy, the OECD says.

The Organization for Economic Cooperation and Development (OECD) estimates in its Southeast Asian Economic Outlook that Indonesia’s economic growth will move up an average of 6.6 percent between 2012 and 2016 from 6.3 percent in 2011 and 6.1 percent in 2010.

Indonesia’s average GDP during the five-year period will be the highest in the six major Southeast Asian countries, followed by Malaysia with an average of 6.3 percent, Vietnam with 5.3 percent, the Philippines with 4.9 percent, Singapore with 4.6 percent and Thailand with 4.5 percent, the organization estimates.

The organization also estimates that Indonesia’s GDP will grow at 6.3 percent in 2011, also the highest among the six countries followed by Vietnam at 5.9 percent, Singapore at 5.6 percent, Malaysia at 4.6 percent and the Philippines at 4.5 percent.

“Amid the global economic crisis, growth for the six Southeast Asian countries will moderate towards the first quarter of 2012 but remain robust through 2016,” OECD Development Center director Mario Pezzini told a press conference on Tuesday in Jakarta after the launching of OECD report on the Southeast Asian Economic Outlook 2011/2012.

He said that Indonesia would lead the region’s growth and keep its strong momentum thanks to its buoyant domestic demand. Underpinned by relatively strong investment, growth prospects in Malaysia will also remain robust in the medium term, though slower than the pre-2008 level, the report said. The Philippine economy also shows resilience owing to domestic demand and workers remittance. Singapore’s growth rate is expected to moderate to a level below the 2003-07 rate, due largely to weaker global trade flows.

“The unprecedented scale of floods has added to downside risks to the near-term prospect of Thailand,” the report said, adding that the near-term growth prospect of Vietnam would be affected by the tightening of monetary policies.

Meanwhile, Bank Indonesia’s director for economic and monetary policy research Perry Warjiyo saw “downside risks” to its 6.5 percent economic growth forecast next year due to the global economic slowdown. He called for a fiscal stimulus boost to reduce the impact of the global slowdown.

“At the end of the day, how big the impact of global downturn is on Indonesia heavily depends on how much the fiscal stimulus will be,” he said.

The Asian Development Bank (ADB) and other financial institutions have expressed similar concerns, citing government spending as the source of growth that needs be boosted next year to spur the economic growth. (fem)

Esther Samboh contributed to this story

S&P downgrades top US banks' credit ratings

Associated Press, Nov 29, 2011

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NEW YORK (AP) -- Standard & Poors Ratings Services is adjusting the ratings on 37 of the world's largest financial institutions, including downgrading the biggest banks in the U.S.

Bank of America Corp. and its main subsidiaries were among those cut at least one notch on Tuesday, along with Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley and Wells Fargo & Co.

S&P says the changes reflect its new ratings criteria for banks, which incorporate shifts in the worldwide financial industry and macroeconomic trends, including the role of governments and central banks in industry funding.

Top U.K. downgrades include Barclays, HSBC Holdings, Lloyds Banking Group and The Royal Bank of Scotland.

Ratings for several big European banks, including Credit Suisse, Deutsche Bank, ING and Societe Generale are unchanged.

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BofA, Goldman, Citi Credit Ratings Reduced by S&P (Bloomberg)

Downgraded:

• Banco Bilbao Vizcaya Argentaria S.A.
• Bank of America Corp.
• Bank of New York Mellon Corp.
• Barclays Plc
• Citigroup Inc.
• Rabobank Nederland
• Goldman Sachs Group Inc.
• HSBC Holdings Plc
• JPMorgan Chase & Co.
• Loyds Banking Group Plc
• Morgan Stanley
• Royal Bank of Scotland Plc
• UBS AG
• Wells Fargo & Co.

Upgraded:

• Bank of China Ltd.
• China Construction Bank Corp.

BI to encourage wider public access to financial institutions

Antara News, Tue, November 29 2011

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Jakarta (ANTARA News) - Bank Indonesia (BI or the central bank) plans to issue inclusive financial regulations aimed at increasing the public`s access to financial institutions, the bank`s deputy governor, Muliaman D. Hadad, said here Monday.

Muliaman said as the country`s monetary authority, BI was mulling the issuance of regulations to encourage wider inclusion of the public in access to financial services, including the possibility of moving this access from one place to another with the help of technology and regulations.

Low public access to financial institutions was caused by various factors such as distance, knowledge and collateral.

As Indonesian banks were playing a role in controlling about 80 percent of the financial industry in the country they were expected to build financial services that can be enjoyed by wider segments of society, he said.

BI was prompted to try to increase the public`s access to financial services after a BI survey on households in 2010 had shown that 62 percent of Indonesian households had no savings at all.

Currently, there are five inclusive financial activities pillars and five major products that will be the object of inclusive financial activities, he said.

The five main activities were financial education, financial information mapping, intermediary facilities, distribution channels and regulatory support.

Muliaman also said to the "inclusion" of more people in access to financial institutions, was not only the task of the banking community but also of the government in build public attitudes and the banking system`s capacity or cabilities.

Inclusive Finance is a comprehensive activity that aims to eliminate all forms of barriers to public access in the use of financial services, supported by a variety of infrastructure, he said.

Editor: Suryanto

Bakrie ‘Biggest Loser,’ Despite Indonesia’s Rich Getting Richer

Jakarta Globe, November 24, 2011

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Controversial businessman and politician Aburizal Bakrie and his family is “the biggest loser” in this year’s list of Indonesia’s richest people published by Forbes magazine.

The Bakrie family’s wealth dropped an estimated 57 percent, or $1.2 billion, despite the fortunes of Indonesia’s 40 most wealthy individuals or families increasing 19 percent.

The magazine said the growth in wealth, up to $85.1 billion, was due in part to the growth of Indonesia’s gross domestic product and the rising stock market.

The top three were named as:

1) R. Budi & Michael Hartono, the owners of Djarum Group, with a net worth of $14 billion

2) Susilo Wonowidjojo, president of Gudang Garam, with a net worth of $10 billion

3) Eka Tjipta Widjaja, the patriarch of the Sinar Mas Group, with a net worth of $8 billion

Forbes noted that the top three added $7.5 billion to their combined wealth and were now worth “a staggering $32.5 billion, representing 38 percent of the list’s total wealth.”

Rounding out the list were:

4) Low Tuck Kwong, owner of Bayan Resources, with a net worth of $3.7 billion

5) Anthoni Salim, Indofood’s president director and chief executive office, with a net worth of $3.6 billion

6) Sukanto Tanoto, diversified, with a net worth of $2.8 billion

7) Martua Sitorus, chief operating officer of Wilmar International Ltd., the world’s biggest palm-oil trader, with a net worth $2.7 billion

8) Peter Sondakh, investment, with a net worth of $2.6 billion

9) Putera Sampoerna, head of the Sampoerna family, with a net worth of $2.4 billion

10) Achmad “Met” Hamami, who owns Indonesia’s Caterpillar distributor, with a net worth of $2.2 billion

The magazine said five coal tycoons associated with Adaro Energy, including Bakrie, slipped in the rankings. “The person who effectively bailed them out, Samin Tan, is one of five

newcomers.”

Also gone were “Arifin and Hilmi Panigoro, who lost nearly half their fortune as shares of their MedcoEnergi fell.”

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RI, US agree on $600 mln cooperation project

Antara News, Fri, November 18 2011

US President Barack Obama and Indonesian President Susilo Bambang

 Yudhoyono shaking hands following statements to the press after their

 meeting on the sidelines of the Association of Southeast Asian Nations (Asean)

 and East Asia summits in Nusa Dua on Indonesia’s resort island of Bali on Friday.

(AFP Photo)

 Indonesian President Susilo Bambang Yudhoyono and US President Barack Obama announced the agreement in a joint statement to the press following their bilateral meeting at the Bali Nusa Dua Convention Center (BNDCC).

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Nusa Dua, Bali (ANTARA News) - Indonesia and the United States have agreed on a US$600 million cooperation project under a so-called "Millennium Challenge Corporation Compact" in support of environmentally friendly and sustainable development in the former.

Indonesian President Susilo Bambang Yudhoyono and US President Barack Obama announced the agreement in a joint statement to the press following their bilateral meeting at the Bali Nusa Dua Convention Center (BNDCC) here on Friday.

"Indonesia is thankful to the US for the Millennium Comprehensive Partnership worth US$600 million to support environmentally friendly development," President Yudhoyono said.

The cooperation was designed to assist Indonesia in developing clean energy, food and public health programs as well as in modernizing goods and service procurement process.

President Yudhoyono said the Indonesia-US relations had been improving since the two nations signed a comprehensive partnership agreement a few years ago.

In the political, legal and security fields both nations had been engaged in various activities such as dialogs, military education and training including the US grant of F-16s to Indonesia, he said.

Both nations also had signed a trade and investment agreement to increase investment and trade ties between the two nations, he said.

President Yudhoyono also expressed Indonesia`s wish to become a US strategic partner in building democratic cooperation which pays respect for human rights.

Meanwhile, President Obama said his visit to Bali for the 6th East Asia Summit was a concrete example of the US focus on the Asia-Pacific region to get better involved in the regional organization.

He shared Yudhoyono`s view that relations between the two countries had been improving since the signing of the comprehensive partnership agreement.

He said the signing of a commercial agreement between Boeing and Lion Air at Grand Hyatt Hotel in Bali earlier in the day was an example of the ever increasingly closer cooperation between the two nations in the economic field.

Under the agreement, Lion Air is planning to buy 200 Boeing planes for at least US$2 billion.

Editor: Heru

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China Pledges $10b Loan for Asean Neighbors

Jakarta Globe, November 18, 2011

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Nusa Dua, Bali. Chinese Premier Wen Jiabao said Friday Beijing would offer its Southeast Asian neighbors $10 billion in infrastructure loans, as he sought to deepen trade ties in the region.

He made the announcement in a speech at China’s meeting with the Association of Southeast Asian Nations (Asean) leaders on the Indonesian island of Bali, after Beijing in 2009 announced a similar $15 billion loan to the region.

The earlier loan “has supported more than 50 infrastructure development projects, involving almost all Asean countries,” said Wen, according to a copy of his speech released by China’s state news agency Xinhua.

He said China and the 10-member regional bloc should enhance financial cooperation, including “local currency swap and encourage the quoting of China’s yuan and Asean currencies in each other’s inter-bank foreign exchange.”

China has an ambitious goal to turn the yuan, also known as the renminbi, into a global currency rivalling the dollar.

“China-Asean relationship is solidly based and has great potential and a promising future,” said Wen, promising China would “forever be a good neighbor, good friend and good partner” of Asean

“We will work closely with you to implement all the agreements we have reached to bring more benefit to our people and make greater contribution to peace and prosperity in our region,” he said.

Wen announced the establishment of a 3.0 billion yuan ($470 million) fund to step up maritime cooperation with ASEAN states that covers marine research, navigation safety, combating transnational crimes, among others.

Agence France-Presse

Chinese Premier Wen Jiabao attends the 14th Association of

Southeast Asian Nations (ASEAN) Plus Three Summit in Bali,

Indonesia, Nov. 18, 2011. (Xinhua/Xie Huanchi)

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Rothschild Calls for Clean-Up at Bakrie’s Bumi Resources

Jakarta Globe, November 10, 2011

British financier Nathaniel Rothschild, left, has criticized the
 management and corporate governance at Bumi Resources,
 the Indonesian coal company he is trying to transform into a
 top-tier global miner, the Financial Times reported on
Thursday. (Antara Photo/File)

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British financier Nathaniel Rothschild has criticized the management and corporate governance at Bumi Resources, the Indonesian coal company he is trying to transform into a top-tier global miner, the Financial Times reported on Thursday.

The newspaper said it has seen a letter written by Rothschild calling for a “radical cleaning up” of Bumi, the Jakarta-based affiliate of London-listed Bumi Plc.

Rothschild is co-chairman of the London-listed firm, his joint venture with Indonesia’s politically connected Bakrie family that holds a 29 percent stake in Bumi Resources.

Aburizal Bakrie is the chairman of the Golkar Party.

“Both myself and the Bakries need an immediate transformation of the way you are choosing to manage PT Bumi Resources,” Rothschild wrote in his letter to Ari Hudaya, a long-time Bakrie family lieutenant who is chief executive of both PT Bumi Resources and Bumi.

It was the first public sign of strains in the relationship between the two business dynasties, who investors applauded a year ago for creating the world’s biggest thermal coal company.

In an interview with the FT, Rothschild said his relationship with the Bakries, major shareholders of Bumi, “is just fine,” adding that they would be “thrilled when they read a copy of this letter.”

Chris Fong, a spokesman for the Bakrie family, whose financial difficulties forced them to sell half of their Bumi stake this month, said the letter had taken them by surprise.

“Nat Rothschild hasn’t addressed these issues with us,” Fong said, referring to a passage in the letter in which Rothschild said that the Bakries wanted a transformation in Bumi Resources.

“If he wants to raise any issues, as a shareholder and board member, we would expect him to follow accepted corporate governance procedures and raise concerns at the board level and at the appropriate time.”

According to two sources close to the group, the letter was the result of a boardroom battle between the Bakries and Rothschild, in which Rothschild had demanded Ari Hudaya’s replacement as CEO.

Reuters was unable to contact Rothschild to seek comment.

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Police to let KPK probe funds received from Freeport

The Jakarta Post, Sun, 11/06/2011

The National Police said Sunday it will allow the Corruption Eradication Commission (KPK) to scrutinize police officers regarding funds they may have received from mining firm PT Freeport Indonesia to guard the company area in Papua.

National Police Chief Gen. Timur Pradopo said he supported any actions to help police uphold their public accountability and the truth in the Freeport fund case, tribunnews.com reported.

National Police spokesman Sr. Comr. Boy Rafli Amar recently said police received US$14 million from Freeport to guard the firm area in Papua.

Among the beneficiaries are 365 police officers who each received Rp 1.25 million (US$130) per month from Freeport.

The agreement was made between Freeport and the Papua Police in 2004.

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Religious Affairs Ministry Staff Arrested for Hajj Fraud

Antara News, November 05, 2011

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Police in Banten have arrested three officials from the Ministry of Religious Affairs who allegedly took money from Muslims hoping to perform the hajj pilgrimage this year.

Rangkas Bitung Police Chief Adj. Comr. Mohamad Mujib told Antara on Saturday that dozens of people had paid the officials as much as Rp 50 million ($5,600) each.

When the outraged victims failed to depart Indonesia as promised on Oct. 28, they contacted police.

Mujib identified one of the officials as Isep Saepudin, who along with his two colleagues, were based in Lebak district.

The trio had admitted to their crimes and faced a maximum of four years in jail for fraud and theft, he said.

Mujib appealed for other potential victims to come forward so the case could be processed quickly.

The head of hajj affairs at the Lebak offices of the religious ministry said he knew nothing about the fraud.

Antara

Indonesia ranks 124th in 2011 Human Development Index

Erwida Maulia, The Jakarta Post, Jakarta | Wed, 11/02/2011

The United Nations Development Program (UNDP) launched the 2011 Human Development Index (HDI) on Wednesday. The index again places Indonesia at 124th out of 187 countries surveyed.

In addition, Indonesia again ranks lower than five of its ASEAN counterparts, with Singapore leading in 26th place, followed by Brunei (33rd), Malaysia (61st), Thailand (103rd) and the Philippines (112nd).

Indonesia's 2011 HDI placing, which scores 0.617, is still higher than that of Vietnam (128th), Laos (138th), Cambodia (139th) and Myanmar (149th).

The 2011 list again puts Norway top of the index, with an HDI of 0.943, followed by Australia, the Netherlands, the United States and New Zealand, respectively.

“But when the index is adjusted for internal inequalities in health, education and income, some of the wealthiest nations drop out of the HDI's top 20. The US falls from #4 to #23, the Republic of Korea from #15 to #32, and Israel from #17 to #25,” the UNDP said in its 2011 Human Development Report.

“Other top national achievers rise in the IHDI [Inequality-adjusted HDI] due to greater relative internal equalities in health, education and income. Sweden jumps from #10 to #5, Denmark climbs from #16 to #12, and Slovenia rises from #21 to #14,” it adds.

The UNDP says HDI rankings are recalculated annually using the latest internationally comparable data for health, education and income. The IHDI was introduced in last year’s Human Development Report along with the Gender Inequality Index and Multidimensional Poverty Index in order to complement the original HDI, which as a composite measure of national averages does not reflect internal inequalities.

The 2011 HDI rankings placed Burundi (185th), Niger (186th) and Congo (187th) at the bottom.

Russia and China come bottom of bribe-paying survey

BBC News, 2 November 2011

Transparency International wants more action
to outlaw bribery

Companies from Russia and China are most likely to pay bribes when doing business abroad, a new survey suggests.The two scored worst out of 28 countries in a poll of 3,000 business executives conducted by anti-corruption group Transparency International (TI).

The Netherlands and Switzerland came top, while the UK ranked eighth, just ahead of the US and France.

Bribery was reportedly most common to win public sector works and construction contracts.

'No integrity'

"It is of particular concern that China and Russia are at the bottom of the index," said TI in its report.

"Given the increasing global presence of businesses from the countries, bribery and corruption are likely to have a substantial impact on societies in which they operate and on the ability of companies to compete fairly in these markets."

Other major developing economies came much higher up the rankings. India was 19th, while Brazil, in 14th place, was one spot ahead of Italy.

The report called for more international action to outlaw companies from paying bribes in foreign countries.

Bribe Rankings - worst offenders last

• 1. Netherlands, Switzerland 
• 3. Belgium 
• 4. Germany, Japan 
• 6. Australia, Canada 
• 8. Singapore, UK 
• 10. US 
• 11. France, Spain 
• 13. South Korea 
• 14. Brazil 
• 15. Hong Kong, Italy, Malaysia, South Africa 
• 19. India, Turkey 
• 22. Saudi Arabia 
• 23. Argentina, UAE 
• 25. Indonesia
• 26. Mexico 
• 27. China 
• 28. Russia

"G20 governments must tackle foreign bribery as a matter of urgency," said Huguette Labelle, chair of TI, who said that more resources must be dedicated to investigations and prosecutions.

Russia, which came bottom of the league, was seen by TI as a particularly challenging case.

"Unfortunately... there are no islands of integrity in Russian public and business life," said TI Russian director, Elena Panfilova.

'Cheating taxpayers'

Survey respondents were asked to say how likely companies from each of the foreign countries were to offer back-handers.

Bribe-paying was seen as much more common by businessmen from countries whose governments were also considered to have the least integrity, according to a separate "corruption perceptions" survey carried out by TI last year.

The sector most affected by bribery was public procurement - where companies compete to win contracts from governments for everything from waste collection to road building.

TI noted that the nature of public sector contracts - which are usually large, complex and involve many sub-contractors - makes it much easier to inflate costs and hide inappropriate payments.

However, TI said that paying bribes to win major infrastructure and housing projects "effectively cheats taxpayers out of their money" and can undermine safety standards.

The survey indicated that companies paid bribes almost as routinely to other businesses as they do to government officials.

The mining and the oil and gas sectors - in which Russia and China are most active - also scored low in the poll.

Agriculture was considered the least bribe-prone, while banking ranked the fourth least-corrupt out of 19 industries. 

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Demonstrators put 600 green brooms on Copacabana beach to protest 

against corruption in Brazilian politics. Photograph: Rex Features