Police Fire 119 Officers This Year, but Djoko Susilo Still on Payroll

Jakarta Globe, Farouk Arnaz, Dec 31, 2014

Insp. Gen. Djoko Susilo looks to his lawyer during the delivery of his verdict at a
courtroom in Jakarta in this Sept. 3, 2013, file photo. (Reuters Photo/Beawiharta)

Jakarta. A total of 119 police officers have been fired in the past year, but Indonesia’s most infamous cop — Insp. Gen. Djoko Susilo — is still on the payroll.

Djoko, the former chief of the National Police’s traffic division, was sentenced to 18 years in jail and fined Rp 1 billion ($80,000) after he was found guilty of corruption in the Rp 200 billion procurement of driving simulators for use in tests to issue driver’s licenses.

“The total of 119 is less than last year, when there were 208 [officers who lost their job],” Gen. Sutarman, the chief of National Police, said on Wednesday.

Sutarman said that the reason why Djoko was still officially employed was that police were waiting for an internal ruling on his status.

Djoko tendered his resignation but may instead be fired from the force. A police commission is yet to rule on the matter.

Apart from the officers being fired, another 127 cops were convicted in a criminal court — 23 more than last year.

Another 9,892 officers were given disciplinary sanctions, while 444 were found to have violated the police code of ethics.

However, no fewer than 35,119 officers of the National Police were given commendations this year for exceptional service.

Corruption crackdown

Indonesian police have been trying to boost their image by cracking down on corruption and ineptitude within the ranks

Earlier this month, just days after a controversial new regulation banning motorcycles from some of Jakarta’s main streets caused chaos and confusion, the director of the city’’s traffic police unit was relieved of his command, just seven months into the job.

Sr. Comr. Restu Mulya Budiyanto just turned out to be not the right man to fix the capital’s traffic woes, Sutarman told the Jakarta Globe at the time, stressing that the replacement had nothing to do with a recent corruption scandal involving a number of top traffic cops.

The police force has long been identified by Transparency International as one of the most corrupt institutions in Indonesia.

In February, the National Police named Sr. Comr. Conny Tri Restyoko, the former Surabaya Police chief, a suspect for allegedly swindling colleagues out of Rp 800 million. He was said to have invested the money in a vehicle license and registration agency, which reportedly benefited from his connections to the traffic police to expedite the issuance of the documents.

As world honours the dead, Indonesia begins tsunami memorials

Yahoo – AFP, Nurdin Hasan, 26 Dec 2014

Women attend a prayer service at Baiturrahman Mosque in Banda Aceh, in

 the northern Sumatra island, on December 25, 2014, prior to the 10th anniversary

 of the tsunami that hit the west coast of Aceh province (AFP Photo/

Chaideer Mahyuddin)

Thousands of people held a memorial Thursday in Indonesia's Aceh province, the epicentre of the Indian Ocean tsunami, as the world prepared to mark a decade since a disaster that took 220,00 lives and laid waste to coastal areas in 14 countries.

On December 26, 2004 a 9.3-magnitude earthquake off Indonesia's western coast sparked a series of towering waves that wrought destruction across countries as far apart as Indonesia, Thailand, Sri Lanka and Somalia.

Among the victims were thousands of foreign holidaymakers enjoying Christmas on the region's sun-kissed beaches, striking tragedy into homes around the world.

A tourist rides a bicycle past a poster

 ahead of the tenth anniversary of the 2004

 tsunami at Patong beach in Phuket

 province on December 25, 2014 (AFP\

 Photo/Pornchai Kittiwongsakul)

Muslim clerics, tsunami survivors and rescue workers led around 7,000 mourners gathered at Banda Aceh's black-domed Baiturrahman Grand Mosque for memorial prayers late Thursday.

Malaysian cleric Syeikh Ismail Kassim said he and several hundred compatriots attended to show support for Aceh.

"We hope Aceh people will not waver as a result of the calamity that has befallen them," he told AFP.

Aceh governor Zaini Abdullah thanked Indonesians and the international community in his address at the mosque, one of the few buildings which withstood the wrath of the massive earthquake and ensuing waves which left 170,000 people in the country dead or missing.

"The tsunami had caused deep sorrow to Aceh residents from having lost their loved ones," he said.

"Sympathy from Indonesians and the international community has helped (Aceh) to recover," he added.

He also called on residents not to "dwell in our grief, so that we could rise from adversity and achieve a better Aceh".

Kamaruddin, a fisherman who like many Indonesians goes by one name, said he attended the prayers to remember his wife and three children who died in the tsunami.

"I hope there will be no more disasters in Aceh," the 50-year-old said.

In Meulaboh, a fishing town considered to be the ground zero of the tsunami -- where 35 metre-high waves flattened almost everything -- Indonesian flags were flown at half-mast as small groups of residents held night prayers at mosques.

The main memorials were planned for Friday morning, starting in Aceh which was hit first by the waves, then moving to Thailand where candlelit ceremonies are expected in the resort hubs of Phuket and Khao Lak.

There will also be events in Sri Lanka, including at the site where a train carrying 1,500 people was washed away, as well as in several European capitals to remember foreign nationals who perished.

'Like being in a washing machine'

Many of the tsunami's victims died in dark, churning waters laden with uprooted trees, boats, cars and eviscerated beach bungalows, as the waves surged miles inland and then retreated, sucking many more into the sea.

Thailand saw 5,395 people killed by the disaster -- half of them foreign holidaymakers.

British survivor Andy Chaggar was in a bungalow on Thailand's Khao Lak when the tsunami waves struck, taking his girlfriend's life and sweeping him inland.

This picture taken on December 4, 2014 shows people visiting the Ban Nam

Khem tsunami memorial park wall in Khao Lak (AFP Photo/Nicolas Asfouri)

"I came to in the water... there was glass, metal, there were pieces of wood, bricks, it was like being in a washing machine full of nails," he told AFP on Thursday, on the same beach where he lost his girlfriend.

As the scale of the tragedy emerged, disaster-stricken nations struggled to mobilise a relief effort, leaving bloated bodies to pile up under the tropical sun or in makeshift morgues.

The world poured money and expertise into the relief and reconstruction, with more than $13.5 billion collected in the months after the disaster.

Almost $7 billion in aid went into rebuilding more than 140,000 houses across Aceh, thousands of kilometres of roads, and new schools and hospitals.

The vast majority of Indonesia's 170,000 victims perished in the province, among them tens of thousands of children.

But the disaster also ended a decades-long separatist conflict, with a peace deal between rebels and Jakarta struck less than a year later.

It also prompted the establishment of a pan-ocean tsunami warning system, made up of sea gauges and buoys, while individual countries have invested heavily in disaster preparedness.

But experts have cautioned against the perils of "disaster amnesia" creeping into communities vulnerable to natural disasters.

Related Articles:

Tsunami devastation remembered in Asia, 10 years on (+Video)

"Current" Events –  Apr 10, 2005 (Kryon Channelling by Lee Carroll)

“… Mass Human Death

The final one, dear Human, is the hardest one for my partner and the one we wish to leave you with in this channeling tonight. This is the one that my partner doesn't want to even have me talk about. It's the appropriateness of mass death. For you, built in to your very essence is the honor for life, and the sorrow when it passes. It's correct and appropriate that this is there, and never let it be tempered. But the wisdom of understanding is also needed to help you get past some challenges of the Human heart.

"Dear Kryon, was the tsunami really necessary?" Yes it was. Almost 200,000 Human Beings passed over. It's an event that for you is filled with horror, sorrow, emotion, and challenge. Back in 1989, we told you of those that might have to leave the earth en masse, and here it is. Yet even my partner [Lee] asks the questions, "Why the children? Why the poorest parts of the earth? Why the seeming inappropriateness of all this death?"

And I say to you the same thing I said with respect to Terri: Do you understand yet that death is often as precious as life on this planet of many energies and lessons? They are not gone! They're all here [speaking from Kryon's perspective]. They're having a great time! They're joyful! It seems like a moment ago they leaned into the wind of birth with us beside them. We said, "How would you like to participate in an event that will change the compassion factor of the planet so that energies can move forward and provide faster acceleration of vibratory shift? How would you like to help create peace on earth through a consciousness shift within Gaia itself? And they said, "Show us the way!"

Do you understand why we are in love with humanity... that you would love the earth and the Universe so much that you would go through these things? So much of what you see is horrible tragedy, yet you're looking at the heroes of humanity as they deliver a gift that will change the very fabric of Gaia through the compassion created as a wave of humanity responds to their plight.

They knew the potentials and they went through with it. Even the children knew, for they're old souls within their divinity. There was so much compassion created at that time, in that one week, the earth has never seen anything like it in your lifetime. Billions of Humans were involved with a compassion that instantly went to the core of the planet. It went into the earth and it's still there. It changed the actual energy of where you walk and it planted a seeds that will grow that will indeed emerge later in Israel, and those surrounding Israel.

And that's what it's about. Yet some of you didn't want to hear that, did you? But they're here, with me now... and with you as well. How could you fit them all in this room, you might ask? They can fit on the head of a pin! That's interdimensional talk. They can go home in your purse or your pocket! That's interdimensional talk, too. And they've got a message for you that we've given before, but you can't hear it enough: "We did our part - now you do yours, Lighthouse! For the ones who remain are the only ones who can manipulate the tools we have helped create."

When you go home tonight, you're not going to be in a survival situation - in a tent in a tribe with no lights or clean water, with no food. You're not going to be in sorrow or despair. Instead, you go home to a warm place with plenty of food and friendship and the love of family. That's why you're the Lighthouses, because you have time for it. You've got the intellect for it. You're not in survival mode, as is so much of humanity on the earth. You have the education for it and the intuition for it. Now, do you understand why there are so many Lighthworkers in the western world? It's because your culture has created a situation where there's abundance of these things, and it allows you to lead the way in changing the energy of earth, instead of having all your time spent just trying to survive. Does this help you understand the responsibility of what you have before you?

Strike the light and send it to the Sudanese. Strike light and send it to those dark places with governments where there's corruption. Strike the light and send it to the scientists and researchers who already have the cures for the more virulent diseases on the planet, but can't begin their work due to the barriers of certain leadership and their old ways. Strike the light and send it to Israel and Palestine and get on with this solution! This is why you're here, and this is the agreement you made when you arrived and selected the culture you live in.

Achievable in your lifetime, it is. Peace and compassion will prevail. You shall see. You shall see.

And so it is.

Kryon

Business Lobby Urges Tax Amnesty for Reinvestment in Indonesia

Jakarta Globe, Muhamad Al Azhari, Erwida Maulia & Agustiyanti, Dec 22, 2014

By 2016, about $200 billion of assets by high net-worth individuals in Indonesia will
 be held in Singapore in the form of bank deposits, stocks, fixed income and properties,
according to McKinsey & Company. (AFP Photo/Roslan Rahman)

Jakarta. A leading business lobby with strong ties to the administration of President Joko Widodo has called for a tax amnesty, in which the authorities will waive off past taxes and penalties to conglomerates and individuals parking billions of dollars worth of funds overseas, in a bid to reinvest that money in Indonesia.

Hariyadi Sukamdani, the chairman of the Indonesian Employers Association, or Apindo, made the call last week amid recent sharp volatility in the rupiah exchange rate on expectations of a huge outflow of funds from the country once the US Federal Reserve raises its benchmark interest rate.

“It may sound unfair that tax offenders get an amnesty. But the question is, do we want to move forward or keep looking backward?” Hariyadi said.

Among those that would benefit under such an amnesty are conglomerates and banking executives who defaulted on government bailout funds in the wake of the 1998 Asian financial crisis and stashed the money in Singapore.

The government back then spent more than Rp 460 trillion ($37.1 billion) in liquidity to bail out several banks that were devastated by the crisis, which included a sharp fall in the value of the rupiah.

The government still maintains a list of the companies and individuals that fled with the money, and has prosecuted only a handful.

Since the crisis many Indonesian conglomerates continue to park their money in Singapore in a bid to keep it beyond the reach of the Indonesian authorities and to take advantage of the city-state’s position as a global financial services hub.

“Why am I raising this issue?” Hariyadi went on.

“We all know billions of dollars of money parked in Singapore is the money of Indonesian tycoons. This money has been used by financial corporations there to speculate and even buy assets in our country. Isn’t that silly?

“Just look at Italy; it is a country of mafia [sic], yet they managed to bring back more than $100 billion to their country from a tax amnesty program.”

Italy’s tax amnesty program was introduced in 2001, and by 2009 had yielded some 80 billion euros ($97.8 billion) of the 500 billion euros that the country’s central bank estimated was held by its citizens in undeclared funds overseas.

So-called high-net-worth individuals in Indonesia, with assets of at least $1 million, will hold a projected $250 billion overseas by 2016, according to management consulting firm McKinsey & Company.

Four-fifths of that amount, or approximately $200 billion, will be held in Singapore in the form of bank deposits, stocks, fixed income and properties.

The figures, released last week, come from McKinsey’s survey of 60 high-net-worth individuals, 83 percent of whom said they had foreign bank accounts and kept 40 percent to 50 percent of their financial assets overseas.

McKinsey partner Guillame de Gantes said the funds could benefit Indonesia’s financial markets if kept inside the country.

Citing the findings from the survey, de Gantes named business considerations as the main factor for keeping money overseas, followed by the availability of banking products, tax advantages, immigration issues, risks avoidance and, lastly, security and privacy.

Finance Minister Bambang Brodjonegoro said his ministry was considering some tax incentives, including a tax amnesty and the omission of double taxation, to lure wealthy Indonesians to withdraw their assets from abroad and deposit them at home.

“If we want the money to quickly come in, tax amnesty is the choice. We’re considering [the option], but will need legislation for that. The tax law must be amended,” Bambang said.

A lighter version of a tax amnesty was implemented by the administration of the former president, Susilo Bambang Yudhoyono, in 2008, through the so-called sunset policy.

This policy allows taxpayers to pay unreported or back taxes without the penalty of interest charges. The purpose of the program is to boost the number of registered taxpayers.

Bambang said that eliminating double taxation may also have instant results in terms of repatriating money to Indonesia. “We must implement those policies slowly, though, because we have to examine each option,” he said.

Earlier, a deputy commissioner for banking supervision at Indonesia’s Financial Service Authority (OJK), Mulya Siregar, said as many as 40,450 Indonesians were currently classified as high-net-worth individuals with a combined wealth inside the country totaling $143 billion. The number of these individuals grows by around 7.5 percent annually.

“That exceeds the growth rate in Singapore, at 4.5 percent, and India, which is 2 percent,” Mulya said.

Ragimun, a researcher with the Finance Ministry’s fiscal policy office, said that although a tax amnesty was an option worthy of consideration, it should not be implemented in the near future.

“One of the flaws of a tax amnesty, if implemented in Indonesia, is that it may lead to a range of violations and moral hazards, because access to information here and other facilities needed as prerequisites for a tax amnesty are not yet adequate,” he said in an analysis published on the Finance Ministry’s website.

“A tax amnesty [plan] must be delayed pending [...] legal tools to support implementation of the policy.”

Ragimun added that public resistance to a tax amnesty remained high, suggesting that alternatives like the sunset policy and tax holidays would make taxpayers more compliant with the law and subsequently boost Indonesia’s tax revenue.

Revrisond Baswir, a political economist at Yogyakarta’s Gadjah Mada University, was quick to slam Apindo’s suggestion.

“Apindo was among those that pushed strongly for the [subsidized] fuel price hike, which is certainly burdening the people, from the higher price of fuel to other things,” he said.

“Now they’re asking for a tax amnesty. So there’s an impression here that while people at large are made to bear a greater burdens, the rich will enjoy a lighter burden.”

Revrisond added there was no guarantee that a tax amnesty would lure wealthy Indonesians to keep most of their funds inside the country, saying concerns over domestic political stability were the main factor driving them to look overseas.

“Even Indonesia’s high interest rate is proven to have no effect [to lure them to keep their money here]. There are many other factors to consider, the most important being political stability,” he said.

Revrisond added that with most of Indonesian high-net-worth individuals being of ethnic Chinese descent, the issue of social and income gaps between them and “native” Indonesians might also become an issue once again, citing the May 1998 riots that targeted Chinese-Indonesians and their businesses.

The rioting, reportedly instigated by elements in the military, also included the rape of hundreds of Chinese-Indonesian women, and resulted in countless Chinese-Indonesians fleeing the country and not returning.

“The problem is, we’ve never been open about this wide income and social gap in our society, which has caused the feeling of insecurity to linger [among ‘native’ Indonesians] and the wealthy Chinese-Indonesians to remain on guard,” Revrisond said.

This is what has kept wealthy Chinese-Indonesians putting a considerable amount of their money abroad rather than leaving it in the country, he added.

Further Coverage

Editorial: Tax Amnesty Without Trust Is Not Enough

Related Article:

Indonesia, Singapore Agree to Step Up Sharing of Tax Information

Ruling in Favor of Indonesia Against Century Owner

Setting a Decision: ‘Justified’ bailout within the discretion and authority of the government, according to international tribunal

Jakarta Globe, Muhamad Al Azhari, Dec 18, 2014

A closed sign is put in front of the Bank Century office in Jakarta on Nov. 21, 2008.
THe bank now has been renamed Bank Mutiara. (JG Photo/Jurnasyanto Sukarno)

Jakarta. An international tribunal ruled in favor of the government of Indonesia in a case involving the controlled takeover of Bank Century from Saudi businessman Hesham Al Warraq, a law firm representing Indonesia said in a statement on Thursday.

“The Tribunal’s award follows a 2013 decision against Al Warraq’s partner, Rafat Ali Rizvi,” KarimSyah Law Firm said on Thursday.

KarimSyah represented Indonesia in the arbitration in conjunction with the Attorney General’s Office. The law firm also provides outside assisting counseling to Indonesia.

KarimSyah has brought victory for Indonesia in other international cases, including Indonesia one against US mining giant Newmont Mining over divestment of the miner’s Indonesian unit.

The Bank Century case began in November 2008 — at the height of the global financial crisis. Indonesian regulators bailed out the ailing lender through a Rp 6.7 trillion ($536 million) injection in an attempt to prevent systemic banking failure, which could pose risks to the economic stability of the nation.

After the bailout, the government, through Indonesia’s deposit insurance agency, known as LPS, took over the control of Bank Century, which has since been renamed Bank Mutiara.

Indonesian prosecutors brought criminal charges under Indonesia’s anti-corruption and anti-money laundering laws against previous owners Al Warraq and Rizvi, who accused them of draining more than $300 million out of the bank.

Neither investors appeared for the trial, but both were convicted in Indonesian court in absentia.

Al Warraq brought a claim through the Organization of the Islamic Conference Investment Agreement against the government of Indonesia in 2011.

He sought for compensations over what he defined as an expropriation of his shares in Bank Century.

The court favored Indonesia, saying: “It is the view of the Tribunal that the bailout was within the discretion and authority of the government and was completely justified, particularly since Bank Century … could have caused a systemic risk to the entire Indonesian financial system.”

The tribunal also rejected Al Warraq’s claim that he was not afforded fair and equitable treatment in Indonesia.

For the embezzlement charge, the court called for different dispute resolution processes.

Bank Mutiara is now controlled by J Trust, a Tokyo-listed financial institution, which acquired a 99 percent stake in the Indonesian lender from LPS for Rp 4.41 trillion.

Son Jailed Over Video Graft at Father’s Former Ministry

Jakarta Globe, SP/Erwin Sihombing, Dec 17, 2014

Riefan Avrian was sentenced to six years in prison for embezzlement at the
Jakarta Anti-Corruption Court on Wednesday. (Antara Photo/Yudhi Mahatma)

Jakarta. Jakarta’s Anti-Corruption Court sentenced the son of a former minister to six years in prison on Wednesday, after he was found guilty of embezzling money in the procurement of outdoor video monitors for his father’s ministry.

Riefan Avrian was found guilty of incurring state losses amounting to more than Rp 4 billion ($334,000) by rigging a bid for the procurement of video monitors.

His father Syarief Hasan, the former Minister of Small and Medium-Seized Enterprises — and current acting chairman of the Democratic Party — was not charged in the case.

“The court sentenced the defendant to six years in prison and orders him to pay a Rp 200 million fine,” presiding judge Nani Indrawati told the court on Wednesday.

The court also ordered Rievan to pay the state Rp 5.39 billion within one month or face an additional two years in prison. The amount is understood to include legal costs.

The conviction is a victory for anti-graft prosecutors, who had demanded eight years in prison.

Nani said Riefan had manipulated Hendra Saputra, an office assistant at Imaji Media, whose job was to run errands but was listed as the company’s director.

Riefan paid Hendra Rp 19 million to use his name on the tender documentation. Riefan later offered Rp 100 million after Hendra was arrested in a bid to keep his name out of the case.

“The defendant knew that Hendra worked in his office as an errand boy and that he did not even graduate from elementary school,” judge Sofialdi told the court.

Hendra was convicted earlier in the year for his part in the case. He was sentenced to a year in prison.

The case came to light after the Supreme Audit Agency (BPK) found that payments did not match the market value of the equipment.

Riefan’s company, Imaji Media, was set up for the sole purpose of the tender in 2012. The project was worth Rp 23.4 billion.

Riefan said he needed some time to consider if he would file an appeal.

KPK to Step Up Regional Monitoring With New Branch Offices

Jakarta Globe, Dec 15, 2014

A visitor looks at an exhibition as part of an anti-corruption festival at Gadjah
 Mada University (UGM) earlier this month. (Antara Photo/Noveradika)

Jakarta. The Corruption Eradication Commission (KPK) plans to start opening branches across the archipelago next year in order to improve its supervision of regional governments, one of its leaders has announced.

Bambang Widjojanto, a deputy chairman at the KPK, said on Sunday evening that the anti-graft body was considering opening one branch office in Sumatra next year, as part of its plan to open at least five branch offices throughout Indonesia in the next ten years.

“We’ve decided to open a representative office in one of the provinces in Sumatra in 2015,” said Bambang, as cited by Tempo. “We’re still studying in which province we should build our office.”

Bambang said that the branch office would focus on preventing corruption in the local government. He also said that the KPK would recruit local people to help them fight against corruption at the regional level.

“We’re sure that there will be many agents of change. We need a renewed spirit in eradicating corruption,” he said.

The chairman of Commission III of the House of Representatives, Benny K. Harman, said he fully supported the KPK’s proposal.

“We’ll definitely support the KPK. It’s a good plan, and it needs to be implemented right away,” Benny said on Monday.

Indonesia, Singapore Agree to Step Up Sharing of Tax Information

Jakarta Globe, Reuters, Dec 15, 2014

Indonesia and Singapore have

agreed to step up efforts to counter

cross-border tax evasion. (Reuters

Photo/Edgar Su)

Jakarta. Indonesia and Singapore have agreed to step up efforts to share tax-related information to tighten loopholes on tax evasion in each other’s countries, Indonesia’s finance ministry said.

The commitment came after Indonesia’ Finance Minister Bambang Brodjonegoro met his counterpart Tharman Shanmugaratnam in Singapore on Monday, the ministry said in a statement.

Indonesia and Singapore have an agreement to exchange tax-related information upon request, including data from financial institution and individuals, since 1992.

“Exchanging information by request is not enough to reveal all assets hidden by citizens of both countries. Therefore, to accelerate information flows, Indonesia and Singapore have committed to exchange information automatically to complement the mechanism for information exchange by request,” it said.

The mechanism should start as early as 2017, or at the latest, by end of 2018, the statement said. Both countries have also agreed to amend local legislation to support the exchange of information.

Singapore’s finance ministry could not be immediately reached for comment.

In a bid to tackle cross-border tax evasion, countries across the world are signing up to new standards drawn up in 2013 by the Organisation for Economic Co-operation and Development (OECD) for “automatic exchange of information”. Under these standards, countries can sign reciprocal agreements that they will automatically share certain pieces of financial information about each others’ taxpayers.

Indonesia’s new president Joko Widodo has made improving tax collection as one of his priorities. During his campaign, he pledged to increase Indonesia’s tax ratio to 16 percent of gross domestic product from around 12 percent now.

Many wealthy Indonesians are known to have assets in Singapore.

Govt to ‘Help’ Lapindo With Mudflow Compensation, Offers to Buy Assets

Jakarta Globe, Ezra Sihite, Dec 08, 2014

Children play on swings on the embankment of the Lapindo mudflow. Victims
 are still waiting for full compensation from the company accused of triggering
the disaster. (JG Photo/Arief Priyono)

Jakarta. Victims of the Lapindo mudflow disaster in Sidoarjo, East Java, are one step closer to being compensated for losses — eight years after dozens of villages and hundreds of hectares of farmland were swamped.

The government announced on Monday that it would buy assets from the company accused of triggering the disaster, Lapindo Brantas, which could then use the proceeds to pay out Rp 781 billion ($62 million) due to victims this year.

Minister of Public Works Basuki Hadimuljono said the government would buy about 20 percent of the company’s assets, which was mostly land, in affected areas.

The announcement comes just days after President Joko Widodo — through cabinet secretary Andi Widjajanto — ordered Lapindo Brantas to wrap up payments to victims of the mud volcano. On top of the Rp 781 billion owed to residents, the company, which is affiliated with the family of Golkar Party chairman Aburizal Bakrie, must pay Rp 500 billion to affected businesses in 2015.

“They still have around Rp 1.4 trillion to pay,” Andi said. “We’re waiting for it.”

The government’s decision to buy assets from Lapindo Brantas is bound to raise questions about why money from the state budget was essentially being used to compensate a mistake made by the company.

The government is already required to pay Rp 300 billion compensation to victims whose land is located outside the map of affected areas. A 2012 judicial review which sought to have the company cover all compensation costs in areas affected by the mudflow was rejected by the Constitutional Court.

Andi said buying the company’s assets was part of the government’s effort to “help” Lapindo Brantas fulfill its responsibilities.

Lapindo Brantas was conducting gas exploration in the Sidoarjo area in 2006 when one of its natural gas wells blew out, causing a mud flow which destroyed hundreds of homes, swamped 720 hectares of land and displaced thousands of people.

Scientists blame drilling activities by the company for triggering the eruption, but the government at the time decreed it a natural disaster.

Related Articles:

Taxpayers Still Footing the Bill For Sidoarjo Mud

Residents hope govt will fulfil Lapindo compensation promise

Boediono Wants Lapindo Disaster Area for 'Nature Recreation'

Lapindo Told to Shell Out For Mudflow Before Drilling Again

Lapindo Disaster Caused By Human Error: Study

Indonesia's mud volcano flows on

Satellite picture received from Ikonos Satellite Image on May 29, 2008 shows

the mud volcano and its surrounding area in Sidoarjo, East Java. (AFP/Ikonos

Satellite Image)

More pictures ....

PLN Next in Line for Management Shake-Up After Pertamina, Minister Says

Jakarta Globe, Dec 08, 2014

Two workers fix an electricity network operated by state-owned electricity firm
Perusahaan Listrik Negara (PLN) in Semarang. (JG Photo/Dhana Kencana)

Jakarta. State Enterprises Minister Rini Soemarno confirmed on Monday that the government was planning a management shake-up at the state power utility.

The move is part of a series of reforms initiated by the administration of President Joko Widodo aimed at boosting confidence in Indonesia’s economy.

The minister said the management of Perusahaan Listrik Negara (PLN) would be restructured similar to that of state energy firm Pertamina, which last month saw its entire board of directors dismissed and a new chief appointed. Six new directors were added this week.

“We first performed an analysis in terms of restructuring Pertamina’s management and we’ll try to do the same for other SOEs in the future,” Rini told reporters, declining to elaborate on the time frame of the planned changes.

“The extent of the changes will depend on the activities of the SOEs themselves,” she said, adding that PLN, which has a monopoly on electricity distribution across the archipelago, would be next.

The management changes could come this month and would include a partial or total replacement of PLN’s board, the Wall Street Journal reported, quoted by Reuters.

Joko’s administration seeks to accelerate electricity connectivity in the country to support his 7 percent annual growth target.

The government plans to build new power plants to add an additional 35,000 megawatts to the national grid between 2015-2019, boosting Indonesia’s electricity generating capacity to 85,7000 MW.

The plan will reportedly cost around Rp 980 trillion ($80 billion), with Rp 545 trillion expected from PLN. The remainder is expected to come from the private sector.

PLN plays a key role in Indonesia’s economy as it is not only a power producer, but also the biggest electricity distributor.

Rini, former head of Indonesia’s biggest auto distributor Astra International, also called for an end to SOE dividend payments to the government, saying profits will be used for capital expenditure.

Reuters & JG

Related Article:

Indonesia Clears Path for Geothermal Energy as Power Needs Rise

VP Kalla Tells Business Owners to Behave

Jakarta Globe, Novianti Setuningsih, Dec 08, 2014

Vice President Jusuf Kalla, left, talking with Trade Minister Rachmet Gobel at
 the leadership meeting of the Indonesian Chamber of Commerce and Industry
(Kadin) on Monday. (Antara Photo/Muhammad Adimaja)

Jakarta. Vice President Jusuf Kalla in a speech for the Indonesian Chamber of Commerce and Industry (Kadin) on Monday urged the nation’s entrepreneurs to stop ruining the environment and pay their taxes.

“In the wood-trading era, in the 1960s and 70s, a lot of trees were cut down, causing floods that we still have to deal with until now,” said Kalla, himself a successful businessman.

The vice president also told the hundreds of entrepreneurs attending Kadin’s national leadership meeting that the government was going to improve its natural resources management.

“The mining sector was profiting while our environment was wasted. The [new] regulation is made to protect our natural resources,” Kalla said.

He added that business should also pay all taxes and royalties they owe, and that owners could be banned from traveling abroad if they fail to do so.

Kalla explained that the government needed the income from taxes and royalties to help fund its program to improve the nation’s infrastructure.

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Globe Asia’s Power 50 List: Most Influential Indonesians in 2014

A changing political constellation

Jakarta Globe, Shoeb K Zainuddin and Alberto Weldison, Dec 08, 2014

Every country, just like a corporation, needs constant renewal. New leadership brings
 new ideas, new energy and a new focus on driving progress. Indonesia has a new
 president and a new cabinet with high hopes placed in them by the public. The 2014
 GlobeAsia Power 50 list reflects this changing political landscape and identifies those
 individuals who will have a say in the country’s direction over the next 12 months.
(Investor Daily Photo/David Gitarosa)

It took President Joko Widodo less than a month in office to make his first major decision.

By cutting fuel subsidies by more than 30%, the president not only freed billions of dollars for infrastructure development and other essential government spending, he sent out a strong message that he has the courage to take unpopular but vital decisions that are in the best interest of the nation.

Fresh from his return from China where he met with Asia-Pacific leaders such as US President Barrack Obama and Chinese premier Xi Jinpeng and the G-20 summit in Australia, the president moved swiftly on the domestic front. The fuel price hike was widely expected but not guaranteed and the president himself made the announcement, rather than delegating it to one of his ministers.

A few days later, he inaugurated Basuki Tjahaja Purnama as the governor of Jakarta despite heavy opposition from the Jakarta City Council and politicians from the Greater Indonesia Movement (Gerindra). Not an easy start for the new president.

President Joko Widodo’s rise to the apex of Indonesia’s political structure has been nothing short of spectacular. Born in a river shantytown in Solo, Central Java, Jokowi, as he is widely known, is the first businessman to become president of Indonesia.

Vice President Jusuf Kalla also comes from an entrepreneurial background, which explains the fact that there are nine former chief executives in the new cabinet.

Jokowi’s rise will, over a period of time, alter the face of Indonesian politics and in the process also change the faces that appear on the GlobeAsia Power 50 list. Over the past five years, the list has been dominated by politicians close to former President Susilo Bambang Yudhoyono.

While the 2014 Power 50 list still features some old-timers such as Megawati Sukarnoputri, Aburizal Bakrie and Amien Rais, a host of new names now appears on the list. Apart from Jokowi, the list includes Sofyan Djalil, the new chief economics minister; Bambang Brodjonegoro, the Minister of Finance; Rini Soemarno, the Minister of State-Owned Enterprises; Tjahjo Kumolo, Minister of Home Affairs; Anies Baswedan at Basic Education and Culture and Susi Pudjiastuti as Minister for Maritime and Fisheries.

Other newcomers to the list include Pratikno, the former rector of Gajah Mada University (UGM) and a supporter of Joko Widodo throughout his presidential bid. He will now play a substantial role in formulating the new administration’s policies, setting targets and re-organizing government structures as the State Secretary.

It remains to be seen if these new faces will be on the 2015 Power 50 List as they face significant challenges in the coming months.  There is no doubt however that a shift in the country’s political constellation is underway and will likely accelerate in the coming years as the old actors fade into the background.

The new government has its work cut out. The president has outlined his economic agenda, which is premised on improving maritime infrastructure and providing better public services. This was clearly laid out by during his recent foreign trips.

“The first and foremost would be how to reduce inequality and at the same time reduce poverty,” Finance Minister Bambang Brodjonegoro told Bloomberg in Brisbane recently. “We believe by doing infrastructure development we not only create growth but also create better equality,” he added.

Boosting growth

Such balancing acts will become commonplace for the new government and administration. According to former tourism minister Mari Elka Pangestu, raising fuel prices is only a small part of what the new government needs to do to achieve optimal balance between spending and revenue generation; and between empowering local businesses and remaining open to foreign investments.

“The demographic bonus and urbanization will drive growth over the next few years with 90 million more people living in cities,” she noted. “Destructive technologies will provide new sectors of growth worth around $625 billion in value.”

The key to sustainable growth will be improving connectivity and increasing power supply. This is where new Energy and Mineral Resources Minister Sudirman Said and Indroyono Soesilo, the Coordinating Minister for Maritime Affairs will play key roles. The government has plans to allow 100% foreign ownership of power plants over 100 MW and removing PLN’s monopoly over power transmission.

The ministry of Energy and Mineral Resources is also said to be ready to set up a one-stop shop for the power sector so private investors can get all their paper work done quickly.

An efficient and effective government, starting from the very top, is crucial to the country’s economic progress. President Jokowi will have to lead by example, rolling up his sleeves and going down to the ground. His ministers are already following in his footsteps, conducting “blusukan” or announced visits to their staff.

“Jokowi’s strength is that he can act as a manager and share power with his subordinates,” said Indria Samego a professor from the Indonesia Institute of Sciences (LIPI).

The rise of the middle class

While the Power 50 list is dominated by politicians and government leaders, it also has a healthy sprinkling of business leaders. This is primarily because private business owners and entrepreneurs are going to play an increasing role in determining the economic direction of the nation.

With growing consumption, big business owners such as Anthoni Salim from the Salim Group, Chairul Tanjung from Trans Corp and Budi Hartono from Djarum Group will define consumption trends. How they direct investments and create new products will ensure that Indonesia’s industrial base remains competitive and that the country can compete on the global stage.

The Power 50 List 2014

1 Joko Widodo – President of Indonesia.

2 Megawati Soekarnoputri – Indonesian Democratic Party of Struggle (PDIP) chairwoman.

3 Jusuf Kalla – Vice President of Indonesia and former Golkar party chairman.

4 Aburizal Bakrie – Golkar party chairman.

5 Zulkifli Hasan – The speaker of the People’s Consultative Assembly.

6 Susilo Bambang Yudhoyono – Head of Democratic Party and former president.

7 Hatta Rajasa – Head of the National Awakening Party (PAN).

8 Amien Rais – Former speaker of the People’s Consultative Assembly, or MPR.

9 Prabowo Subianto – Head of Gerindra party.

10 Setya Novanto – The speaker of the House of Representatives (DPR).

11 Surya Paloh – Nasdem Party leader.

12 Pratikno – State Secretary.

13 Hamdan Zoelva – Head of Constitutional Court, or MK.

14 BJ Habibie – Former President.

15 Sofjan Djalil – Coordinating Minister for the economy.

16 Puan Maharani – Coordinating Minister for Welfare, Megawati’s daughter.

17 Irman Gusman – The Regional Representative Council (DPD) speaker.

18 Harry Azhar Aziz – Head of the Supreme Audit Agency (BPK).

19 Luhut Panjaitan – Jokowi’s senior adviser.

20 Bambang Brodjonegoro – Finance Minister.

21 Yasona Hamongan Laoly. Minister of law and Human Rights.

22 Rini M Sumarno – State Owned Enterprise Minister.

23 Sofjan Wanandi – Former Apindo Chairman.

24 Tjahjo Kumolo – Home Affairs Minister.

25 Chairul Tanjung – Founder CT Corp, former Coordinating Minister for the economy.

26 Retno Marsudi – Foreign Minister.

27 Andi Wijajyanto – Cabinet Secretary.

28 Sudirman Said – Energy and Mineral Resources Minister.

29 KH Mustofa Bisri – NU leader

30 Dien Syamsuddin – Muhammadiyah leader

31 Tedjo Edy Purdjianto – Coordinating Minister for Political and Security Affairs

32 Andrinof Chaniago – National Development Planning Chief.

33 Indroyono Soesilo – Coordinating Minister for Maritime Affairs.

34 Sutarman – National Police Chief.

35 Abraham Samad – Corruption Eradication Commission (KPK) chairman.

36 Wiranto – Hanura party leader.

37 Ryamizard Ryacudu – Defense Minister.

38 Rachmat Gobel – Trade Minister.

39 Saleh Husin – Industry Minister.

40 Suryo Bambang Sulisto – The Indonesian Chambers of Commerce and Industry (Kadin) Chairman

41 Hamengkubuwono – Sultan and governor of Yogjakarta

42 M Reza – Oil trader

43 Anies Baswedan – Education and Culture Minister

44 Nila F Moeloek – Health Minister

45 Susi Pudjiastuti – Maritime and Fisheries Minister

46 Budi Hartono – Djarum Group

47 Anthoni Salim – Salim Group

48 Franky Wijaya – Sinar Mas

49 Tommy Winata – Artha Graha Group

50 Basuki Tjahaya Purnama – Jakarta Governor

The story was first published on Globe Asia’s December 2014 edition.