Indonesia to Be Eighth-Largest AIIB Shareholder With $672 Million Stake

Jakarta Globe, Gayatri Suroyo & Fransiska Nangoy, Jun 28, 2015

Finance Minister Bambang Brodjonegoro, second left, is heading to Beijing on
 Monday to represent Indonesia as a founding member of AIIB. (Antara
Foto/Akbar Nugroho Gumay)

Jakarta. Indonesia will sign up as a founding member of the China-backed Asian Infrastructure Investment Bank, or AIIB, with an investment of $672.1 million paid over five years, the Finance Ministry said in a statement on Sunday.

Indonesia will be the eighth-largest shareholder in the AIIB, the statement said, without detailing what percentage its share would represent. Finance Minister Bambang Brodjonegoro is scheduled to travel to Beijing to sign the agreement on Monday.

The AIIB will begin with authorized capital of $50 billion, eventually to be raised to $100 billion.

Reuters

Uber Is ‘Stealing Money’ Through Unregulated Operations, Basuki Says

Jakarta Globe, Deti Mega Purnamasari, Jun 26, 2015

Uber is not welcome in Jakarta unless it sets up a proper office in the country and

 abides by prevailing public transportation regulations, the governor say. (Reuters

Photo/Charles Platiau)

Jakarta. Jakarta Governor Basuki Tjahaja Purnama said he would have a meeting with representatives from California-based ride-sharing app Uber only if the company promised to set up an office in the country.

“If they had wanted to meet me [to seek permission] from the beginning, then I would have done it. But now, if they wish to have a meeting with me, they must establish a company [here],” Basuki said at City Hall on Friday.

He added that representatives from the parent company, Uber Technologies, had spoken to him in person inquiring why they were banned from operating in the city.

Uber’s Jakarta operations currently run from a rented office space at the Pacific Place mall in the Sudirman Central Business District, South Jakarta.

Basuki claimed that Uber reaped profits of up to 20 percent from its operations in the city but did not pay any tax.

“They are stealing money in my area,” he said.

Shortly after its launch in Jakarta last August, Basuki branded Uber “illegal.”

Last week, the Jakarta Police arrested five drivers using the Uber app after receiving reports from the city’s transportation agency and the Organization of Land Transport Operators, or Organda.

The police said the five drivers would only be questioned as witnesses not as suspects.

The arrests mark the latest in a series of legal and regulatory speedbumps for Uber Technologies, which is already facing multiple lawsuits around the globe for bypassing industry regulations.

Suspended Riau Governor Gets Six Years in Bribery Case

Jakarta Globe, Jun 24, 2015

Annas Maamun, the suspended governor of Riau province in Sumatra, was
sentenced to six years in jail on Wednesday for issuing permits to a businessman
 to clear 140 hectares of protected forest. (Antara Photo/Agus Bebeng)

Jakarta. The Bandung Anticorruption Court has sentenced the suspended governor of Sumatra’s Riau province, Annas Maamun, to six years in prison for taking bribes to issue forestry concessions to a local businessman.

The court on Wednesday also fined Annas Rp 200 million ($15,040) after finding him guilty of taking a Rp 2 billion bribe for the permits to clear 140 hectares of ostensibly protected forest in the province. The sentence was the same as that sought by prosecutors from the Corruption Eradication Commission (KPK), although the fine was less than the Rp 250 million demanded by the KPK.

Gulat Medali Emas Manurung, the businessman said to have paid the bribe, has been charged in the same case.

The pair were busted red-handed transacting the bribe at a house in East Jakarta last September by the KPK.

Government Plans to Cut KUR Interest Rate to 12 Percent

Jakarta Globe, Arientha Primanita, Jun 18, 2015

The government has focused on local small businesses to boost employment.
(JG Photo/ Yudhi Sukma Wijaya)

Jakarta. Small businesses that take out a micro loans, or KUR, will be offered a subsidy that will effectively mean interest rates will be cut to 12 percent, a minister announced Wednesday.

Sofyan Djalil, coordinating minister for the economy, said during a limited cabinet meeting led by President Joko Widodo on Wednesday that the government sees the current KUR interest rate — 22 percent — as far too high.

“The government will give a subsidy … so that KUR can only be given 12 percent interest and the gap will be subsidized,” he said.

The plan will be implemented later this year, with the subsidy funds to be drawn from money saved by the cut to fuel subsidies earlier this year.

AA Gede Ngurah Puspayoga, Minister of cooperatives and small and medium enterprises, said the new rate would start in July.

“We are waiting on the technical regulations at the Ministry of Finance,” he said.

In the 2015 State Budget the government allocated Rp 30 trillion ($2.2 billion) for KUR with state-controlled Bank Rakyat Indonesia assigned to distribute them.

The government is focusing on small businesses as a means to boost employment and eradicate poverty.

GlobeASia

Jokowi, in Rare Tirade, Threatens to Fire Officials Over Cargo Delays at Tanjung Priok

Jakarta Globe, Jun 17, 2015

President Joko Widodo telling officials and reporters what’s what, during a visit to
 Jakarta’s Tanjung Priok Port on Wednesday. The president threatened to fire
 officials responsible for the notorious delays in moving cargo through the port.
(Antara Photo/Widodo S. Jusuf)

Jakarta. President Joko Widodo gave an uncharacteristic outburst during an inspection of Jakarta’s Tanjung Priok Port on Wednesday, threatening to fire officials responsible for the lengthy delays in moving containers through the port.

“The process takes too long because the people handling it don’t want to move fast,” he told an entourage of officials and reporters.

He noted that Tanjung Priok’s dwell time, or the amount of time a container spends at the port before moving on, was an average of 5.5 days – the longest in Asia, he said. He also said some items took up to a month to clear customs and excise.

Joko added he was well aware of the legendary delays at the port, which handles two-thirds of Indonesia’s international trade, from his experience running a furniture export business, and threatened to fire any officials responsible for the problem.

“Let it be known that if things get [even more] difficult, I can fire the director general, the people on the ground, even the minister. If that’s how you work that’s [what will happen],” he said.

He did not specify which director general or minister he was referring to. The director general of customs and excise is Agung Kuswandono, whose office falls under the purview of the Finance Ministry, headed by Bambang Brodjonegoro. The trade and transportation ministries, which also have a hand in operations at the port, are headed respectively by Rachmat Gobel and Jonan Ignasius.

Joko said it was apparent that no one involved in the process – from loading and unloading containers to clearing them through customs – understood their duties or responsibilities, and chastised the officials around him for glossing over the problems.

“Don’t say everything’s fine. The reality is that [Indonesia] is lagging far behind. So who? Customs or trade? Who should I be speaking to?” he said, repeating the question seven more times.

There was no response from any of the officials.

“Which agency takes the longest time [processing] exports and imports?” the president went on. “There’s gotta be one. So I’m asking again, which one? Fess up, and we’ll fix it.”

Again there was no response.

Joko said the average dwell time at Tanjung Priok should be brought down to 4.7 days if Indonesia was to be competitive with Singapore and Malaysia.

“I want this port to be faster, more efficient, to give the best import and export services, because our business is the service business,” he said.

SBY Speaks Out Against Pork Barrel Scheme as Jokowi Stays Silent

Jakarta Globe, June 16, 2015

Former president Susilo Bambang Yudhoyono has come down hard on renewed
 talk by the House of Representatives to secure pork-barrel funds. (Antara Photo/
Yudhi Mahatma)

Jakarta. A bid by Indonesian politicians to channel Rp 20 billion ($1.5 million) in pork-barrel funds to every national legislator has met its most powerful detractor yet in former president Susilo Bambang Yudhoyono, even as his successor remains silent on the hugely controversial issue.

In a series of Twitter messages on Monday, Yudhoyono laid out his arguments against such a scheme and reminded the public that he had opposed a similar attempt by the House of Representatives during his own presidency.

He acknowledged that while the intention of the so-called “aspiration fund” was to boost regional development, the proposed mechanism went against the prevailing system for allocating development funds.

“If members of the House have the ‘allocation and authority’ to determine projects and funding on their own, what’s the difference between the executive and legislative [branches of government]?” Yudhoyono asked in a tweet carrying the *SBY* tag that indicates it was written by the former president and not one of his aides.

He also questioned how the House members would be held to account for the money, and how the public could be sure that it was not being held by the legislators.

Another argument against the scheme, Yudhoyono said, was the role of regional councilors with a better understanding than the House members of local issues.

“If every House member is to get aspirational funds, what about provincial, district and municipal councilors who are considered to know more about and be closer to the constituency?” he wrote.

“How complicated is development planning going to be when everyone has their own wants and plans?

“During the administration that I led, I rejected the use of such aspiration funds because of these [questions] that remain unclear,” he added.

Di era pemerintahan yg saya pimpin, saya tidak setuju penggunaan dana aspirasi tsb karena ke 5 hal itu belum jelas & belum klop. *SBY*

— S. B. Yudhoyono (@SBYudhoyono) 15 juni 2015

“I urge the House and the government to be diligent and not hasty in reaching a decision. Don’t make a mistake and ruin the system,” he concluded.

“Shouldn’t the focus and priority of the House and the government at this time be on addressing the economic slowdown and its impact on the lives of the people?”

Yudhoyono’s unequivocal opposition to the scheme comes in stark contrast to the lack of response from his successor, President Joko Widodo, on an issue that has garnered widespread public opposition. Cabinet Secretary Andi Widjajanto, a close aide to the president, said Joko would likely comment on it once the House had fleshed out its plan.

Legislators are pushing the government to include Rp 11.2 trillion in pork-barrel funds, which they are calling the “Electoral Region Development Fund” or UP2DP, in next year’s state budget.

The proposed fund is to be distributed among all 560 House members and used for any development project of their choosing in their respective electoral districts. A House team working on the details of the plan says there will be “no special supervision” of the use of the funds.

Critics have rounded on the plan, calling it unconstitutional and prone to misuse.

The National Democrat Party (NasDem), which is part of Joko’s ruling coalition, said its legislators would oppose any bid by the House to push the plan through. However, Joko’s own Indonesian Democratic Party of Struggle (PDI-P), says such a scheme is necessary to bypass the tangle of bureaucracy that typically holds up the distribution of regional development funds from the central government.

World Bank Urges Better Resource Management in Indonesia

Indonesia loses $4 billion from its rain forests to illegal logging.

Jakarta Globe, Vanesha Manuturi, Jun 10, 2015

Farming is seen in the protected areas of the Kerinci National Park (TNKS),
in Kerinci, Jambi, in May. (Antara Photo/Wahdi Septiawan)

Jakarta. The World Bank has pressed Indonesia to improve resource management and governance as the country works towards more sustainable and environmentally-friendly economic growth over the next five years.

“Indonesia has enjoyed tremendous growth … but not all are benefiting from these achievements and they come with a high price of environmental degradation,” said Sri Mulyani Indrawati, managing director and chief operating officer at the World Bank, on the first day of the Indonesia Green Infrastructure Summit 2015 in Jakarta on Tuesday.

She pointed to Indonesia’s forestry industry as an example of the country’s murky governance track record.

“Every year, Indonesia loses some $4 billion through illegal logging. Meanwhile, revenue from forestry licensing amounts to only $300 million per year,” she said. “This is a problem of governance, manifested in poor performance that impacts the implementation of existing regulations or design of better laws.”

Sri Mulyani — who was a former finance minister in the Susilo Bambang Yudhoyono’s administration before resigning in 2010 — also noted “an information gap” among government agencies in Indonesia, which has led to a lack of transparency and efficiency in resource management.

“The energy sector, for example, needs more and better data on simple energy use and emissions,” she said.

Still, the World Bank managing director praised the government’s moratorium on new fishing permits for large operations as an “encouraging development.”

“A well-managed ‘blue’ economy can ensure food security, promote sustainable tourism and build resilience. But degradation through overfishing and dumped waste exacerbates poverty and undermines food security globally,” she said.

Improving governance of the fisheries sector coupled with large-scale investment in maritime transport and trade infrastructure could double fish production in the next five years, according to Sri.

During the same summit, Vice President Jusuf Kalla admitted the government’s stance to maintaining a sustainable economic growth has been lackluster.

“We’ve always thought about environmental issues after we’re faced with problems,” Kalla said.

“We’ve learnt and we are now learning with economic principles that are sustainable so that we can pass down this country for the next generation.”

Under President Joko Widodo, the government wants to boost growth to 7 percent over the next five years, bolstered by greater investment — both by the government and the private sector — in infrastructure development.

Joko’s infrastructure vision for the country includes the development of new power plants with a total capacity of 35,000 megawatts and nine million hectares of agriculture land across the country.

In a bid to encourage more environmentally-friendly investments, Indonesia currently offers tax allowances to nine business areas relating to environmental preservation, including geothermal power, refining and natural gas processing industry, organic basic chemical industry, and clean water reservoir and purification industry.

In April, Environment and Forestry Minister Siti Nurbaya said that the ministry plans to offer more incentives — such as soft-loan facilities, business permit extensions and free import duties — to local and foreign investors with technology which reduces pollution and conserves energy.

GlobeAsia

Desperate for Tax Money, Indonesia Ready to Grant Criminals Amnesty

Jakarta Globe, Tabita Diela & Yosi Winosa,  Jun 05, 2015

An officer is seen serving tax payers at a tax office in Gambir in Jakarta
on April 2, 2015. (Antara Photo/Rosa Panggabean)

Jakarta. Indonesia plans to let corruptors, tax evaders, and forest and mining illegal poachers to put their money in government bonds, in a move that would reprieve criminals of their past crimes and provide government with additional revenue.

“We have reasons to study and throw this idea to the public. We have very limited data of Indonesians’ possessions and wealth abroad,” said Mekar Satria Utama, director of counseling, service and public relations with the director general of tax at the Finance Ministry on Friday.

“We heard there are 3,000 to 4,000 trillion rupiah [of Indonesians’ assets] in Singapore. That’s the potential,” Mekar said.

The tax directorate general said last week that the government is preparing a bill that will grant amnesty to criminals — except drugs offenders and terrorists — as long as they agree to bring in their ill-gotten money to Indonesia under the government’s terms and conditions. The government is targeting to complete the bill by October.

Mekar said the state plans to offer a remission for crimes such as corruption, money laundry, illegal logging and illegal mining.  Still, those offenders must pay bail of 10 percent to 15 percent of the value of their crime to the government. The offenders must shift some of their “investment portfolios and cash” into government bonds with maturities of five to 10 years, said Mekar.

The government had launched similiar tax remission programs in 1984 and 2004 but failed to attract any interests from offenders because they were not backed with a law that offered amnesty.

Tax experts see the government’s policy as a “paradox” and a “bad idea” as it would reduce taxpayers’ compliance in the future.

“It is such a controversy. It’s not fair for those who have been compliant [with the law]. When the policy is implemented, they will most likely become less obedient,” said Setyo Budiantoro, the director of Prakarsa, an economic policy research center.

Setyo encourages the government to engage more in country-to-country tax reporting and automatic information exchange.

“We need to improve taxpayer compliance first, then we deal with amnesty,” he said.

The government has waived penalties for five years on back taxes that tax payers must comply with by the end of this year, as part of efforts to boost revenue from taxes this year in order to fund ambitious development projects.

President Joko Widodo’s administration is targeting a tax-to-GDP ratio of 16 percent, up from 12 percent in 2013. Still, only 4 million Indonesians from the 250 million current population pay tax. Tax revenues — excluding revenue from customs — in the first quarter of 2015 reached Rp 198 trillion ($15 billion), compared to Rp 1,294 trillion for a full-year target.

GlobeAsia

Chief Detective Flip-Flops on Wealth Report, Now Says Will Comply

Jakarta Globe, Jun 02, 2015

Budi Waseso, center, the National Police’s chief of detectives, says he will, after all,
submit a mandatory wealth report to the KPK. (Antara Photo/Akbar Nugroho Gumay)

Jakarta. The Indonesian police’s chief of detectives, Comr. Gen. Budi Waseso, claims his previously quoted refusal to submit a wealth report to the country’s antigraft commission was taken out of context by the media.

Budi told reporters in Jakarta on Tuesday that he had every intention of filing the report with the Corruption Eradication Commission (KPK), but wanted a third party to compile it for reasons of transparency.

“I want to be honest and open. So if possible, I prefer not to be the one to compile the report,” he said as quoted by Tempo.

“Once the report is completed, I will definitely submit it. I never said I didn’t want to,” he added.

Budi was quoted by Kompas last Friday as saying that he would not report his wealth and instead challenged investigators from the KPK to “fill in the details.”

“Let the KPK team do the counting because self-reporting is a subjective mechanism that may differ from what the KPK will find at a later date,” he said at the time.

Activists from prominent anti-corruption organizations lambasted the three-star general for the statement, given that filing a wealth report is mandatory for all senior public officials, including in the police force.

Budi, though, claimed on Tuesday that he had been misquoted as part of a “smear campaign” by the media.

“My statement was flipped over in the media. I know which media it is and who the reporter is. There’s a specific message behind it. But it’s alright, I shouldn’t get upset by it,” he told Tempo.

Despite his claim, Budi has long made clear his hostility toward the KPK.

It was his office that instigated – in retaliation against the KPK’s naming of another police general, Budi Gunawan, a corruption suspect – a series of criminal investigations against KPK officials based on trumped-up charges, some of them dating back a decade.

Related Article:

Basuki to Fire Officials Who Fail to Submit Wealth Reports

Indonesia Proposes 50% Salary Hike for Migrant Maids in Malaysia

Jakarta Globe, May 31, 2015

Women training to be domestic workers abroad take part in an infant care exercise
at a training center in Semarang, Central Java. (JG Photo/Dhana Kencana)

Jakarta. The Indonesian government is proposing a 50 percent increase in the minimum wage for its citizens employed as domestic workers in Malaysia.

Hermono, the charge d’affaires at the Indonesian Embassy in Kuala Lumpur, said his office had submitted the proposal to the Malaysian government, where it will be discussed at an upcoming cabinet meeting.

The Indonesian government is seeking an increase of the monthly minimum wage from the current 800 ringgit ($219) to 1,200 ringgit.

“This is indeed our proposal. Malaysia has determined that it will be brought to a cabinet meeting. Now we are waiting for Malaysia’s response,” Hermono said as quoted by news portal Detik.com.

There are an estimated two million Indonesians in Malaysia, employed mostly as domestic workers or manual laborers.