VP calls for improvement of agriculture produce

Kendari (ANTARA News) - Vice President Jusuf Kalla has called on all elements of the public in Southeast Sulawesi province to increase their agricultural and plantation production in a bid to achieve greater welfare.

"Don`t live from regional election (Pilkada) activity but till the vast and fertile areas of land to step up agricultural and plantation produce so that our nation can be respected," Kalla said at an Idul Fitri gathereing here on Tuesday.

On the occasion the vice president was accompanied by Justice and Human Rights Minister Andi Matallata, Democrats Party chairman Hadi Utomo, Golkar Party Secretary General Soemarsono, Wirabuana military commander and a number of legislators.

Kalla also called on the Southeast Sulawesi provincial administration and the local people to keep up the production of the province`s main commodities such as cocoa, cashew, corn and teak.

"Show pictures of cashew, cocoa and teak instead of displaying pictures of governor and district head candidates at the street corners," Kalla said.

The vice president added that in the regional election, the people in the province should elect the new governor and district head who have the capability to improve agricultural and plantation produce such as cocoa, cashew, corn and teak.

He said all elements of the public in Southeast Sulawesi should not waste their time and energy to talk only about politics but to think about positive programs to improve the people`s welfare.

Kalla added that it would be illogical if any people in the province lived in poverty because the province had more promising natural resources than other rgions in the country.

Kala arrived in Kendari on an Idul Fitri tour which will also take him to Palu in Central Sulawesi, Gorontalo and Manado in North Sulawesi.

Meanwhile, Southeast Sulawesi Governor Ali Mazi said on the occasion the province was enjoying a conducive security situation and religious harmony, as well as provincial economic growth of 7.68 percent in 2006.

Govt easing procedures of doing business in densely-industrialized areas

Jakarta (ANTARA News) - The Indonesian government is trying to loosen six procedures for doing businesses in the country`s eight densely-industrialized regions to raise its investment privilege rating to 75th in 2008 from 135th in 2006, an official said.

"We will launch the project in eight densely-industrialized regions first," Head of the Investment Coordinating Board (BKPM) Mohammad Lufti said following a limited coordination meeting with Vice President Jusuf Kalla at the Office of the Administrative Reforms Minister here on Friday.

The meeting also agreed on the formation of a small team with Administrative Reforms Minister Taufiq Effendy as its chief and the BKPM chief Mohammad Lufti as executive chief to relax the procedures for doing businesses in the regions.

The eight regions are Jakarta, Banten, West Java, Central Java, East Java, Sumatra and Sulawesi.

The six procedures cover exports and imports, enforcing contracts, paying taxes, applying for building permits, and starting a business.

"Under the current circumstances, we will be able to improve our rating to 56th from 135th on condition that other countries do nothing to improve their investment privileges," Lufti said.

Under the present procedure, a foreign investor needed 97 days to start a business in the country and the government had been trying to reduce the period to 23 days, he said.

"God willing, a foreign investor can start doing business within 23 days," he said.

Both sides of Suramadu bridge set for SEZs

Ary Hermawan, The Jakarta Post, Jakarta

The government plans to set up special economic zones (SEZ) in the areas to be linked by the Surabaya-Madura bridge, with the zones expected to cover some 600 hectares in total.

The SEZs on both sides of the bridge will be established upon the completion of the bridge, which is scheduled for 2008, according to National Development Planning Minister Paskah Suzetta.

"The bridge must be turned into more than just a link between Surabaya and Madura. We must also improve economic conditions in the surrounding areas," Paskah said Wednesday.

Accordingly, Paskah said the government had decided to set up a special agency to speed up the bridge's construction, and to prepare blueprints for the development of the proposed economic zones.

"The agency will focus primarily on land acquisition and the construction of infrastructure, including ports and residential areas to support the zones," he said, adding that the new agency would be headed by Coordinating Minister for the Economy Boediono and include local government officials as members.

Subsequently, Paskah said, the government would invite private firms to submit bids to run the zones as part of a public-private partnership.

"All companies. foreign and domestic, will be invited to invest in and develop the zones," he said.

Better known by its Indonesian acronym as the Suramadu bridge, the new link, which is still under construction, will connect Surabaya on the island of Java and Bangkalan on the island of Madura. It will be the longest bridge in the country at 5.4 kilometers in length.

China has provided US$400 million for the project, while the government has allocated Rp 1.4 trillion (Rp 147.3 million) from the 2007 and 2008 budgets.

Batam, Bintan and Karimun islands in Riau Islands province made up the first SEZ in the country. It has been deemed a success by the government, which now plans to create similar zones in other provinces.

In addition to the proposed SEZs in East Java, the government has said it will establish other ones in North Sumatra, South Sulawesi and Bojonegara in Banten, where a Rp 7 trillion international port is under construction.

The Coordinating Ministry for the Economy is currently preparing a government regulation in lieu of law as a legal basis in the hope that this will save time and accelerate the establishment of more investment-boosting SEZs around the country.

Issues pertaining to the SEZs will also be covered by the proposed new taxation and customs laws.

Telkomsel to invest $1.5 billion this year to enhance network

The Jakarta Post, Jakarta

The country's largest mobile phone operator, PT Telkomsel, plans to expand its network by building 5,000 new Base Transceiver Stations (BTS) this year at a cost of about US$1.5 billion.

With the new stations, Telkomsel hopes to penetrate every subdistrict in Kalimantan and up to 70 percent of all subdistricts in Sulawesi, according to media statement released by the company over the weekend.

Telkomsel currently has 15,000 cellular stations throughout the country, with a third of them being installed in 2006.

With the number of cellular phone users expected to increase by 25 percent from 64 million last year to about 80 million this year, Telkomsel is optimistic it will be able to pick up between 7.5 and nine million new users, or half of all new subscribers in the country.

About 63 percent of the country's total population of 240 million is between the ages of 15 and 50, Telkomsel corporate communications manager Suryo Hadiyanto said.

"These people have an acute sense for technology and a great deal of enthusiasm for technological developments," he said, in explaining the growth of the cellular industry in the country.

According to Telkomsel, the country's cellular penetration now stands at just 25 percent of the total population. However, the penetration rate grew at an average of 67 percent per year from 2001 through 2006.

Telkomsel invested about $1.5 billion last year in expanding its network and added 10.6 million new users, giving the company a total of 34.9 million customers. Its net profit in 2006 as of September increased by 43 percent year-on-year, from Rp 14.59 trillion to Rp 20.92 trillion.

Telkomsel is one of three cellular operators in the country that introduced third generation, or 3G, services last year. So far it has 1.5 million 3G customers nationwide, with services available in 25 cities.

Excelcomindo (XL) had some 130,000 3G customers as of December, while Indosat, which just launched its 3G services in late November, has no precise customer numbers yet, but has targeted 320,000 subscribers by early 2007.

Govt to maximize 'local potentials' in building power plants

JAKARTA (Antara): The government will maximize the use of local resources in building coal-fired power plants outside Java currently in bidding process, a senior official at the Ministry of Energy and Mineral Resources said Tuesday.

"The local potentials include goods, manpower as well as funding," said the ministry's director general of electricity and energy utilization J Purwono.

"We will ask the contractors to use local resources including machineries, construction materials and manpower although the funding come from foreign sources, which usually are binding ones," he added.

Purwono pointed to the construction of a foreign-funded 7 megawatts (MW) coal-fired power plant which could use up to 30 percent of local content.

He also called local financial institutions to be proactive in funding power plant projects saying it could be a market for local lenders.

"Indonesian banks should also compete to finance power projects. Don't be passive," he said.

The government has announced on Dec. 19 a tender for the construction of 25 coal-fired power plants outside Java.

Four power plants will have the capacity of 100 to 200 MW to be built in Aceh, North Sumatra, West Sumatra and Lampung provinces.

Another four power plants with 50-65 MW of capacity slated for West Kalimantan, South Kalimantan, Central Kalimantan and South Sulawesi provinces.

There are also 17 plants with smaller capacities of 7 to 25 MW scattered nation wide in Bangka Belitung, Riau, Riau Islands, West Kalimantan, Maluku, North Maluku, Papua, East Nusa Tenggara,West Nusa Tenggara, Gorontalo, Southeast Sulawesi and North Sulawesi provinces.

These power plants are part of the government's plan to generate additional 10,000 MW of electricity by 2009.

As for Java island, the government has started bidding process for 10 power plants. Seven power plants will the capacity of 300 to 400 MW while the remaining three with 600 to 700 MW of capacity.

USAID to help agribusiness to tune of $13.75m

The Jakarta Post, Jakarta

The United States Agency for International Development (USAID) will provide aid worth US$13.75 million over three years in the form of equipment and technical assistance to help the government develop the agribusiness sector, it was announced Thursday.

The scheme, called the Agribusiness Market and Support Activities (AMARTA) program, will be implemented through USAID's main office in Jakarta, as well as its regional offices in Medan, Makassar and Denpasar, in partnership with the U.S.-based development consulting firm, Development Alternatives Inc.

"USAID has awarded a contract to Development Alternatives Inc., of the state of Maryland, to implement the AMARTA project. So, these funds will be disbursed via Development Alternatives Inc," David J. Anderson, chief of party of AMARTA, said Thursday during the launch of the program in Jakarta.

Each office will forge cooperation with the private sector, industry associations, the government, NGOs, chambers of commerce and industry and other stakeholders for the purpose of jointly developing the agribusiness sector in Indonesia, said David.

Under the program, eight sectors would be prioritized: cocoa, coffee, high-value horticultural products (fruit and vegetables), fishing, spices, biofuels and livestock.

"The ultimate goal is to improve productivity and the quality of products so as to ensure better market access," said William M. Frej, USAID's mission director.

Qualitywise, Indonesia's cocoa, for instance, is between 60 and 70 percent below international market standards.

"One of the aims of this project is to improve the quality of the cocoa exported to the U.S. so that we can secure incentive bonuses, rather than a 10 percent reduction from the normal price," said Syukur Iwantoro, head of the Agricultural Quarantine Unit at the Agriculture Ministry.

"After finishing our assessments, we will have identified the primary interventions for the program in collaboration with the stakeholders by the end of 2007," said Anderson.

In general, the AMARTA program will provide assistance such as training, capacity-building, consultation, promotion and facilitation in the agribusiness sector.

Madrasah Education Development Project

Asian Development Bank, November 2006

The Project supports the Government’s efforts to improve madrasah education so it meets national education standards, within the Government’s broader education policy and strategic framework. The Project will cover primary, junior, and senior secondary private and public madrasahs in 27 poor districts of Central Java, East Java, and South Sulawesi provinces.

The Project will benefit 120,000 students in 500 madrasahs.

The Project will support a mixture of demand- and supply-side interventions to enable project madrasahs to (i) improve teacher professionalism; (ii) upgrade teaching–learning resources and facilities; (ii) increase their internal efficiency; and (iii) strengthen their governance, management, and sustainability.

The Project will help madrasahs meet national education standards according to the needs identified in madrasah development plans, through a range of interventions, including teacher qualification upgrading and professional certification, provision of substitute teachers, and teaching skills development; upgrading or expansion of facilities (classrooms, libraries, and laboratories); and provision of teaching–learning materials. These interventions will be selected by individual madrasahs according to their development needs.

The Project will enhance the internal efficiency of project madrasahs by increasing enrollment, decreasing dropout and repetition rates, and increasing completion rates at all levels through remedial and scholarship programs, particularly for poor and female students.

Governance, management, and financial sustainability of project madrasahs will be improved through training and performance-based madrasah development planning and management, and advocacy programs to enhance the perception of madrasah education quality and encourage stakeholder participation to ensure better resource mobilization and transparency.

Read More : Madrasah Education Development Project (Indonesia) [PDF]

European Commission happy with Indonesian projects

The Jakarta Post, Jakarta

Juan Casla, the program manager for European Union-Indonesian economic cooperation, said Friday that the EU-Indonesia Small Projects Facility Program, which was initiated in 2003, has been so successful to date that several more projects were planned for 2007.

"We have received continuous responses for a number of proposals and an increase in approvals for projects, which is very good and in line with our hopes," he said during the wrap-up session on projects selected under the 2004 third call for proposals.

A total of nine projects worth 907,023 euros (about US$1.1 million) were completed in the fourth quarter of 2005. They included the University of Indonesia (UI)'s "Economic Impact Study on Counterfeiting in Indonesia"; an Indonesia-Netherlands Association (INA)'s program titled "Promotional Website and Management Support for Export Design Handicraft and Interior Decoration Products"; and the Indonesian-French Chambers of Commerce and Industry's program titled "Capacity-Building in Indonesian Water Utilities".

The projects covered areas such as investment and the business climate, export marketing and promotion, and infrastructural development.

The UI study received a positive response from the government, and resulted in the establishment of the National Intellectual Property Rights Task Force, and more frequent raids on counterfeit products by the National Police and the Food and Drug Surveillance Agency.

The INA's website for handicraft producers resulted in the total volume of exports to Europe in this sector rising to 400,000 euros, while the IFCCI's water management training, workshops and pilot projects in four local-government water utilities -- in Makasar, Banjarmasin, Manado and Palembang -- resulted in a reduction in water leakage

The EU-Indonesia Small Projects Facility Program has provided grants amounting to 5.77 million euros and has approved 40 projects over the course of three years.

Thirteen projects from the fourth and fifth calls for proposals worth 2.32 million euros are still underway.

Six more projects, valued at 845,233 euros, were approved this month and are ready to start in January 2007. In line with policy, these projects will also receive initial funding of 80 percent of the total amount allocated, with the rest being disbursed at the end of the projects.

Jean Breteche, the EU's Ambassador here, said that after the completion of the 19 projects, new proposals would be announced by the end of 2007.

He added, "These projects are not huge but they are very efficient and to the point in helping economic development in Indonesia."

S. Sulawesi's Bakaru hydropower plant's capacity to be raised to 191 MW

Makassar, South Sulawesi (ANTARA News) - The capacity of South Sulawesi`s Bakaru hydropower plant (PLTA) is soon to be increased to 191 MW with the installation of a new 65-MW turbine to be financed with a Japanese loan, a State Electricity Company (PT PLN) official said.

"The Japanese government has offered a loan of US$50 million (Rp450 billion) to the Indonesian government to fund the project," Herman Darnel Ibrahim, PT PLN director of transmission and distribution told the press here on Friday.

He said the Indonesian and Japanese governments were now holding negotiations on the project.

"We are still assessing several matters relating to the use of the Japanese loan," he added.

He said the power plant`s capacity needed to be expanded as it was the main source of electricity supply in the region meeting the needs of some 1.3 million people in South and West Sulawesi.

The power plant now had two turbines with a combined capacity of 126 MW.

Part of the Japanese loan would be used to finance the removal of sedimentation from the bottom of the hydropower plant`s water reservoir so that it could always contain enough water to keep the three turbines running.

The reservoir was now only holding some 700,000 cubic meters of water while it had been designed to contain six million cubic meters.

RI mulls new standards to curb sales of low-quality products

Andi Haswidi, The Jakarta Post, Jakarta

Responding to the complaints from the electronics industry about the mushrooming of potentially hazardous, low-quality goods, the government is currently preparing the launch of a quality standard to prevent such poor quality goods being sold.

"Indonesia has become a junkyard for electronics goods. There is a need to protect the industry from the overabundance of low-quality products that are mostly illegally imported so that the local industry can improve," the Industry Ministry's electronics director Abdul Wahid told The Jakarta Post on Monday.

"The ministry has taken steps with a view to introducing electronic products standardization. So far, the plan is going well," he added.

Abdul said that the ministry was currently studying the possibility of adopting the European categorization of hazardous electronic substances, known as the Restriction of Hazardous Substances (RoHS) directive, was first implemented in 2003.

"Many nations have implemented the RoHS. Indonesia should too, he said but admitted that no timeframe had been agreed as yet.

The RoHS sets out a constantly updated list of hazardous materials that should not be used in electronic and electrical equipment. Currently the list consists of 20 restricted materials, including mercury, cadmium, hexavalent chromium, poly brom and lead.

Many of the restricted materials listed on the RoHS can cause long-term brain damage, decreasing memory capability, kidney problems and liver problems.

Abdul also said it was planned to establish two standards laboratories, one in Bandung for consumer goods and the other in Surabaya for components standardization.

"The procurement of equipment for the laboratory has already been completed. We hope that the laboratory will be fully erected some time next year," he said

Low purchasing power has contributed greatly to the flourishing trade in low-quality products, which are mostly illegally imported from China.

According to an industry source, electronics goods illegally imported from China have taken nearly 40 percent of the domestic electronics market.

According to the ministry, Indonesian electronics manufacturers, which mostly still rely on imported raw materials, face strong competition not only at home but also overseas.

According to the ministry's data, Indonesia's exports of electronics goods are the lowest in Southeast Asia. In 2004, Indonesian electronics exports reached only US$7.9 million in 2004, while those of the Philippines were worth $24 million, Singapore $41 million and Malaysia $63.5 million.

The industry also suffers from high dependence on imports as around 50 percent of main raw materials are still being imported and around 60 percent of molds are manufactured outside the country.

In 2005, the country's electronic exports fell to $7.65 million from $7.9 million in 2004. While at home, the industry was only able to meet 36 percent of the total demand which reached about $2.4 billion in 2005, with the rest being fulfilled by imported products, mostly brought into the country illegally.

Abdul said that the ministry had already established a team to monitor the market with some of its members being deployed to Makassar, South Sulawesi and Surabaya.

"This month we will have a more up-to-date picture regarding the extent of illegally imported electronic goods in the market," he said.

Abdul said that after the assessment was complete, he would work with the Customs and Excise Office to identify the points where the illegal imports were entering the country.

Govt moves to help out debt-strapped water firms, initiates restructuring

The Jakarta Post, Jakarta

The Finance Ministry will restructure debt of close to Rp 4 trillion (around US$440 million) owed by 176 local-government water utilities so that they can focus more on improving their services.

The restructuring will mostly take the form of rescheduling of principal and interest payments, although a small part of the debt will also benefit from write-offs, said Herry Purnomo, the ministry's director general for the treasury.

The overall debt is made up of Rp 3.75 trillion, $940,000 and 300,000 deutsche marks.

"The debt originated from central government loans between 1971 and 2005," Herry said. The loans and interest reached a total of Rp 5.949 trillion by the end of September, with the utilities only managing to repay some 37 percent of the outstanding debt, or Rp 2.195 trillion.

The restructuring is expected to provide the utilities with breathing space and allow them to focus on improving their water supply capacities.

At present, the utilities are only able to supply water to 41 percent of the urban population, against a national target of 66 percent by 2009.

Ridwan Syahputra Musagani, chairman of Indonesian Water Utilities Association (Perpamsi), hailed the government's move, saying it would allow the companies to better manage their cash flows -- a plus factor as most of them are desperately trying to finding private investors as partners.

"There are actually investors, local and foreign, which have expressed interest in teaming up with local water utilities. But many are concerned about the huge debts they are laboring under.

"So, I think this will be good news for those investors," Ridwan said.

Currently, there are 318 water utilities throughout the country, with only 44 of them being deemed healthy. Some of the ailing water companies with the biggest debt burdens are found in major cities like Jakarta, Bandung, Palembang and Makassar.