Top US nuclear envoy arrives in Indonesia

therawstory.com, Saturday May 26, 2007

AFP

Top US nuclear envoy Christopher Hill arrived in Jakarta Saturday for four days of talks with Indonesian officials, an embassy spokesman said.

Hill was expected to meet Foreign Minister Hassan Wirajuda who has said he would be seeking a briefing from Hill on the progress of North Korea's nuclear disarmament.

The US envoy would be in Indonesia until Tuesday, US embassy spokesman Max Kwak told AFP.

"Hill will be meeting with government officials to talk about bilateral and global issues," said Kwak, adding that a formal agenda had not been finalised.

Hill is also US assistant secretary of state for East Asian and Pacific affairs.

Indonesia, which has diplomatic ties with North Korea, has been playing an active role in trying to find a peaceful solution to the Pyongyang stand-off.

The two Koreas, China, Japan, Russia and the United States are parties to the talks aimed at persuading Pyongyang to abandon its nuclear ambitions.

Last month, North Korea's deputy foreign minister visited Indonesia to brief top government officials on progress over its nuclear disarmament.

Indonesia says it plans to develop nuclear power as part of efforts to find alternative energy sources to address its growing needs.

The International Atomic Energy Agency has backed Indonesia's plans to build nuclear plants despite opposition from environmentalists.

BI warns 30 small banks of minimum capital deadline

Urip Hudiono, The Jakarta Post, Jakarta

The central bank has identified 30 banks that have capitalizations of less than the minimum requirement of Rp 80 billion (US$8.8 million), and has warned them to comply with the requirement by the end of September through capital injections or mergers with other banks.

Of the 30 banks, Bank Indonesia Deputy Governor Siti C. Fadjrijah said seven would be unable to fulfill the requirement at all, while nine others would face difficulties in doing so as they had yet to secure commitments from new investors or their owners to inject fresh capital.

Three other banks had received such commitments, while a remaining 11 banks would likely have no difficulty in meeting the deadline as they already had capitalizations of some Rp 70 billion.

BI will require all the banks to submit their latest business plans and strategies for satisfying the minimum capital requirement, Fadjrijah said. They would also be required to have made all the necessary arrangements for complying with the requirement -- including any merger plans -- by the end of September.

Fadjrijah warned that the central bank would impose sanctions on those banks that failed to satisfy the requirement by the deadline, on time, and said they could be forced to submit to takeovers by the country's major anchor banks.

"We could ask the anchor banks to take over all of them. If the plan for voluntary mergers among the smaller banks does not work out, then we will ask the anchor banks to step in," Fadjrijah was quoted by detik.com as saying Friday at a bankers' seminar in Bali.

As part of effort to consolidate the country's banking sector in line with the so-called Indonesian Banking Architecture (API) blueprint for the industry, BI is requiring all banks to have minimum capitalizations of Rp 80 billion by the end of this year, and Rp 100 billion by the beginning of 2010. It is also requiring investors planning to establish new banks to provide a minimum capital of Rp 3 trillion.

BI Deputy Governor Muliaman D. Hadad had earlier said that 37 banks had capitalizations of less than Rp 100 billion as of the end of March, compared to 44 at the end of March last year. Total industry capitalization as of end of March stood at Rp 195.67 trillion, compared to Rp 173.22 trillion at the end of March the previous year.

The central bank wants to reduce the number of banks from 130 at present to 70 financially sound banks by 2010.

According to BI's plan, the industry will consist of three international-standard banks with capitalizations of more than Rp 50 trillion, and five national banks with capitalizations of at least Rp 10 trillion, with the rest being regional, cooperative and rural savings banks with capitalizations of at least Rp 100 billion.

BI is also promoting the emergence of a number of so-called anchor banks to lead the consolidation process through a process of mergers and acquisitions. These will be banks with minimum capital adequacy ratios of 12 percent and net non-performing loans ratios of 5 percent.

SBY finds village life bit of a surprise

The Jakarta Post, Jakarta

Making an unannounced visit to a village in Bogor, West Java, on Sunday, President Susilo Bambang Yudhoyono was surprised by what he found: gasoline sold in bottles and a frayed national flag.

At Karang Tengah village in Sentul, Bogor, Yudhoyono got an intimate look at the daily lives of villagers, visiting a gasoline kiosk, a small stall selling snacks and other goods, and an elementary school.

During his visit to the gasoline kiosk owned by Rohman Husein, Yudhoyono said he was bewildered gasoline was sold in bottles and jerry cans and asked Rohman who his customers were.

Rohman said the gasoline was for motorcycle taxis and transportation vehicles belonging to locals, and he could sell the gas for Rp 300 more than the official price.

"Because the gas station is far from here," he said.

Yudhoyono then inspected one bottle of the gasoline and said he was looking for illicit materials mixed with the fuel.

"Don't mix the gasoline," Yudhoyono told Rohman, who said he did not mix his gas with kerosene, a common practice at some kiosks.

At another stall, Yudhoyono spent Rp 500,000 on snacks from Sumarni, before First Lady Kristiani Herawati handed out the snacks to a crowd of gathered children.

When visiting state elementary school Karang Tengah I, Yudhoyono told the principal, Andreas Wasio, to replace the frayed national flag raised at the school.

Andreas answered: "We deliberately put up an old flag so people will not steal it."

Yudhoyono then held a discussion with residents, during which he urged heads of local administrations to follow his example and spend time getting a first-hand look at how people are living.

Yudhoyono said only through such field trips would the officials fully grasp whether development programs had reached desired targets.

"All governors and regents should make field trips as frequently as possible so they can learn the actual conditions themselves," Yudhoyono said.

Earlier this month, during a meeting with governors and regents from the country's 33 provinces, Yudhoyono asked the local leaders to make regular field trips, on the condition the trips would not strain local budgets.

He called on the local heads to stay at government-owned lodges if necessary to cut costs.

After the discussion, Yudhoyono said he would send government staff to research residents' needs including health and agriculture.

"I know this village is in need of help.

"And for this visit I didn't inform the governor or regent beforehand ... because I want to know the true conditions."

Nuclear plant received coldly

Suherdjoko, The Jakarta Post, Salatiga

The government's plan to build a nuclear power plant was put under the microscope again as experts said the plan was criminal, would put thousands at risk and did not make any sense.

Philosophy lecturer Franz Magnis-Suseno SJ said the plan was criminal because it could cause a disaster of huge proportions.

"Why does such a risky power plant have to be built in Indonesia?" Franz said during a seminar focused on analyzing critically nuclear power plant construction in Indonesia.

"If it's being built on the north of Mount Muria in Jepara (Central Java), how will residents suffer when there's a nuclear disaster like Chernobyl?

"If this kind of disaster takes place in Muria, the nuclear radiation might reach Semarang.

"So I doubt residents can be persuaded by the government to take the risks," he said from the Salatiga-based seminar in Central Java.

President Susilo Bambang Yudhoyono last year announced plans to start building a nuclear power plant in 2010 to become operational by 2016.

The power plant would be the first of its kind to provide energy to the Indonesian public and industrial sectors.

It is expected to meet four percent of the total power demand in Java, Madura and Bali -- an energy demand expected to reach 175 terawatt hours (TWh) by 2015.

Nuclear energy was essential for the country's development given Indonesia would need an additional 1,500 to 2,000 megawatts (MW) annually after 2016, the government said.

However, Franz said he feared widespread corruption practices for most projects, including the government's.

He said lowering the quality of building materials was just one way the project would suffer corruption.

Franz asked the seminar to consider the busway road construction project as an example and said many roads in this project were already damaged because of corruption and poor building materials, just six months after operations had commenced.

"So nuclear power plant construction should not start until Indonesia successfully fights corruption," Franz said.

Coordinator of Working Group on Power Sector Restructuring Fabby Tumiwa said during his seminar presentation the government had conducted no social study on the plan and had not sought approval from the public.

"The big risk of a nuclear power plant is that it will get a lot of attention," he said.

Fabby referred to a document from the International Atomic Energy Agency and reminded the audience that, "nuclear energy poses special risks to the health safety of persons and to the environment: risks that must be carefully managed".

Unilever to sell environmentally sustainable tea

By Marcy Nicholson

NEW YORK (Reuters) - The company that produces Lipton tea, one of the world's biggest black tea buyers, aims to obtain all its tea from plantations deemed sustainable, a U.S.-based watchdog group said on Friday.

Announcing its first such agreement with a tea company, the Rainforest Alliance said Unilever, which owns such well-known brands as Lipton and PG Tips, will begin selling Rainforest Alliance certified tea.

"This decision will transform the tea industry which has been suffering for many years from oversupply and underperformance," Unilever Chief Executive Patrick Cescau said in a release.

Rainforest Alliance certification requires three levels of sustainability - worker welfare, farm management and environmental protection. The first certified tea will come from Kericho, Kenya, an estate expected to be certified within weeks, to be sold in European restaurants and to caterers in August.

Read More ....

BI Doubts household consumption growth to reach target

Jakarta (ANTARA News) - Senior Deputy Bank Indonesia (BI) Governor Miranda Goeltom has expressed doubt that the country`s household consumption growth in 2008 will reach the government-set target of 5.7-6.2 percent.

"In the past five years household consumption grew only 2.3-4 percent. Last year it expanded 4 percent. If it the target for next year is set at more than 5 percent, the government needs to explain where the sources of the growth will come from," she said after a meeting with the House of Representatives` budget committee here on Thursday.

"This does not mean that the target will not be achievable but we must make sure that the people`s purchasing power is fairly high and the inflation rate is fairly low," she said.

Bank Indonesia Governor Burhanudin Abdullah said at a meeting with the House`s Commission XI on finance, national development planning and non-bank financial institutions on Tuesday that the central bank had set the target of household consumption growth for this year at 4.2-5.2 percent.

He said the target was based on the people`s low purchasing power and the high unemployment rate.

"In our view, the people`s purchasing power is still limited as can be seen from the ratio of savings to gross domestic product which is tending to decline. The ratio of consumption credit to disposable income is fairly high, jumping to 37 percent from 22 percent previously," he said.

Bank Indonesia has projected the country`s economic growth for 2008 at 6.2-6.8 percent, or lower than the government`s economic growth forecast of 6.8-7.0 percent.

The central bank also has estimated investment growth in 2008 at 15-17 percent, or higher than the government`s projection of 14.5-18.2 percent.

OECD predicts double-digit growth for Chinese economy

Paris (ANTARA News/Asia Pulse) - The Chinese economy is expected to grow at above 10 per cent over the next two years, according to the Organization for Economic Cooperation and Development (OECD).

In an annual global survey, the Paris-based group, comprised of the world's top economies, said China's Gross Domestic product (GDP) would increase by 10.4 per cent in 2007 and 2008, with domestic demand set to keep expanding.

It added that the growth rate of the country's exports may decrease due to slower world demand and a stronger Renminbi over the next two years. However, increasing consumption capacity in rural areas and the revitalized real estate sector would rapidly expand domestic demand, the report said.

President calls for new technology to produce alternative energy sources

Bandung, West Java (ANTARA News) - President Susilo Bambang Yudhoyono has called on Indonesian engineers to create technology that can produce alternative energy sources affordable by the public.

"I hope Indonesian engineers can contribute to the creation of a technology that can develop competitive and affordable alternative energy sources for the people in the future," President Yudhoyono said when officially opening a national leadership meeting of the Indonesian Engineers' Association (PII) here on Thursday.

The head of state expressed confidence in PII for its potential and innovation to help solve major problems in the energy sector.

"I consider PII as having potentials and innovation capability which can help solve national problems, particularly those involving energy," he said.

The President said Indonesia had abundant human and natural resources which could produce alternative energy sources.

"If properly managed, I am sure, they (human and natural resources) can produce something that can improve the people`s welfare and prosperity," he said.

He also hoped that the country`s engineers could develop technology that was environment-friendly and promote the efficient use of energy.

Yudhoyono was optimistic that efficiency in energy usage could help increase economic growth and the people`s welfare.

It would also help reduce the nation`s dependence on imported energy and the use of non-renewable energy sources.

Jambi needs investment for textile industry

Jambi (ANTARA News) - Jambi province badly needs investors to construct its textile industry as partners for batik and songket (embroidered with bits of gold or silver thread) producers, an official said.

"The batik and songket makers have had difficulties in obtaining the materials like cloth, thread and dye which should be bought from other regions at a high cost," Mrs Hj. Azizah Daryati Uteng of the regional legislative assembly said here on Wednesday (May 23).

In addition, the majority of Jambi`s batik producers have difficulties in developing and marketing their products, she said, adding that batik and songket products from this province would develop if there is a textile or garment industry in the region.

Citing as an example, Azizah said that the batiks produced in Pekalongan and Yogyakarta as well as in West Java developped rapidly because of the availability of the raw materials in those regions.

According to her, the Jambi provincial administration would provide facilities for investors such as plots of land if they wish to make an investment in the province.

Batam hosts SMES Expo

Batam (ANTARA News) - Batam is slated to host the ASEAN Small and Medium Enterprise Expo and Seminar (ASEAN SMES) on July 4-8.

"All ASEAN nations will take part in the exhibition," Head of the local Chamber of Commerce and Trade Nada Faza Soraya said on Thursday.

She said the expo would be an opportunity to promote products of the small and medium scale businessmen in the region.

Besides, she added the expo would also aim to extend the market of the export and import products as well as boost the small and medium scale industry to develop products to meet the international standard.

She said the other goals of the expo were to improve the quality of both the product and service of the trade and industry as well as prepare them to face the ASEAN free trade era.

"The expo will also promote Batam as the MICE (meeting, incentive, conference and exhibition) in ASEAN region," she added.

The expo will, among others, exhibit handicrafts, furniture, textile and its product, food and beverage, leather-made products, agribusiness and agricultural products, household equipments and cosmetics.

President calls on people to save energy

Bandung, West Java (ANTARA News) - President Susilo Bambang Yudhoyono has called on the Indonesian people to save energy, including electricity, gas and oil.

"Energy saving should be carried out early on because the energy is not renewable. Besides, in few years to come, the energy problem will become a problem of the world`s nations ," President Yudhoyono said in remarks opening the national leadership meeting of the Indonesian Engineers` Association (PII) and the 55th anniversary of PII here on Thursday.

To enable the country to be self-reliant in energy, all people, children as well as adults, must save energy.

"We all must save energy, don`t waste energy. And starting at an early age, children must learn to save energy in whatever form," he said.

He said if the nation did not save energy from now, energy sources would run out in the future and it would force the country to depend on other countries for energy supplies.

"Therefore, we need innovative technology which can save energy and produce alternative energy," he said.

He also called on regional administrations to issue policies which could support energy efficiency.

The President especially asked PII to help create technology which would produce alternative or renewable energy sources.

Indonesia`s industries grow 5.83 pct in q1

Jakarta (ANTARA News/Asia Pulse) - Indonesia's industrial growth hit 5.83 per cent in the first quarter of 2007, compared to 2.83 per cent in the same period last year, Industry Minister Fahmi Idris announced in Jakarta on Wednesday.

He said the increase was still below the country's 5.97 per cent economic expansion, despite all industrial sectors, except textile and wood-based industries, reporting strong growth.

The food, beverage and tobacco industries rose 9.84 per cent, paper and printing product industries 12.47 per cent, fertilizer, chemical, rubber-based industries 7.05 per cent.

Govt to distribute up to Rp1.5 billion to 1,993 sub district in 2007

Jakarta (ANTARA News) - The government is to distribute Rp500 million to Rp1.5 billion in Direct Community Assistance (BLM) funds to every sub district in the country this year as part of its efforts to lower the poverty and unemployment rates, a spokesman said.

"This year, some 1.993 sub districts in 346 districts in 32 provinces will receive the financial assistance," Ayip Muflich, director general of public and rural community empowerment at the Home Affairs Ministry said here Monday.

He said reduction of the poverty and unemployment rates was provided for in the National Self-reliant Public Empowerment Program through the Sub District Development Program the funds for which were obtained from community self-help activities, the Regional State Budget, the National State Budget and donor organizations.

"The government`s target is to lower the poverty rate from 39.5 million people or 17.75 percent of 2006 data to 18.24 million people or 8.2 percent in 2009," he said.

The amounts of the funds allocation for the direct community assistance were determined based on the population figures recorded by the Central Bureau of Statistics (BPS) and the number of sub districts based on proposals from regional administrations.

"We hope in 2009 all sub districts can be covered so that all poverty pockets can be reached," he said.

The assistance funds would be handed directly to community groups in the sub districts concerned and it would be up to the local communities concerned on what development activities the money would be spent.

The development activities could be improvement of rural infrastructure, savings and lending activities among women, productive economic ventures, health and education services, Ayip said.

Indonesia, US eager to deepen trade and investment ties

Washington (ANTARA News) - The United States and Indonesia agreed Monday to launch working groups aimed at strengthening bilateral trade and investment relations, the Office of the U.S. Trade Representative said.

The accord was made at a meeting in Washington between U.S. Trade Representative Susan Schwab and Indonesia's Trade Minister Mari Pangestu, the USTR was quoted by Kyodo as saying in a statement.

The working groups will cover four areas of mutual interest -- intellectual property rights, agricultural and industrial goods, services, and investment, it said.

"I am pleased that the United States and Indonesia made additional progress in deepening our trade and investment relationship in our meetings this week," Schwab said.

She said both sides discussed how to advance the integration of the 10-member Association of Southeast Asian Nations and to help bring the Doha Round of multilateral trade liberalization talks under the World Trade Organization to a successful conclusion.

"Indonesia is the largest economy in Southeast Asia and a major exporter of both agricultural and manufactured goods, so it has a lot to gain from a successful Doha Round," Schwab said.

Indonesia is the United States' 31st-largest trading partner. Two-way trade totaled $16.5 billion in 2006, up 9.3 percent from the previous year and U.S. foreign direct investment in Indonesia was $9.9 billion in 2005, according to the latest available U.S. figures.

RI-China trade grows 18.6 percent yearly

Beijing (ANTARA News) - Indonesia`s trade with China has experienced positive growth with its value having increased at an annual average rate of 18.6 percent in the past five years (2001-2006), an Indonesian diplomat here said on Tuesday.

Mohammad Oemar, deputy chief of mission at the Indonesian Embassy in Beijing, said Indonesia`s primary exports to China so far were chemical substances, timber products, pulp and paper, rubber and fertilizers.

In the meantime, Indonesia`s imports from China included semi-finished iron and steel products, spareparts, machines, electronics, data processing machines and various kinds of fruit.

Oemar said currently China was the fifth biggest export destination for Indonesian goods and the third biggest source of Indonesia`s imports.

He said the volue of Indonesia-China trade reached US$19.6 billion in 2006.

"The volue of Indoniesian-Chinese trade increased three-fold from US$6.7 billion in 2001," Oemar said.

Though it had increased significantly, Indonesia-China trade only accounted for 1.17 percent of Beijing`s total trade value, he said.

He said for this reason, President Susilo Bambang Yudhoyono and his Chinese couterpart Hu Jiantao had agreed to increase bilateral trade to US$20 billion in 2008 and US$30 billion in 2010.

BI Revises 2008 Economic Growth

Monday, 21 May, 2007 | 15:56 WIB

TEMPO Interactive, Jakarta: Bank Indonesia (BI) has estimated that economic growth in 2008 will reach between 6.2 and 6.8 percent.

This is higher compared to the previous estimate of between 5.7 and 6.7 percent.

This optimism, according to BI Governor Burhanuddin Abdullah, is supported by Indonesia's macro economic condition achievements during the third first which have been continually increasing.

“Up until the second quarter, it is estimated that growth will reach 5.9 percent,” he said during a hearing with the House of Representatives (DPR) Finance and Banking Commission at the Parliament Complex, Jakarta, on Monday (21/5).

Burhanuddin went on to say that the optimism was also supported by private consumption which is increasing in line with the rise of the government's deficit to 1.5 percent from previously 0.9 percent.

The rise of this year's deficit is especially used for disaster handling and infrastructure rehabilitation.

So it is estimated that next year's investment will be more significant compared to this year, which is still low.

“We see that there is a change of growth prospect to be between 6.2 and 6.8 percent. This is in line with regulation implementation and investment realization in 2008,” said Burhanuddin.

According to him, the Rupiah exchange rate until the end of year was estimated to continue strengthening with lower fluctuations.

BI expects that the stability of the Rupiah will be more and more maintained.

Despite being optimistic about next year's economic growth, Burhanuddin said the central bank must continue sustaining the inflation assumption of five plus minus one percent.

“We predict that inflationary pressure will still be high,” he said.

SURYANI IKA SARI

Allianz sees big growth in RI, Asia-Pacific

Rita A. Widiadana, The Jakarta Post, Nusa Dua

Germany-based insurance and financial services provider Allianz Group sees its businesses in Asia-Pacific growing rapidly this year on the back of the region's robust economy, with China and India serving as the driving forces.

"Allianz Group has seen a strong performance in the Asia-Pacific region and worldwide," said Dr. Werner Zedelius, a member of the Board of Directors of Allianze SE, during his closing address to a meeting of the CEOs of Allianz offices in the Asia-Pacific countries Wednesday. The meeting was held in Nusa Dua, Bali.

The company's growth written premium (GWP) income in Asia increased about 70 percent. However, "even if we exclude China and India, growth is still very high at 24 percent," Zedelius said.

Worldwide, the group booked an operating profit of 10.386 billion euros in 2006 as compared to 8.003 billion euros in 2005, while 2006 net income amounted to 7.02 billion euros.

In the Asia-Pacific region, Allianz operates in 14 countries, including China, India, Singapore and Indonesia.

Bruce Bowers, Allianz's CEO Asia Pacific, said that the company had great belief in the region's potential. "We have been a long-time investor in the region and we believe and are very optimistic about economic conditions here."

Allianz Group first set up shop in Indonesia in 1981.

Eight years later, Allianz established PT Asuransi Allianz Utama as a general insurance provider. In l996, Allianz set up PT Asuransi Allianz Life Indonesia, which offers life and health insurance, savings and pension plans.

"As a whole, Allianz Life Indonesia has had an excellent year, and in the first quarter of 2007, our profit more than doubled compared to the same period last year," explained Jens Reisch, president director of PT Asuransi Allianz Life Indonesia.

As of the end of December 2006, Allianz Life had achieved GWP income of Rp 1.3 trillion with 360,000 policyholders. Currently, it has 80 agency offices in 44 cities and regions around the country, including Bali.

"We plan to open new offices in Banda Aceh and Ambon soon," Reisch said.

Meanwhile, PT Asuransi Allianz Utama Indonesia has 38,000 customers with GWP income of Rp 615 billion as of the end of 2006.

For Allianz Utama, the first quarter of 2007 was overshadowed by a number of natural disasters that resulted in a significant rise in claims.

"We have gone through hard times in this first quarter, such as the floods in Jakarta and other calamities," said Victor Sandjaja, president director of Allianz Utama.

"But we are now on the right track with our premiums target as our GWP increased by more than 5 percent during the first quarter compared to the same period last year, generating Rp 3 billion in profit before tax," Sandjaja said.

Makro Indonesia to refocus on core business amid retail boom

The Jakarta Post, Jakarta

Makro Indonesia, the local subsidiary of Netherlands-based wholesaler Steenkolen Handels Vereniging (SHV), is to refocus its business strategy in response to the rapid growth in the country's retail industry.

Makro president director Kuswanto Gunadi said Friday that the firm was determined to regain its position as a leading wholesaler after sluggish growth over the past year resulting from the rapid expansion of modern retail outlets around the country, coupled with the adverse effects of 2005's double round of fuel price hikes.

"Looking at the supply-chain side, we actually have a massive market out there. Consequently, Makro will now refocus on its core business -- that is, being a wholesaler," he said.

Wholesalers sell goods in bulk to trade customers -- including both traditional and modern retailers, catering firms, hotels, cafes and restaurants -- who then supply them to third parties or the end consumers. This contrast with the business of a retailer, which sells directly to the end consumer.

Makro's new focus was being supported by a capital injection from the shareholders amounting to 25 percent of the company's total assets, Kuswanto said, while declining to disclose the actual amount of the capital injection.

The additional funds, he said, had been used in part to settle overdue accounts with suppliers.

"Our sales also increased by 30 percent during the first quarter of this year, compared to the corresponding period last year, thanks to the funding injection," he said.

Commenting on Makro's move, ACNielsen Indonesia retail services director Yongky Surya Susilo said that fast-growing modern retailers "have forced Makro to reinforce and refocus its business as a wholesaler."

Indonesian Retailers Association statistics show that the more than 5,500 modern retail outlets currently operated by its 86 members will help the retail business grow by between 15 and 17 percent this year on sales of some Rp 50 trillion last year.

According to Kuswanto, Makro management's was also determined to upgrade the companies human capital through training.

"Makro now has a new, solid management team, consisting of six new directors, excluding me, who are now ready to put the business back on the right track again," he said.

Makro currently operates 19 outlets in 13 cities in Sumatra, Java, Kalimantan and Sulawesi.

The wholesaler is more than 80 percent owned by Netherlands-based SHV. The remaining shares are owned separately by businessman Teddy Rahmat, the World Bank's private-sector arm International Finance Corporation (IFC), and Thailand-based agribusiness giant Charoen Pokphand.

Indonesia needs better investment climate to meet growth target

Jakarta (ANTARA News) - Indonesia needed to improve its investment climate and reduce its reliance of commodity exports to achieve its forecast of 6.3 percent economic growth this year, analysts warned Wednesday.

Southeast Asia's largest economy grew six percent in the first quarter from a year earlier, down from 6.1 percent in the previous quarter.

The figure was however more than the 5.8 percent predicted by economists, and Indonesia's finance ministers predicted that the economy would regain momentum and hit its fastest-full year growth in more than a decade.

"The growth in the first quarter confirmed that Indonesia has fully recovered from 1997 financial crisis," said Boediono, coordinating minister for economy, who uses one name.

But Panda Radja Silalahi, an economist with CSIS, called for improved investment conditions to meet growth targets, with Indonesia struggling to overcome an international reputation for legal uncertainty, bureaucratic red tape and corruption.

"The growth of 6.0 in the first quarter is a good signal for Indonesian economic conditions in the future. But the government needs to strengten its commitment to improving the investment climate to enable them to reach 6.3 economic growth in 2007," Silalahi told AFP.

Juniman, economist with Bank International Indonesia, said first quarter growth was "largely in line with expectations."

"However, Indonesia cannot just rely on commodity exports. In order to maintain sustainable growth, the government needs to increase exports of value-added manufactured goods," said Juniman.

First quarter growth was aided mainly by robust exports which grew 8.9 percent year-on-year, the central bureau of statistics chief Rusman Heriawan said Tuesday. Imports were also up 8.4 percent.

Indonesians were also spending more with household consumption rising 4.5 percent year-on-year while government consumption grew 4.3 percent, he said.

"Household consumption growth was not that outstanding because it came from a very low base in the first quarter of 2006 when the economy was hit by the impact of a fuel price hike," Heriawan said.

Indonesia was hit by a 126 percent fuel price rise in October 2005.

Gross Domestic Product was up five percent year-on-year in the first quarter of last year, he said.

Indonesian President Susilo Bambang Yudhoyono said this month that he expected the economy to grow six percent or more this year, boosted by falling interest rates and a steady export of commodities.

Yudhoyono predicted it would be enough to help ease poverty, which is chronic in many areas, and unemployment, running at 9.7 percent.

Finance Minister Sri Mulyani Indrawati has said growth was targeted at 6.3 percent this year, which would be the highest since 1996, when the economy expanded 7.8 percent.

Indonesia to introduce national standards for agricultural products

Jakarta (ANTARA News) - The government will issue a regulation requiring agricultural commodities to meet a national standard (SNI) for agricultural commodities to prevent entry of low-quality imported products into the country, an Agriculture Ministry official said here on Tuesday.

The director general of agricultural product marketing and processing, Djoko Said Damardjati, said many low-quality imported agricultural products had so far been sold in the country at a low price thus damaging the price of domestic produce.

"Our country has so far been like a waste dump. Low-quality or even reject imported products have entered the country freely," he said.

The situation was like that because no rule had been made to require compliance with standards for the products, he said.

He said the SNI meanwhile was already being applied to imported industrial products.

Djoko said the application of the SNI to imported agricultural products would be done in stages starting with garlic this year whose import reached 90 percent.

"With the application of SNI, the quality of imported products sold in the country will be good while its price will also be higher," he said.

He said other products to be affected by the SNI regulation next year would be cocoa and apples.

To meet the implementation of the SNI he hoped farmers in the country would strive to improve the quality of their produce so that they could compete in the market.

He said the SNI regulation would also be apllied to domestic produce. Therefore, he called on farmers to start implementing good agriculture practices to improve the quality of their produce.

Swedish businesspeople wish to invest in Aceh

Banda Aceh (ANTARA News) - Swedish businesspeople grouped in the Swedish Trade Council have expressed interest in investment in Aceh province, Aceh-Nias Reconstruction and Rehabilitation Board (BRR) spokesman Mirza Kemala said here on Tuesday.

He said the Swedish businessmen expressed their interest to BRR chief Kuntoro Mangkusubroto during a visit to Sweden over the weekend.

While in Sweden, Kuntoro Mangkusubroto met with deputy head of the Asia Department at the Swedish International Development Agency (SIDA) Anne Hoglund.

Kuntoro also met with a number of Swedish officials to express gratitude on behalf of the Aceh people and Indonesian government for the Swedish government`s involvement in the Aceh reconstruction process in the wake of the devastating tsunami on December 26, 2004.

Mirza Kemala said that in the meeting with SIDA, the Swedish businesspeople asked a lot of questions about the latest developments in Aceh.

"They would like to know more about security assurance and the possible impact of the Muslim Syariah law on their business later in Aceh," Mirza said.

He added that SIDA also expressed delight over the significant progress of the reconstruction process in the province.

Sweden was one of the European countries which donated about US$42 million for the Aceh and Nias reconstruction program.

Indonesia Becomes Main Recipient of Australian Aid

By Shar Adams, Epoch Times Australia Staff

May 14, 2007

Children play on a busy street next to their parents' hut in Jakarta. Australia's aid to Indonesia is increasing from $328 million to nearly $460 million in the coming financial year.

The Federal Government's decision to select Indonesia over Papua New Guinea (PNG) as the number one recipient of Australian aid does not reflect a downgrade of Australia's relationship with PNG says Asia Pacific observer Dr George Quinn.

It is instead a positive message to South-East Asian countries that the Australian Government recognises the enormity of problems faced by the region, Dr Quinn said.

Australia's aid to Indonesia will jump from $328 million to nearly $460 million in the coming financial year, putting Indonesia ahead of PNG for the first time.

Annual aid funding for the Philippines was also up from $30 million to $100 million but PNG's aid only lifted $10 million, albeit to $355 million, over the next financial year.

Foreign affairs Minister Alexander Downer said the increase in aid to Indonesia was partly in response to the tsunami which hit Aceh two years ago and partly due to the sheer weight of population numbers in Indonesia.

"Remember Indonesia is a vast country of more than 200 million people. Papua New Guinea of course is a fraction the size in population terms of Indonesia," he told Australian broadcaster ABC. "So, you know, I think it's inevitable that over time Indonesia is going to become a bigger recipient of Australian aid, and that's happened." Dr Quinn, a specialist in South-East Asia at the Australian National University, said in terms of per capita expenditure, Indonesia was still way behind other countries in the Pacific, and the increase in aid was a move he hoped would be repeated.

Relegating Indonesia to top aid recipient, however, was not a slant on the Australia Pacific relationship, he said.

"This is not a reduction in aid to Papua New Guinea and Pacific countries, it's a very small upping of the Indonesian budget" Dr Quinn told The Epoch Times, "I don't think there is any reason for the countries of the Pacific to think that Australia is losing interest in them."

However, relationships between Australia and Pacific nations have cooled in recent years with the Australian Government increasingly concerned about where and how its aid dollars are spent.

Mr Downer has said that corruption, poor governance and a lack of leadership are issues that need to be addressed if Pacific nations want to maintain high levels of funding from Australia.

"Real progress in essential economic and governance reforms will be recognised through performance incentives," Mr Downer said in a Budget media release.

While Papua New Guinea's Health Minister, Sir Peter Barter, thanked Australia for its aid, he lashed out at Mr Downer's negative appraisal of the PNG Government.

"The Australian Government needs to consider carefully how it evaluates other countries," Mr Barter told PNG's Post Courier. "I predict that Indonesia will react far more negatively if Mr Downer imposes his paternalistic and negative assessments on it. There will be suspicion of strings attached."

Dr Quinn said that while Australia's relationship with Indonesia had and will continue to "rollercoaster" because the countries were "so very different", the Australian Government had invested considerable resources over the years in building up expertise within Australia on Indonesia.

The Australian Government had not shown the same interest or sensitivity in regard to the Pacific nations, Dr Quinn said, resulting in an unnecessary cooling of relations.

"It is true to say Australia could be a shade more sensitive in the way it deals with countries of the Pacific," he said. "We don't have, in universities and in the training of diplomats, a really comprehensive programme to alert diplomats and aid workers and government officers to the niceties of the culture and the languages of the Pacific".

Saudi bizmen ready to help RI small enterprises

Jakarta (ANTARA) - Saudi businesspeople through Foras Investment Co have expressed readiness to help Indonesian small- and medium-scale enterprises (SMEs), especially those facing capital difficulties, a businessman said.

"Saudi businesspeople are ready to help Indonesian SMEs especially those engaged in plantations, energy and trade," Sudradjat DP, Chairman of the Indonesian Chamber of Commerce and Industry (Kadin)`s Middle East Committee, told newsmen here Monday.

He said the Saudi businesspeople had coneveyed their readiness through Kharim Jamil Mukhtar, chief delegate of Foras Inestment Co, who is also assistant to the secretary general of the Islamic Chamber, at a meeting with 40 Indonesian counterparts here on Monday.

The Saudi businesspeople were ready to provide the assistance among others to increase the economic capability of Indonesian businesspersons who are mostly Muslims.

"Similar assistance through Foras Investment Co has also been distributed to a number of SMEs in Senegal, Egypt, Turkey, Pakistan and Malaysia," he said.

The mission of Foras Investment Co. was to increase the economic growth and natural resources in Islamic countries as well as to develop industrial and trade activities to create job opportunities besides improving the economic life of Muslims, he said.

"In addition, the company with capital amounting to about US$ 100 million will also help create new companies in different sectors and help projects which are facing financial problems," Sudradjat said.

Indonesia`s export commodities to Saudi Arabia include paper, automotive batteries, automomobiles, tires, garments, food products and electronics while the country`s sole import commodity from Saudi Arabia was crude oil.

Indonesia`s competitors in trade with Saudi Arabia are China, South Korea and Thailand.

S Korea intending to increase imports from Indonesia

Jakarta (ANTARA News) - A 20-member South Korean business delegation is visiting Indonesia to explore the possibility of importing non-oil/non-gas commodities, such as bauxite, scrap iron,, textiles, handicraft goods, leather and foods.

The South Korean businessmen met with 50 Indonesian business partners to follow up on the agreement between the two countries to enhance cooperation.

"Korea is Indonesia`s important trade and investment partner. Two-way trade in 2006 reached US$10.57 billion, up 6.17 percent from 2005," Secretary General of the Indonesian Trade Ministry Hatanto Reksodipoetro said in his address to the meeting here on Monday.

South Korea was the sixth biggest market for Indonesia`s non-oil/non-gas commodities last year with total imports reaching US$3.4 billion. Meanwhile, Indonesia imported US$2.8 billion worth of commodities from South Korea last year.

"Trade between Indonesia and South Korea still can be enhanced and developed if such a meeting can be held regularly," he said.

Government and BI Already Prepared Economic Crisis Anticipatory Steps

Monday, 14 May, 2007 | 16:30 WIB

TEMPO Interactive, Jakarta: The government and Bank Indonesia (BI) have prepared an umbrella in an anticipatory step against an economic crisis possibly hitting Indonesia again.

Paskah Suzetta, State Minister for National Development Planning and concurrently Head of the National Development Planning Agency (Bappenas), said that the general public need not be concerned about a monetary crisis occurring again like what happened between 1997 and 1998.

“We don't have to worry because a long time ago we created what is called the Indonesian Financial Safety Net as protection in facing such a crisis,” said Paskah after attending a Closed Coordination Meeting regarding the evaluation results of the National Development Planning Conference at the Finance Department, Jakarta, Monday (14/5)

By the protection, he is of the opinion that even if Indonesia were hit again by an economic crisis, it would not be as bad as in 1997-1998.

The Financial Safety Net is a form of solid coordination between monetary and fiscal authorities.

“In the past, (the government and BI) blamed each other. But not anymore,” said Paskah.

AGUS SUPRIYANTO

AC Nielson study shows Indonesians demand CSR

atrick Guntensperger, Contributor The Jakarta Post, Jakarta

While most corporations are now devoting human and financial resources to the practice of Corporate Social Responsibility (CSR), there remains a prevailing belief in some myths that surround the entire realm of socially responsible behavior.

At the top of the list of CSR myths are: that CSR is a luxury add-on that corporations can indulge in only when they are highly successful and when controlling costs is no longer a first-level priority; and that CSR is of minor, if any, significance to consumers in Indonesia and in other developing nations.

However, a recent study by AC Nielsen might just drive a stake through the heart of those two pernicious fables.

The study was carried out in March and April of this year, the results of which were provided to Oxford index, a UK-based international CSR consultancy doing work in Indonesia, and consisted of questions to Indonesians in five major cities across the archipelago.

While the average Indonesian might be unfamiliar with the term CSR, the survey suggests that the principles of social responsibility are of real concern to Indonesians.

Although the term CSR was only recognized by 29 percent of the respondents, deeper investigation revealed that the vast majority, 81 percent, nevertheless believe that social responsibility on the part of corporations is important.

Even more significantly, an overwhelming 84 percent of potential customers would support a corporation they recognized as socially responsible.

These figures indicate that CSR is far from being an unnecessary frill. It is clearly something for which there exists a demand in Indonesia. Or, as they say in the world of advertising, "The market has spoken."

When over 80 percent of consumers make their wishes clear, it is time for businesses to start listening.

AC Nielsen's executive director and head of the company's social research division, Catherine Eddy, said, "There is a whole range of inferences that can be drawn from such a strong positive response."

Farquhar Stirling, managing director of AC Nielsen in Southeast Asia, said, "We now have real evidence that social responsibility provides companies with a distinct advantage in the marketplace."

That competitive edge would, in economic terms, offset many of the short-term costs that a manufacturer might incur in the process of switching to more sustainable methods and products.

We might also conclude that corporations that were recognized as meeting Socially Responsible Investment (SRI) criteria would enjoy an edge in the stock market among investors looking for ethical investment vehicles.

A company with a high CSR profile and credibility would attract individuals with an interest in SRI. It would also be more likely to meet the criteria of institutional ethical investment funds -- a highly lucrative, rapidly growing and much sought-after market segment.

Most market analysts will agree that consumers and investors who demand SRI criteria have a common trait. They refer to them as "picky but sticky". That is to say, they are discriminating in their selection of purchases and investments, but once they have committed, they have intense loyalty.

This would lead us to conclude that the smart money is on those corporations that get in the green game early. They will pick up the first wave of customer loyalty and will be likely to retain those purchasers.

The data also lead us to conclude that the market clearly needs a consistent, comprehensive and credible system of assessing and recognizing corporations and products that meet the public's demand for social responsibility.

The author advises Oxford index on corporate communications and can be reached at pguntensperger@yahoo.ca

Foreign ministry to play role in promoting investment

The Jakarta Post, Jakarta

The Foreign Ministry intends to play a greater role in promoting trade, tourism and investment on the international stage by holding a series of investor forums to showcase the untapped potential of Indonesia's regions.

"Through these forums, we are hoping to use our diplomacy to promote mutually beneficial economic transactions," Foreign Minister Hassan Wirajuda said Thursday during the launch of the first "Update from the Regions" forum.

"This forum will also promote interaction between the diplomatic community, businesspeople and local administrations," he said.

The launch of the forum was attended by ambassadors from some 30 countries, mainly from the Middle East, Europe and Africa, as well as representatives of national and international business associations.

Riau province, located near Singapore, has been chosen as the first province to be featured by the forums, which are to be held regularly.

Riau, which produces oil, gas, crude palm oil, and pulp and paper, has become a major destination for foreign and domestic investors.

According to data from the Investment Coordinating Board (BKPM), foreign investment in Riau amounted to about US$1.8 billion last year, the second biggest amount among the country's 33 provinces. Meanwhile, domestic investment in the province reached Rp 20.8 trillion (about $2.3 billion), the third biggest.

Riau Governor Rusli Zainal said that his administration had taken steps to create a more favorable climate for investment, including the setting up of a coordinating team to handle all bureaucratic problems.

The team, which comprised representatives of the provincial administration, the police, and immigration, customs and tax services, would work together to ensure that the province would become widely known as a good place to do business.

"We have also established a program called 'Riau Vision 2020', which focuses on poverty eradication, human resources development and infrastructure improvements, so as to support economic growth in our province," he said.

He added that his administration planned to organize an investment summit in the provincial capital, Pekanbaru, in September to provide more detailed information on investment opportunities in the province.

Government to Accelerate SOE Privatization

Wednesday, 09 May, 2007 | 14:41 WIB

TEMPO Interactive, Jakarta: The government will accelerate the privatization of several state-owned enterprises (SOEs) this year.

“Privatization that has already been approved by the House of Representatives (DPR) must be speeded up,” Sofyan Djalil, SOE Minister, told reporters at the Presidential Office, Jakarta, yesterday (7/5).

Sofyan was installed as SOE Minister recently, replacing Sugiharto in the cabinet reshuffle announced by President Susilo Bambang Yudhoyono, on Monday (7/5).

In addition to BNI, he said that SOE privatizations to be accelerated include PT Wijaya Karya and PT Jasa Marga.

“As regards Garuda (Indonesia), I don't know yet,” said Sofyan

According to him, another privatization that must be accelerated include further divestment and the rights issue of PT Bank Negara Indonesia because this has already have approved by DPR members.

“With right issue to market, capitalization will be strong,” said Sofyan.

DPR in fact approved BNI privatization using a secondary public offering of 15 percent and rights issue of 15 percent with an additional option of five percent.

Maximum divestment is 35 percent and minimum 30 percent.

Currently, 99.17 percent of BNI shares is owned by the government and the remainder by the public.

Divestment of BNI shares is aimed at fulfilling privatization target in the State Budget by Rp3.3 trillion.

Further BNI divestment is targeted to be realized in the first half of this year.

Wijaya Karya will carry out an initial public offering (IPO) of 35 percent with targeted proceeds of Rp500 billion.

As regards Jasa Marga, it will offer 30 percent shares in an IPO, with proceeds target of Rp2 trillion.

Sutarto, Budiriza and Wahyudin Fahmi

RI to ask for disbursement of all donors` aid commitments

Jakarta (ANTARA News) - Indonesia will ask the World Bank, the Asian Developemnt Bank (ADB) and the Japan Bank for International Cooperation (JBIC) to disburse all the aid commitments of its donor countries totaling US$1.75 billion to cover a deficit in its 2007 state budget, a development planning official said.

Syahrial Loetan, secretary of the National Development Planning Board (Bappenas), said here Thursday the foreign loans would be used to cover a Rp40.6 trillion or 1.1 percent deficit in the 2007 state budget.

He said the House of Representatives (DPR) had agreed to the plan to cover the budget deficit with foreign loans.

Syahrial said the deficit was meanwhile expected to increase to 1.5 - 1.8 percent but the government had at present no plan to seek additional loans to cover the extra shortfall.

"Finance Minister Sri Mulyani and National Development Planning Minister Paskah Suzetta have said if the deficit increases, the extra deficit should be covered with foreign loans only if efforts to raise funds from other sources fail," Syahrial said.

He said the increase in the deficit could be covered with money saved through greater efficiency in spending and the issuance of state debentures. If these efforts failed, steps could be taken to obtain more foreign laons.

The US$1.75 billion loans consisted of 600 million dollars from the World Bank, one billion dollars from the Asian Development Bank and the remaining one from the Japan Bank for International Cooperation.

Ministry to issue investment update

The Jakarta Post - 2007-05-09 10:04:44

JAKARTA, May 9, 2007 (JP) - The Ministry of Foreign Affairs is to start publishing a periodic economic update on business opportunities in Indonesia's major provinces so as to help provide reliable information about the country's investment opportunities to foreign investors.

The ministry said Tuesday in Jakarta that the first edition of the newsletter, to be called Update from the Regions, would be launched at the ministry headquarters in Jakarta on Thursday. Minister of Foreign Affairs Hassan Wirajuda and Riau Governor Riau Rusli will be present for the launch of the update.

The first edition of the update will focus on business and investment opportunities in the agricultural, mining and tourism sectors in Riau, in addition to a number of proposals for projects, such as the construction of a highway linking Pekanbaru and Dumai, the construction of an international port and an industrial estate in Tanjung Buton, and the building of a cement plant in Rokan Hulu regency.

Indonesia government removes import duties on heavy equipment

Jakarta (ANTARA News) - The government has slashed import duties on raw materials and components used in the assembly of heavy equipment down to zero pct from 5 pct previously, the Finance Ministry said.

"The move was aimed at stimulating growth of the heavy equipment industry in the country," the ministry was quoted by XFN Asia as saying in a statement.

It said the ruling, applicable for a period of 12 months, began on Oct 30, 2006 and will be in effect until September this year.

More money for remote areas next year, says minister

Ary Hermawan, The Jakarta Post, Jakarta

The Transportation Ministry will focus its capital spending on remote and disaster-hit areas in 2008, with Rp 3 trillion (US$333 million) having been set aside to build and expand airports and seaports in Papua, Maluku and North Sumatra.

According to the ministry's 2008 business plan, these development projects are based on the assumption that the ministry will get Rp 15 trillion next year, a 49 percent increase over its budget for this year.

"We will distribute the funds proportionately to those provinces ... infrastructure development in Papua and West Irian Jaya has been identified as a priority," Transportation Minister Hatta Radjasa said last week.

The ministry will allocate Rp 1 trillion for expanding existing ports and airports, and building new ones in the two eastern provinces. "This is one of the biggest items," Hatta said. It includes the expansion of seven strategic ports in Papua at a cost of Rp 86 billion.

The construction of more seaports and the provision of more ferries archipelagic provinces, such as Maluku, North Maluku, East Nusa Tenggara and North Sulawesi, would also be prioritized so as to shorten travel times in these regions.

"Especially in Maluku, it can involve a month's wait for a ship from one island to another at the moment," Hatta said. The ministry plans to allocate Rp 239 billion on the development of the sea-transportation sector in the province.

Another large chunk of the money will be spent on the construction of the new Kualanamu Airport in North Sumatra (Rp 930 billion) and Lombok Baru Airport (Rp 515 billion) in West Nusa Tenggara, and on expanding Hasanuddin Airport, which will cost about Rp 491 billion.

The ministry will continue funding the construction of the Kualanamu Airport and Hasanuddin Airport through 2009, Hatta added.

The ministry's plan also states that it will provide Rp 200 billion for the expansion or construction of 27 small airports in remote and disaster-hit areas, including Banda Aceh, Nias, Meulaboh, Nunukan, Atambua, Alor, Tanah Merah and Nabire.

Hatta said capital expenditure in the transportation sector would be aimed at supporting economic growth.

"Transportation is the backbone of the economy as it has an important role to play in reducing the costs of distribution in every industry," he said.