India's anti-graft activist agrees to end hunger strike

Reuters, NEW DELHI | Sat Aug 27, 2011

Veteran Indian social activist Anna Hazare holds a baton on the 12th day
 of his fast at Ramlila grounds in New Delhi August 27, 2011.
(Credit: Reuters/Parivartan Sharma)

(Reuters) - A self-styled Gandhian activist, whose campaign against corruption united millions of Indians, agreed Saturday to end his 12-day hunger strike after the government agreed to his demands for tougher laws against rampant graft.

Anna Hazare, 74, told tens of thousands of supporters in New Delhi Saturday evening, flanked by members of the ruling Congress party, that he would end his hunger strike Sunday morning.

Hazare's agitation has tapped a groundswell of public anger against endemic corruption, uniting the country's bulging middle-class against the hapless government and underlining voter anger at Prime Minister Manmohan Singh.

(Reporting by Annie Banerji; Editing by Paul de Bendern)

Govt says economy to grow at least 6.5% in Q3

Esther Samboh, The Jakarta Post, Jakarta, Thu, 08/25/2011

The government expects Indonesia’s economy to grow “at least” 6.5 percent in the July-September period despite an anticipated slowdown in the global economy, a senior official says.

On Thursday, Finance Minister Agus Martowardojo said this growth would be supported by surging realization of investment on the back of improved disbursement in infrastructure projects.

“The global economy is going downward, but we will be better,” Agus said after a coordination meeting at Bank Indonesia headquarters in Jakarta. “All is in a good shape — economic growth, inflation [and the] exchange rate.”

Indonesia maintained an economic growth level of 6.5 percent in the first two quarters of this year while its Asian neighbors were facing "speed bump" woes over potential overheating and inflationary threats and when developed economies were slowing down.

Inflation also continued to decline to 4.61 percent in July and the rupiah, Asia’s second-best performing currency, has appreciated around 5 percent this year.

“But we should pay attention on oil and gas exports and imports as these have affected the reduction of our current account [surplus],” Agus said.

President Yudhoyono sets 11 national priorities for 2012 budget

Antara News, Tue, August 16 2011

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Jakarta (ANTARA News) - President Susilo Bambang Yudhoyono breaks down his medium-term development program into 11 national priorities in the 2012 draft budget.

President Susilo Bambang
Yudhoyono. (ANTARA)

He presented them in his address on the government`s 2012 draft budget and its financial notes made before the parliament here on Tuesday.

The 11 national priorities include bureaucratic and governance reform, education, health, poverty alleviation, food resilience, infrastructure, investment and business climate, energy, environment and disaster management and management of backward and border villages and post-conflict efforts and culture, creativity and technological innovation.

In his state address annually done ahead of the country`s independence anniversary on August 17 President Yudhoyono also presented budget assumptions.

They include assumed revenues and grants totaling Rp1,292.9 trillion which is up by 10.5 percent compared to that of last year and public spending at Rp1,418.5 trillion up by Rp99.7 trillion from last year.

Other assumptions include for economic growth set at 6.7 percent (now 6.5 percent), inflation at 5.3 percent, interest of three-month treasury bonds at 6.5 percent, rupiah exchange rate at Rp8,800 against the US dollar, the price of crude at US$90 per barrel and crude production at 950,000 barrels a day.

In the transportation sector the government plans to develop 150 kilometer long in new railway networks, develop and rehabilitate 116 airports and build 14 new airports. "We wish to spread infrastructure development across the country," he said.

In the sector the government also plans to build new roads and improve the capacity of existing roads as long as 4,005 kilometers, maintain and repair 36,316 kilometer long roads across the country including construction of 7,682 meter long new bridges and maintain 217,076 meter long existing bridges.

Editor: Priyambodo RH

Indonesia no longer a Third-World economy, says SBY

Esther Samboh, The Jakarta Post, Jakarta, Tue, 08/16/2011

Indonesia is no longer a Third-World economy as has been labeled in the past, and is moving closer to becoming one of the world's ten largest economies, President Susilo Bambang Yudhoyono says.

In his annual speech at the House of Representatives in connection with Indonesian Independence Day, Yudhoyono said "the perception of [Indonesia being] a failed state has diminished" after sailing through the financial crisis in 1997/1998 and 2008/2009.

"Now, a lot of people call Indonesia an emerging economy, not a Third-World economy, which, for more than 60 years, was associated with our country," he said.

"With full confidence while still being humble, I can assure you we are not a country on the brink of failure and bankruptcy."

After the 1997/1998 Asian financial crisis, Indonesia was in a "very critical" situation and was perceived as a country that could fail and go bankrupt, with negative economic growth and market players losing confidence in the financial and banking industries, he added.

At present, however, Indonesia is known as the world's third-largest democracy and Southeast Asia's biggest economy, Yudhoyono said.

"All of our achievements in the recent years have affirmed that there is trust and that a road toward a better future lies ahead of us, for us to pass through together.

Indonesia to Give Tax Holidays for Major Direct Investors

Jakarta Post, Aditya Suharmoko, August 15, 2011           

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Jakarta. Indonesia will give a tax holiday for investors committing at least 1 trillion rupiah ($117 million) into sectors including metals and energy, an effort to spur record levels of foreign direct investment in Southeast Asia’s biggest economy.

The G20 member aims to become a world top ten economy by 2025 through boosting investment, improving infrastructure and developing industries that add value to its position as a leading producer of resources such as tin, palm oil and coal.

Finance Minister Agus Martowardojo said he will issue a regulation later on Monday on the scheme, which will cover base metals, oil refining, petrochemicals, renewable energy, machinery and telecoms equipment.

This will exempt investors from paying taxes for between five and 10 years after their companies start operations, though the duration was still being discussed, he said. 

Existing investors that have operated commercially for under one year may also ask for a tax holiday, he added.

“The impact will be huge. It can help us reach our 2011 investment target,” said the country’s investment chief Gita Wirjawan, referring to a target to get 240 trillion rupiah of investment this year.  

Some investors have announced plans to build manufacturing plans in the country but have been waiting for the details of the mooted tax holiday scheme before starting operations. 

Planned investments include $6 billion in a joint venture steel plant by South Korea’s POSCO, the world’s no.3 steelmaker, $4.5 billion by South Korea’s Honam Petrochemical Corp for a petrochemical complex, and $8-$9 billion from Kuwait Petroleum Corp to build a new oil refinery. 

Foreign direct investment surged 21 percent in the second quarter of 2011 from a year earlier as strong commodity prices attracted investors into the mining sector, even without a tax holiday.

Purbaya Yudhi Sadewa, economist at Danareksa Research Institute in Jakarta, said the tax holiday was a good strategic move for the sectors chosen. 

“I don’t think we have to question that we’re losing money from tax for 5 to 10 years -- if they don’t come we still don’t get it anyway ... On oil refining it could help cut fuel shipments to Indonesia as we haven’t build any new refinery since the 1990s,” he said. 

The former OPEC oil producer’s ageing refineries mean it relies on gasoline and diesel imports from neighbor Singapore to meet its growing fuel demand. 

Chief economics minister Hatta Rajasa said that the government is also planning this month to revise an existing tax allowance regulation for smaller investments, involving either 50 billion rupiah and 300 workers or 100 billion rupiah and 100 workers.

Martowardojo said if the investors already had this tax allowance they would be exempted from getting the tax holiday. 

Analysts warn that the country needs to overhaul and expand its infrastructure in coming years to keep attracting firms. The government is relying on private investors for two-thirds of its $150 billion infrastructure needs.

Reuters