Indonesia Summons Australian Ambassador Over Spying Report

Jakarta Globe – AFP, October 31, 2013

Australian Ambassador Greg Moriarty, right, with Australian Prime Minister
Tony Abbott during a forum with top Indonesian businessmen in Jakarta. (AFP
\Photo/Romeo Gacad)

The government said Thursday it was summoning the Australian ambassador after a report that his embassy in Jakarta was being used for surveillance as part of a US-led spying network.

Ambassador Greg Moriarty will face questions at the foreign ministry Friday over the “totally unacceptable” activities reported in the Sydney Morning Herald, the ministry said.

The report said Australian embassies were being secretly used to intercept phone calls and data across Asia as part of a US-led global spying network. It cited information from fugitive analyst Edward Snowden and a former Australian intelligence officer.

The paper said the clandestine surveillance facilities at embassies were being operated without the knowledge of most Australian diplomats.

The summons was just the latest diplomatic fallout related to the US surveillance controversy, which began as a row between Washington and its European allies.

“Responding to reports in the Sydney Morning Herald newspaper on October 31, 2013 about the existence and use of wiretapping facilities at the Australian embassy in Jakarta and other countries in the region, the Ministry of Foreign Affairs is demanding an explanation from the Australian embassy in Jakarta,” the foreign ministry statement said. “The Australian ambassador in Jakarta has been summoned to come to the foreign ministry… on November 1, 2013, to provide an official explanation from the Australian government about the report…. As a friendly neighbouring country, such an act as reported does not reflect the spirit of friendly relations which has been established and is something that’s totally unacceptable to the government of Indonesia.”

A spokesman for the Australian foreign ministry said: “As a matter of principle and longstanding practice, the Australian government does not comment on intelligence matters.”

Indonesia’s anger came a day after it protested strongly to the United States after a report in the same newspaper said Washington had been monitoring phone calls and communication networks from its embassy in Jakarta.

The Asia-Pacific row came after Europe and Washington traded more spying accusations Wednesday, as envoys met to seek ways to rebuild trust after the shock revelations about the scale and scope of US surveillance of its allies.

Agence France-Presse

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United Kingdom of Surveillance

Being Watched, Indonesia Seeks Answers

Jakarta Globe, October 31, 2013

Embassy security looks through a binocular as he guards in front of the US Embassy
in Jakarta in this file photo taken on March 14, 2006. (EPA Photo/Adi Weda)

Indonesia has demanded the United States formally clarify a news report that its embassy in Jakarta has been used as a base to hack into the electronic communications of President Susilo Bambang Yudhoyono and other Indonesian leaders.

Indonesian experts and lawmakers have asked the government to stand up to the US, and to take stern actions, including sending home several American diplomats or scale back Indonesia’s diplomatic mission in that country.

The Sydney Morning Herald reported — quoting intelligence data leaked by US intelligence whistle-blower Edward Snowden and several Australian officials — that the US Embassy in Jakarta was one of the super power’s 90 surveillance facilities worldwide used to monitor “nearly everything a typical user does on the Internet” including e-mailing, web browsing, Internet searches and social media.

Foreign Minister Marty Natalegawa called on Wednesday for Kristen Bauer, the US Embassy’s charge d’affaires, to confirm whether there was any credibility to the news.

“Indonesia can’t accept it and has lodged a strong protest on the news that there are wiretapping facilities inside the US Embassy in Jakarta,” Marty said in a statement sent to the Jakarta Globe.

The Herald also reported, late on Wednesday, that the Australian Embassy in Jakarta was being used for the same illegal purposes of spying on Indonesian officials. An Indonesian official said the Australian ambassador will be summoned to the Indonesian Foreign Ministry’s office to provide an explanation.

Australian intelligence sources confirmed to Fairfax Media that Australia’s electronic espionage agency, the Defense Signals Directorate, is a “full partner” in the program, which they said “overwhelmingly harvests diplomatic, political and economic intelligence, not just information relating to terrorism and security.”

The operations are said to take up an entire room within the embassy compound and that local telephone calls can be listened to at will.

Getting the US to explain

As for the US in the meantime, Marty has asked for an explanation from US officials.

“I have talked with the US Embassy charge d’affaires and demand an official explanation from the US government on the news,” Marty said. “If it’s confirmed, then the activities are not just security breaches but also a serious violation of diplomatic norms and ethics. It’s certainly against the spirit of interstate friendship,” he added.

Bauer is temporary representing the US as Robert Balke, the designated ambassador to Jakarta, has yet to arrive in the city.

During Marty’s phone call to Bauer, the charge d’affaires was only listening, said an official, who asked for anonymity.

“She can’t say anything because she has to report back to Washington. That’s why we are now waiting for the US response,” the unidentified official said.

He said that whatever the answer, Indonesia would ask the US not to conduct any illegal surveillance with the country in the future, and would demand a political commitment to respect the friendship that Indonesia and the US have forged so far.

When contacted by the Jakarta Globe, US Embassy press attache Troy Pederson confirmed that the charge d’affaires has spoken with the Indonesian foreign ministry about the matter.

“We will continue to address these issues in diplomatic channels with our partners and allies,” he said.

Fachry Ali, a senior political expert at the Indonesian Institute of Sciences, said the damage has been done on the image of the US, and that Indonesia — as well as many countries in the world — has lost trust on whatever the US has to say and do.

“It’s against human rights — illegal and an attack on our sovereignty. So what else is left? We probably will keep on suspecting the US diplomats even when we do something together,” he said. “Indonesia should be tougher on this issue.”

Ethically wrong

Hikmahanto Juwana, a law professor at the University of Indonesia, said actions by the US were against international ethics and law.

“There are a number of measures to show that we can’t accept such conduct. We can expel several US diplomats or scale down our representation in the US. But the question is do we dare to do such things?” he said.

Hikmahanto said Jakarta’s reaction would most likely only be aimed at taming public anger, and should the US provide an explanation, do nothing.

He said Indonesia should be more cautious in the future when having to work together with the US.

“BIN [Indonesian Intelligence Agency] should actively do its own part to prevent such massive wiretapping from happening again,” he said.

While Indonesia awaits a US response, it also seeks an explanation from Australia on alleged spying activities.

Fairfax Media, the owner of the Herald, has been told that Australia’s collection of signals intelligence takes place from embassies in Jakarta, Bangkok, Hanoi, Beijing and Dili, and High Commissions in Kuala Lumpur and Port Moresby, as well as other diplomatic posts.

A secret US National Security Agency document leaked by Snowden and published by Germany’s Der Spiegel reveals the existence of a highly sensitive signals intelligence collection program conducted from sites at US embassies and consulates and from the diplomatic missions of other “five eyes” intelligence partners including Australia, Britain and Canada.

Code named “Stateroom,” the program involves the interception of radio, telecommunications and internet traffic.

The document explicitly states that the Australian Defense Signals Directorate operates Stateroom facilities “at Australian diplomatic facilities.”

Surveillance in small size

The document notes that the surveillance facilities “are small in size and in number of personnel staffing them.”

“They are covert, and their true mission is not known by the majority of the diplomatic staff at the facility where they are assigned,” the document says.

The NSA document also observed that the facilities were carefully concealed. “For example antennas are sometimes hidden in false architectural features or roof maintenance sheds,” according to the report.

A former Australian Defense Intelligence Organization officer told Fairfax Media that the interception facility at the Australian Embassy in Jakarta played an important role in collecting intelligence on terrorist threats and people-smuggling, “but the main focus is political, diplomatic and economic intelligence.”

“The huge growth of mobile phone networks has been a great boon and Jakarta’s political elite are a loquacious bunch; even when they think their own intelligence services are listening they just keep talking,” the source said.

He said the Australian Consulate in Denpasar, Bali, has also been used for signals intelligence collection.

An Indonesian official said Indonesia would lodge a similar complaint with the Australian Embassy today.

“Yes, we will also ask for clarification on the news,” the official, who declined to be named, said.

It’s not the first time that intelligence gathering in Jakarta by other nations has come to the fore.

Intelligence leaks to the media in the 1980s disclosed an installation of “extraordinarily sophisticated’’ interception equipment in Australia’s High Commission in Port Moresby and in the Australian Embassies in Jakarta and Bangkok.

Further leaks of top-secret defense intelligence reports on Indonesia and East Timor in 1999 also indicated that Australia intelligence had extensive access to sensitive Indonesian military and civilian communications.

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Dignity in Decent Work: Protect Domestic Workers From Abuse

Jakarta Globe, October 29, 2013

 “I woke up at 4:15 a.m.,” Asma said. “I was exhausted when I went to sleep at 10 p.m. I only had five minutes’ rest … I did not get any days off [or] salary.” Asma is one of an estimated 1.8 million women and girls in Indonesia who engage in domestic work, one of the largest sources of employment for rural women in the country. Her story — too real for too many — transcends national boundaries, resonating with the more than 52 million maids, nannies and caregivers worldwide whose labor is essential to the households they serve.

But domestic workers in Indonesia do more than cook, clean and care for their employers’ families. Their labor is also essential to Indonesia’s national economy, and yet the government is not protecting them.

Indonesia, like many other countries in Asia and the Middle East, excludes domestic workers — or pembantu rumah tangga — from its national labor laws. This leaves their work largely unregulated and denies domestic workers access to basic rights enjoyed by other workers, such as a minimum wage, weekly days off, and overtime. Their exclusion from key labor protections is exacerbated by the unique isolation domestic workers face in the private homes of their employers — where they are often subject to an array of exploitative conditions and criminal abuse.

Once marginalized and invisible, a new dawn could be approaching for Asma and other domestic workers like her. In collaboration with full-time domestic workers who are driving national efforts, stalwart activists — such as Anis Hidayah of Jakarta-based Migrant Care, and Lita Anggraini of Indonesia’s National Network for Domestic Workers Advocacy — are engaging and mobilizing domestic workers at the community, national and international level.

Domestic workers are using innovative strategies to unite their efforts into a global movement with its voices heard in legislative chambers from the Philippines to South Africa, and Italy to Argentina. Domestic workers around the world are partnering with labor unions and civil society groups, putting their issues front and center of their governments’ national agendas and demanding that their basic human rights be respected.

A new report from the International Domestic Workers Network, the International Trade Union Confederation and Human Rights Watch tracks the impressive momentum of the global domestic workers’ movement over the last two years. Based on interviews from domestic workers and civil society representatives from over 20 countries, “Claiming Rights: Domestic Workers’ Movements and Global Advances for Labor Reform” explores the creative strategies activists have used to mobilize and strengthen labor laws at the national and international level.

Over a decade of organizing by domestic worker activists — including Indonesia’s robust movement — has culminated in the establishment of a groundbreaking new treaty that sets out the first international labor standards to promote decent work for domestic workers. The International Labor Organization’s Domestic Workers Convention entitles domestic workers to the same basic rights as other workers, such as a minimum wage, social security, weekly days off and clear information on the terms and conditions of their employment. Governments whose countries are party to the convention are obligated to protect domestic workers from violence, regulate private employment agencies that recruit domestic workers, and prevent children from laboring in domestic work.

According to a 2013 ILO study, over 20 million domestic workers are employed in Asia, making the region the single largest employer of domestic workers worldwide. The Philippines was the first Asian country to ratify the Domestic Workers Convention. President Susilo Bambang Yudhoyono should ensure that Indonesia is the second.

President Yudhoyono expressed his unequivocal support for the Domestic Workers Convention at the 2011 ILO Conference in Geneva. Meanwhile, though, Indonesia’s Bill on the Protection of Domestic Workers — put before parliament more than two years ago — has made little progress toward enactment, and its current provisions fall short of international standards that would provide meaningful legal reform.

The Indonesian government should bring its domestic workers under the protection of national labor laws and ensure that those laws are strengthened to comply with international human rights standards. It should closely work with civil society groups to strengthen the proposed domestic workers’ bill, laying the groundwork for Indonesia’s ratification of the Domestic Workers Convention.

Indonesia has an historic opening where the voices of domestic workers like Asma are transcending the walls of their employers’ homes to occupy a rare public and political space. The government should listen and respond to these voices, by taking concrete steps to ensure that all of Indonesia’s workers get the dignity they deserve, the value they earn and the respect that they demand.

 Matthew Rullo, a coordinator in the women’s rights division at Human Rights Watch, is a co-author of “Claiming Rights: Domestic Workers’ Movements and Global Advances for Labor Reform.” Follow him on Twitter: @MatthewRullo.

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A domestic helper from Mindoro island gathers hanging clothes in Manila on

September 6, 2012 (AFP/File, Jay Direct

3 Bank Mandiri Employees Arrested for Fraud

Jakarta Globe, Farouk Arnaz, October 23, 2013

A branch of Mandiri Syariah, the bank’s Shariah compliant finance unit.
 (JG Photo/Yudhi Sukma Wijaya)

The National Police have arrested three officials in the Shariah compliant finance unit of Bank Mandiri and named them suspects in the alleged embezzlement of Rp 59 billion ($5.2 million) from the bank.

“The three suspects are M.A., H.H. and J.L.,” National Police spokesman Insp. Gen. Franky F. Sompie said on Wednesday.

M.A. has been identified as the head of the Shariah division’s main branch in Bogor, H. H. as the head of a smaller branch, also in Bogor, and J. L. an account officer who likely worked with J.L.

Police made the arrests on Tuesday night. They seized a total of eight cars from the suspects, including two Mercedes-Benz sedans, two SUVs (a Hummer and a Toyota Fortuner) and a Toyota Alphard van.

The suspects allegedly embezzled the RP 59 billion from Rp 102 billion in loans distributed among 197 clients — none of whom actually existed, police have determined. Police have not yet said what became of the rest of the money.

Franky said police would charge the suspects with bank fraud and money laundering — charges that could carry 15 and 20 year prison terms, respectively.

Indonesia Investment Up 28% in a Year: BKPM

Jakarta Globe, Francezka Nangoy, October 23, 2013

A girl walks past a construction site for luxury apartments in Jakarta in
August, 2013. (Reuters Photo)

Investment in Indonesia continued to grow during the third quarter of this year, despite concerns that much of the shine had been taken off the country’s economy in recent months.

“Indonesia is still attractive for new investment,” Mahendra Siregar, the new chief of the Indonesia Investment Coordinating Board (BKPM), told reporters on Wednesday. “Also, companies that have already established here for years continue to expand their businesses, showing confidence in the economy.”

Mahendra said that from the period of July to September, total realized direct investment reached Rp 100.5 trillion ($8.9 billion) — a 23 percent year-on-year increase and the first time the figure had edged above Rp 100 trillion.

During the first nine months of the year, total investment in Indonesia rose 28 percent to Rp 293.3 trillion — 75 percent of the BKPM’s full-year target of Rp 390 trillion. The figure consists of Rp 199.2 trillion in foreign direct investment and Rp 94.1 trillion in domestic funding.

Mahendra said his agency held confidence that the trend would meet the target for 2013.

SBY Signs New Constitutional Court Regulations

Jakarta Globe, October 18, 2013

The new Constitutional Court regulation is expected to set out what is required
 of the justices, the selection process and the oversight to which the sitting
justices will be subjected. (JG Photo/Safir Makki)

President Susilo Bambang Yudhoyono signed on Thursday a regulation aimed at restoring public trust in the Constitutional Court following the arrest of Akil Mochtar, the court’s suspended chief justice.

The regulation in lieu of a law, or Perpu, codifies three main points, Djoko Suyanto, the coordinating minister for political, legal and security affairs, told a televised press conference.

“It sets out what is required of the court’s justices, the selection process to appoint new justices and the oversight to which the sitting justices will be subject.”

The Perpu, which stands as law until it is either ratified or struck down by the next sitting of the House of Representatives, firstly stipulates that a judicial candidate must not have been a member of a political party within the previous seven years.

Secondly, the Perpu tasks the Judicial Commission with establishing a panel of seven experts to select candidates for the Constitutional Court bench, whose names will be forwarded to the House of Representatives for final selection.

The government, the House and the Supreme Court will each propose one candidate for the expert panel, while four others will be selected by the Judicial Commission.

Finally, Djoko said, the Perpu establishes a permanent advisory body to the Constitutional Court, tasked with monitoring judicial conduct.

“Five members — former judges, academics, lawyers and public representatives — will be selected by the Judicial Commission,” Djoko said.

Akil was nabbed by the Corruption Eradication Commission earlier this month while allegedly accepting a bribe.

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Inter Milan: Indonesian tycoons buy majority stake in club

BBC News, 16 October 2013

Inter has as estimated 160 million supporters across the world

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Italian football club Inter Milan has become the latest European club to be taken over by foreign investors.

A trio of Indonesian businessmen led by media tycoon Erick Thohir have bought a 70% stake in the club.

The club did not disclose the value of deal, but various reports estimated it to be between 250m - 300m euros ($340m; £210m - $405m; £250m).

The two sides had been negotiating for some time amid efforts by the club to bring in fresh capital.

Massimo Moratti, the president of the club, said the club's "history is going to be enriched by a new season thanks to our new international partners who, I am sure, will contribute to a continued string of successes".

"The new partners' enthusiasm and pragmatism are certainly a guarantee for the future," he added in a statement.

Mr Thohir is also a co-owner of DC United, a Major League Soccer club in the US and has also served as vice president of the Indonesian Olympic Committee.

The other two partners in the deal are Rosan Roeslani and Handy Soetedjo.

Mr Roeslani also owns a stake in DC United, while Mr Soetedjo was involved in the purchase of basketball team Philadelphia 76ers of the National Basketball Association (NBA) in 2011.

China, EU agree to US$57bn currency swap

Want China Times, Xinhua 2013-10-11

China has signed a 350 billion yuan (US$57 billion) currency swap agreement with the European Union, marking a major step in internationalizing its currency.

The deal, signed between the People's Bank of China and the European Central Bank on Wednesday, aims to support bilateral trade and protect financial stability, according to a statement on the PBOC website.

The agreement lasts three years and can be extended if both parties agree, it said.

"The new arrangement will provide more liquidity to the renminbi market in the euro area, promote overseas use of the yuan, and help facilitate trade and investment," the statement added.

So far China has signed currency swap deals totaling 2.2 trillion yuan (US$358 billion) with 22 countries and regions to push the international use of its yuan.

On Oct. 1, China signed a 100 billion yuan (US$16.3 billion) currency swap agreement with Indonesia and signed similar agreements with Hungary and Albania in September, bringing China closer to making its currency fully convertible.

The agreement with the EU indicates that China has signed currency swap deals with developed nations instead of neighboring and developing countries.

"The deal with the world's second-largest currency regulator means the increasing international recognition of the Chinese yuan," said Zong Liang, deputy chief of the Strategic Planning Research Institute under the Bank of China.

In September, the yuan jumped to ninth in the latest survey by Bank for International Settlements on foreign-exchange turnover, with its daily trading more than tripling to US$120 billion from US$34 billion three years ago, when it was ranked 17th.

"The global increasing need for renminbi transactions is a natural choice as the Chinese renminbi has a stable exchange rate and is more risk-proof," according to Guo Tianyong, a financial studies professor with the Central University of Finance and Economics.

Meanwhile, the deal will expand renminbi-based settlement, reducing reliance on the US dollar, which can hedge against the risk of US possible debt default, Guo added.

Renminbi coins and banknote. (Photo/CFP)

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"The U in Kundalini"- Oct 18, 2012 (Kryon channeled by Lee Carroll) - (Subjects: Kundalini, Unification, EU, Nobel Peace Prize 2012, Middle East, South America, Only 5 Currencies on Earth, Old Souls, Duality will dismiss, 3D Humanity will melt with Multi dimensional higher self, Global Unity… etc.)

Putin is latest Asia summit no-show to raise eyebrows

Google – AFP, 9 October 2013

Russia's President Vladimir Putin attends the leaders' declaration at the APEC 

Leaders' News Conference in Nusa Dua on the Indonesian resort island of Bali

on October 8, 2013 (Pool/AFP/File, Beawiharta)

Bandar Seri Begawan — After the US president's no-show at a pair of Asia-Pacific summits, eyebrows are being raised over Russian leader Vladimir Putin's decision to also skip one of the gatherings.

Despite coming to the region for an economic meeting in Indonesia earlier this week, Putin has passed on a subsequent East Asia summit in the sultanate of Brunei set for Friday.

It marks the third straight year that Moscow has sent a stand-in to a gathering that Russia had lobbied hard to join in 2011, raising questions over Moscow's level of commitment to the East Asia bloc.

Russia had promised "to be represented at the highest level," said Surin Pitsuwan, former secretary general of the Association of Southeast Asian Nations (ASEAN), annual host of the East Asia summit.

"For some reason or another they have not been. That is disappointing."

US President Barack Obama cancelled a visit to Asia, including the twin leaders' meetings, due to the US government shutdown, casting doubt over his administration's planned pivot to the region.

Brunei organisers of Friday's summit -- a group of 18 nations, including Southeast Asian countries, the United States, China and Russia -- said Moscow also had informed them a week ago that Putin would not be coming.

He is instead represented in Brunei by his foreign minister Sergei Lavrov.

The United States and Russia first joined the 16-nation East Asian bloc, which centres on ASEAN, in 2011 in what analysts saw as a potential check on Chinese influence in the region.

But it is becoming increasingly clear that Russia's trade and other ties with the ASEAN bloc are too small to rate high-level interest from Moscow, said a Southeast Asian diplomat who spoke on condition of anonymity.

"It (Putin's absence) just reflects how Russia looks at ASEAN -- that it doesn't give much weight to ASEAN," said the diplomat, noting Russia has no direct stake in hot-button issues in the region such as overlapping claims in the strategic South China Sea.

"It does seem that Russia has given more premium to its relations with the APEC grouping."

APEC refers to the Asia-Pacific Economic Cooperation bloc spanning the region.

Just days ago at the APEC summit in Bali, Putin touted the importance of Russia's involvement in supplying energy to growing Asian markets.

A Kremlin spokesman denied that Russia had lost interest in ASEAN and the East Asia summit, but added: "Unfortunately, he (Putin) cannot attend every summit. There is a degree of priority for everything."

But Fyodor Lukyanov, chairman of the Kremlin-linked Council on Foreign and Defence Policy, said: "Putin has simply nothing to offer this summit."

"You need a really strong agenda for the president to go to such an event, especially when Russia is not a member," he said.

"But there is no such agenda, so we decided that there was no point in going there as tourists."

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APEC opens two-day summit in Bali

Indonesian President Susilo Bambang Yudhoyono, right, shakes hands with
 Russian President Vladimir Putin after speaking during the APEC Leaders’ News
 Conference on the final day of the Asia-Pacific Economic Cooperation (APEC)
Summit in Nusa Dua on the Indonesian resort island of Bali on October 8, 2013 as
country leaders and representatives look on. (EPA Photo)

..

Yellen Fed Choice Spurs Indonesian Optimism

Jakarta Globe, Bloomberg, October 9, 2013

A file photo dated 10 October 2012 showing Janet Yellen, Vice Chair of
the US Federal Reserve System, attending a seminar. (EPA Photo)

Janet Yellen’s nomination to lead the US Federal Reserve may signal a reprieve for Asian economies including China and South Korea from any immediate reduction of stimulus that could roil markets and capital flows.

Bank Indonesia Deputy Governor Perry Warjiyo said in a mobile-phone message today that tapering of US stimulus may not come into effect immediately with Yellen’s appointment.

Philippine Finance Secretary Cesar Purisima said in a phone message that Yellen’s nomination signals stability, policy continuity and a “steady course for the Fed.”

South Korea said it expects Yellen will “consider well” the effects on other nations of reducing US bond-buying, while Koichi Hamada, an adviser to Japanese Prime Minister Shinzo Abe, predicted the new chairman won’t rush to exit monetary easing.

Asia is grappling with Fed policy shifts and the Group of 20 economies plans to identify market turmoil from central banks’ stimulus withdrawal as a key risk to the global financial system. Emerging-market stocks plunged in May when Chairman Ben S. Bernanke signaled that record easing may be pared, then rebounded when the Fed maintained stimulus last month.

“If the Federal Reserve pulls out the rug underneath Asian markets, it could clearly lead to some nasty repercussions,” said Frederic Neumann, HSBC’s co-head of Asian economics in Hong Kong. “But Yellen is seen as somebody who might withdraw stimulus only gradually and that buys Asian policy makers time to build up the defenses for the day when US interest rates do begin to rise.”

US President Barack Obama will announce the nomination at 3 p.m. in Washington on Oct. 9, a White House official said in an e-mailed statement. If confirmed by the Senate, Yellen, 67, would succeed Bernanke, 59, whose second four-year term ends in January.

“She has rich experience and an impressive resume as a policy maker,” Choi Hee Nam, director general of the South Korea finance ministry’s international finance bureau, said by phone from Sejong today. “I expect her to consider well the ripple effects on other countries” from policy decisions such as altering the Fed’s bond-buying program, Choi said.

No comment was immediately available from the Bank of Japan. China’s central bank and Ministry of Foreign Affairs didn’t immediately respond to requests for comment.

Cao Yongfu, a researcher who follows US economic policy for the government-run Chinese Academy of Social Sciences, said Yellen’s nomination will help sooth China’s short-term concerns that an immediate tapering of Fed bond-buying would cause volatility in capital flows.

Even so, prolonged easing under Yellen may result in dollar depreciation and undermine the value of China’s foreign exchange reserves, Cao said. “Yellen’s big challenge will be to shift Fed policies back to normal from an ultra-loose stance — you can’t always keep your foot on the gas.”

Yellen won the nomination after former Treasury secretary and White House economic adviser Lawrence Summers withdrew from consideration when Democrats on the Senate Banking Committee expressed opposition to his candidacy.

As the Fed’s No. 2 official, she has articulated the case for maintaining highly accommodative monetary policy. In a series of 2012 speeches, she outlined why interest rates could remain near zero into late 2015, and in a 2011 speech she justified the Fed’s first two rounds of large-scale asset purchases with an estimate that the programs would create 3 million jobs.

Yellen isn’t among the Fed policy makers who have pressed this year to pare back asset purchases, a group that includes Esther George, president of the Federal Reserve Bank of Kansas City, Jeffrey Lacker of Richmond, Richard Fisher of Dallas and Charles Plosser of Philadelphia.

“I assume Yellen’s nomination means QE for longer and the exit of QE is likely to be gentle,” said Dong Tao, head of Asia economics excluding Japan at Credit Suisse in Hong Kong. “That would be good news for China,” which is having difficulty maintaining growth momentum just as the “tides of global money printing” may start to turn, Tao said.

Hamada, a retired Yale University professor who advises Abe on monetary policy, said Yellen is “more likely to seek a way to make an economic recovery certain by keeping policy accommodative.” If prospects of an exit weaken, that may put pressure on the yen to strengthen, which risks harm to Japan’s economy and would boost the need for the BOJ to act, said Hamada, who doesn’t speak for the government.

‘Appropriate’ person

At the same time, Hamada said he would “very much welcome” Yellen’s appointment. “She has long experience in central bank policy and she understands the role of monetary policy in the macro economy. She is the most appropriate person to lead the Fed.”

A Bloomberg Global Poll last month of investors, analysts and traders, conducted before Summers’s withdrawal, found 47 percent saying Yellen would preside over the same policy as Bernanke, with 17 percent saying it would be looser and 8 percent seeing tighter conditions. Thirty-five percent said Summers would provide less stimulus than Bernanke.

Yellen has been vice chairman of the Fed in Washington since 2010, helping to craft bond-buying and communication policies. As president of the Federal Reserve Bank of San Francisco in the six previous years, she monitored Asia and oversaw banks with foreign exposure, including Wells Fargo & Co.

She also deepened her institution’s ties to Asia, starting a biennial conference on Asia economic policy in 2009 that attracted central bank officials from China, South Korea, the Philippines, Taiwan and Singapore, according to a list of attendees on the bank’s website.

Yellen oversaw many of the biggest Asian banks doing business in the US, hosted Asian central bankers and financial regulators for get-togethers and traveled often to the region, said David Loevinger, former US Treasury Department senior coordinator for China affairs.

She has a “deep understanding of Asian economies, banks and business practices,” said Loevinger, now an emerging-markets analyst at TCW Group in Los Angeles. “She was less prone to lecturing than other US government officials. Asians appreciated that.”

The concern of emerging markets is that when the Fed does begin tapering its bond buying, it could hurt them by sparking an exodus of cash and higher borrowing costs. Brazil, Turkey, South Africa, India and Indonesia are the most vulnerable, Goldman Sachs Group Inc. strategists said in a Sept. 5 report.

By contrast, the International Monetary Fund said Oct. 7 that Canada, South Korea and Australia are among the countries best placed to weather any global market volatility from the withdrawal of US monetary stimulus. The IMF and World Bank hold annual meetings this week in Washington, where G-20 finance ministers and central bankers will also gather.

Even if it doesn’t serve as central bank to the world, the Fed is still entering a fresh era in which international events will increasingly shape its decisions, according to Barry Eichengreen, a professor at the University of California at Berkeley, where Yellen taught.

In a July paper, he said US unemployment and inflation will be affected as globalization forces the US to be more open to trade and financial transactions, emerging markets eat into its share of the world economy and the dollar’s role as the sole reserve currency is eventually eroded.

“Progressively the Fed is going to have to be more outward looking,” Eichengreen said in an August interview.

Bloomberg

APEC opens two-day summit in Bali

Deutsche Welle, 7 October 2013

Leaders from Asia-Pacific nations and territories have gathered on the Indonesian island of Bali to attend the APEC summit . Notable by his absence is US President Barack Obama.

 Indonesia's President Susilo Bambang Yudhoyono delivers his speech during
 the opening of the Asia-Pacific Economic Cooperation (APEC) CEO Summit in
 Nusa Dua, Indonesia resort island of Bali October 6, 2013. REUTERS/Beawiharta

The leaders from the 21 members of the Asia-Pacific Economic Cooperation (APEC) were expected to discuss reducing trade and investment barriers and speeding up regional economic integration and infrastructure development.

Opening the summit, which is taking place under high security, Indonesian President Susilo Bambang Yudhoyono on Monday called for closer cooperation in the region.

"We all feel the pain of the crisis," Yudhoyono said. "It is therefore important to develop closer cooperation towards accelerating economic growth and global recovery."

Among the leaders attending are Chinese President Xi Jinping, Japanese Prime Minister Shinzo Abe and new Australian Prime Minister Tony Abbott. Russian President Vladimir Putin was expected to arrive on Monday

Obama cancellation

However, US President Barack Obama, who had hoped to use the summit to iron out issues regarding the free-trade pact he is promoting, the Trans-Pacific Partnership (TPP), cancelled his attendance at the summit because of the current US government shutdown over a Congress budget row. He is being represented at the summit by Secretary of State John Kerry.

Despite Obama's absence, twelve APEC members were expected to continue work on the pact, which the US president sees as underlining a US "pivot" towards Asia as a counterbalance to China's increased influence in the region.

The twelve members involved in the TPP talks on the sidelines of the APEC meeting are the United States, Australia, New Zealand, Japan, Singapore, Malaysia, Brunei, Vietnam, Chile, Canada, Mexico and Peru.

US Secretary of Commerce Penny Pritzker told reporters in Bali on Sunday that delegates had reached agreement on several thorny issues in the proposed pact. The US hopes to secure a deal on the TPP by the end of the year.

In addition to the countries listed above, other APEC members include China, Hong Kong, Indonesia, South Korea, Papua New Guinea, the Philippines, Russia, Chinese Taipei and Thailand.

tj/hc (dpa, AFP, AP)

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Foxconn Technology to Launch Indonesia Handset Operation in 2014

Jakarta Globe, Francezka Nangoy, October 7, 2013

Workers are seen inside a Foxconn factory in the township of Longhua in the
southern Guangdong province May 26, 2010. (Reuters Photo/Bobby Yip)

Nusa Dua. Taiwan electronics giant Foxconn Technology Group will conclude negotiations and establish a local subsidiary for its first Indonesian plant next year, the company announced on Monday.

The company, makers of Apple’s popular iPhone, first announced plans for an Indonesian factory in 2012. Foxconn then spent 18 months in negotiations with the Indonesian government and potential partners as it prepared to establish a local venture. Those negotiations are almost complete, Foxconn officials  told journalists at the Asia Pacific Economic Cooperation summit in Nusa Dua, Bali.

“In 2014 the company would have been registered and the negotiations will be done,” spokesman Simon Hsing said. “In 2014, you will see Foxconn coming.”

Chairman and CEO Terry Gou declined to name a local partner or specify the value of the project, saying only that the factory will be a “major investment,” in Indonesia and will likely include multiple domestic partners.

Erajaya Swasembada, a local handset distributor and manufacturer, has said it approached by Foxconn for a potential partnership. Djarum Group and property developer Agung Sedayu Group have also said they were in talks with the electronics company.

Foxconn declined to comment on the rumors.

“All I can say is that everyone is possible as long as they are qualified,” Hsing said.

The factory will use Indonesian-produced steel and tin and plans to make more than handsets, company officials said. It plans to establish a domestic supply chain for the products.

“We want to make sure that the infrastructure is here,” Gou said. “We came here not just to manufacture. We are making an entire supply chain in Indonesia.”

Gou and company said they planned to travel to Jakarta after the announcement.

“This is actually the reason I came [to APEC],” he said. “It is my first APEC [summit]. After APEC I will travel to Jakarta to meet our partners and also to talk to the government.”