Indonesia Economy Forum

[skyhigh88]

Tycoons, Tax Amnesty and its Achievement
The government is expecting many more conglomerates and wealthy individuals to take part in the second and third round of the tax amnesty program.

Posted On 03 Oct 2016
By: Leo Jegho
GIVnews.com

Minister of Finance Sri Mulyani with tycoons at a dinner at the State Palace a week before the 30 September deadline of the first round of the Tax Amnesty program. (Photo source: Kompas.com)

Jakarta, GIVnews.com – Indonesia has succeeded with the first phase of its tax amnesty program. Joined by more than 350,000 taxpayers, the redemption fees collected unexpectedly reached almost Rp 80 trillion in the closing minutes of the first period, which has ended on 30 September 2016. The total wealth that has been declared amounted to 3,500 trillion.

The 350,000 taxpayers included business tycoons, bureaucrats, politicians, artists, preachers, and ordinary people.

The Rp 80 trillion is around half of the Rp 165 trillion target to be achieved by the whole nine-month of tax pardon program, which will end on 30 March 2017. Meanwhile, total declaration target is set at Rp 4,000 trillion.

The first period of the amnesty program was set for 1 July -30 Sept 2016, with only two percent of the targeted wealth declared. The second period will be implemented on 1 October – 31 December 2016, with redemption charge of 3 percent. Finally, the third period of the program will run form 1 January to 30 March 2017, with pardon charge of 5 percent.

On the evening of 30 September, when visiting the Tax Directorate General office, President Joko ‘Jokowi’ Widodo and Minister of Finance Sri Mulyani Indrawati could not hide their feelings. The minister said the Rp 80 trillion was ‘encouraging’ while the President said it provided a “momentum for us to reform our tax system, increase our tax base and raise our tax ratio.”

It is widely perceived that the first achievement during the first period of the program was partly credited to the significant participation of business tycoons. Since the launching of the Tax Amnesty Program on 1 July 2016, the government had made ceaseless, all-out efforts to push large taxpayers to declare their wealth and pay amnesty fees. The Director General of Tax of the Ministry of Finance formed a special task force to approach ‘big fish’ taxpayers. Every day the task force’s staff members made phone calls to these individuals to remind them about the amnesty program. They told them that it was the last chance for them to get the cheapest tariff.

About a week before the 30 September deadline, President Jokowi invited a group of ‘super-rich’ taxpayers to a dinner at the State Palace. On the occasion, the President urged them to take part in the tax amnesty program. But, some of them requested the President to extend the 30 September deadline to the end of this December, which the President refused to do. He argued that the existing tax amnesty law disallows any deadline extension.

In the talks that took place at the State Palace, the two sides eventually agreed to not extend the first period of the tax amnesty program. This means that the taxpayers must declare their wealth by 30 September 2016. And, they also accepted the President’s decision to allow them to complete and submitted their amnesty dossiers until the end of this year provided that they would pay their amnesty fees by 30 September.

Minister Sri Mulyani with key members of the Indonesian Chamber of Commerce and Industry at the Tax Directorate General office on 27 September 2016. (Photo source: Kompas.com)

Shortly after the State Palace dinner, a rising number of conglomerate leaders went to tax offices to report their assets. They included Chandra Lie (Sriwijaya Air), Aburizal Bakrie (Bakrie Group), Anthoni Salim and Franky Welirang (Salim Group), Franky Wijaya (Sinarmas Group), and Djoko Susanto (Alfamart Group).

Meanwhile, a few days before the State Palace gathering, a number of tycoons had reported their wealth to the tax offices. Among them were Sofyan Wanandi (Gemala Group), James Riady (Lippo Group), Erick Tohir (Mahaka Group), and Garibaldi Thohir (Adaro Energy).

With this development, the government is expecting many more conglomerates and wealthy individuals to take part in the second and third round of the tax amnesty program.

http://www.globalindonesianvoices.com/28024/tycoons-tax-amnesty-and-its-achievement/

 

[Nike]

Electricity consumption up 7.85 percent: PLN
Senin, 3 Oktober 2016 08:11 WIB | 602 Views

Jakarta (ANTARA News) - The countrys electricity consumption in the first half of 2016 reached 107.2 Terra What hour (TWh), up 7.85 percent from 99.4 TWh in the same period in 2015, state-owned electricity company PLN said.

Senior Public Relations Manager of PLN Agung Murdifi said in a release here on Sunday that the consumption growth raised electricity sales revenue during the six months of 2016 by Rp3.2 trillion, or 3.15 percent, to Rp104,7 trillion over the same period in 2015 which amounted to Rp101,5 trillion.

"The Increased consumption is in line with the increase in the number of subscribers to 62.6 million in June 2016 or additional 1.4 million customers from 61.2 million subscribers at the end of 2015," he said.

The Increase in the number of customers, he added, also raised the national electrification ratio of 88.3 percent in December 2015 to 89.5 percent in June 2016.

Agung said operating expenses rose by Rp1.9 trillion (1.66 percent) to Rp119,7 trillion over the same period in 2015 which amounted to Rp117.8 trillion.

Meanwhile, fuel expenses (BBM) fell by Rp8.4 trillion to Rp10.4 trillion, due to the decline of fuel consumption by 0.6 million kiloliters to 2.2 million kiloliters until June 2016.

Realization of electricity subsidies in the first half of 2016 reached Rp26.6 trillion, down by Rp891 billion compared to the same period in 2015 amounting to Rp27.5 trillion.

Agung added that in the first half of 2016 the EBITDA (earnings before interest, taxes, depreciation and amortization) was recorded at Rp30,2 trillion, up 3.3 trillion compared to the same period in 2015 which amounted to Rp26.9 trillion.

"Net profit in the first half of this year reached Rp7,9 trillion," he said.

However, public accounting firm Tanudiredja, Wibisana, Rintis & Partners still awarded the PLN the qualified opinion rating for its June 2016 financial report.(*)

http://www.antaranews.com/en/news/107017/electricity-consumption-up-785-percent-pln

347,033 tax payers participate in tax amnesty program
Sabtu, 1 Oktober 2016 19:14 WIB | 951 Views

Jakarta (ANTARA News) - As many as 347,033 tax evaders have participated in the governments tax amnesty program in its period that lasted from July to Sept. 30, 2016, according to Tax Directorate General of the Finance Ministry.

The figure was obtained from a provisional data collected until 6pm local time on Friday, Hestu Yoga Saksama, spokesman of the Tax Directorate General said here, Friday evening.

Of the total number, 14,135 tax payers have obtained their Text Identification Numbers (NPWP) only after the tax amnesty program was carried out.

The number of Asset Declaration Letters (SPH) received from individuals reached 279,935 with total of redemption funds worth Rp77.4 trillion, and from corporation taxpayers reached 72,064 letters, with redemption funds amounting Rp9.54 trillion.

Up to the end of the first period, the majority of tax amnesty applicants were individual tax payers of non-Small and Medium Scale Enterprises (SMEs) with an averaged redemption funds worth Rp331 million.

Total redemption funds worth Rp86.9 trillion were collected until at 6pm local time from the total declared assets reaching Rp4.516 trillion.

Of this, Rp2.444 trillion are domestic declared assets (69.5 percent), Rp937.1 trillion are overseas declared assets (16.6 percent), and repatriated funds Rp135.4 trillion (3.9 percent).

The largest amount of repatriated funds came from Singapore, amounting to Rp77.4 trillion, followed by Cayman Islands Rp16.5 trillion, Hong Kong Rp14 trillion, China Rp3.6 trillion and British Virgin Islands Rp2.3 trillion.

A majority of overseas declared assets were recorded in Singapore, amounting to Rp631.1 trillion, followed by British Virgin Island Rp71.7 trillion, Cayman Islands Rp52.5 trillion, Hong Kong Rp37.9 trillion and Australia Rp32.1 trillion.

The largest part of the declared assets was cash or equal to cash worth Rp1,080.3 trillion, investment and securities worth Rp993.8 trillion, land, buildings and immovable property Rp528.9 trillion, accounts and reserves Rp446.8 trillion, and precious metals, valuables and other movable assets Rp136 trillion.

Personnel of the Tax Directorate General will evaluate the implementation of the tax amnesty program and will improve the services in the next periods.(*)

http://www.antaranews.com/en/news/107008/347033-tax-payers-participate-in-tax-amnesty-program

Sejumlah pekerja tengah menyelesaikan proyek bawah tanah angkutan cepat terpadu atau Mass Rapid Transit (MRT) Jakarta pada 8 September 2016.

Proses pembangunan tahap I proyek MRT Jakarta telah dimulai pada tanggal 10 Oktober 2013 dan diperkirakan selesai pada tahun 2018

Sejumlah pekerja berjibaku dengan waktu guna membangun jalur bawah tanah proyek MRT di jantung Ibu Kota.

Setiap hari adalah malam bagi sebagian pekerja bawah tanah proyek MRT

Jalur MRT Jakarta akan membentang sepanjang 110 km, yang terdiri dari Koridor Selatan–Utara (23,8 km) dan Koridor Timur–Barat (87 km).

Dengan pencahayaan seadanya, para pekerja proyek MRT tak hanya harus berpacu dengan waktu tetapi juga diintai sejumlah risiko.

Pembangunan tahap I dimulai dengan membangun jalur MRT sepanjang 15,7 km dari Lebak Bulus hingga Bundaran Hotel Indonesia.

 

[Nike]

Bayangan pekerja proyek MRT memantul di dinding jalur bawah tanah proyek MRT Jakarta

Sejumlah mandor dan arsitek proyek MRT Jakarta berdiskusi di depan bor raksasa di bawah tanah Ibu Kota.

Pembangunan tahap I untuk koridor Lebak Bulus-Bundaran Hotel Indonesia akan terdiri dari tujuh stasiun layang dan enam stasiun bawah tanah.

MRT Jakarta akan menggunakan kereta rel listrik produksi Sumitomo Corporation, Jepang.

Pembangunan tahap II akan melanjutkan jalur MRT Selatan - Utara sepanjang 8,1 km, dari Bundaran HI sampai dengan Kampung Bandan.

Sejumlah pekerja tengah menyelesaikan proyek bawah tanah angkutan cepat terpadu atau Mass Rapid Transit (MRT) Jakarta pada 8 September 2016

 

[Nike]

 

[Nike]

Ministry promotes Indonesian tourism in four French cities
Senin, 3 Oktober 2016 17:28 WIB | 297 Views

Photo illustration of Wonderful Indonesia promotion in Europe. (ANTARA/Zeynita Gibbons)

London (ANTARA News) - The Indonesian Tourism Ministry and the Visit Indonesia Tourism Officer (VITO) in Paris is promoting Indonesian tourism under a brand entitled "Wonderful Indonesia" during a tourism campaign in four cities in France, Lyon, Toulouse, Nantes and Paris.

VITOs Head, Eka Moncarre, in a statement received by ANTARA News here on Monday, said the programs were carried out from September 26 - 30, 2016.

According to Moncarre, the tourism roadshow applied the 3-S strategy of Solid, Speed and Smart ways.

During four days, she added, the Sales Mission Delegation, VITO team and 16 Indonesian tour businesses travelled around France by bus, which was decorated with the Wonderful Indonesia logo and pictures describing several tourist sites, such as Rajam Ampat (Papua), Mount Bromo (East Java) and Borobudur Temple (Central Java).

The tourism business companies participating in the promotion tour were Smailing Tours and Travel, Adventure Indonesia, Panorama Tours, Asya Tour Ternate, Caraka Travelindo, and Garuda Indonesia Holiday France.

In addition, there were several hotel representatives, including Nusa Dua Beach Hotel, the Mulia Hotels Group, Como Shambala Hotels, Royal Pita Maha Hotel Group, Sense Hotels Seminyak, Batik Hotel from Ternate (North Maluku) and Anema Resort from Lombok (West Nusa Tenggara).

The travel agents in Lyon, Toulouse, Nantes and Paris were enthusiastic about this program, as it is the first time an Indonesian team has come to their cities.

The roadshow allowed sellers, travel agents and buyers to meet while sharing a table, as buyers received information directly from the tour industries, and the Indonesians could sell their products directly to travel agents.

On average, every seller participated in 40-50 meetings in three hours in each city.

Indonesia is increasingly recognized in France, and this will encourage travel agents in France to sell Indonesian tours more aggressively.

The second roadshow is planned for next year, visiting more cities in France and neighboring countries.

Videos that cover the roadshow will be released and shared with the industry in France and Indonesia.
(Uu.KR-LWA/INE/KR-BSR/O001)

http://www.antaranews.com/en/news/107022/ministry-promotes-indonesian-tourism-in-four-french-cities

Slum Dwellers Challenge Eviction Law in Landmark Case

Jakarta. Evicted residents of "illegal" slums in the capital have launched a landmark legal case to challenge a decades-old law which has been used to forcibly remove thousands of families, amid a wave of evictions in Jakarta.

The case comes as authorities ramp up efforts to clear housing along a main river bank in Jakarta, the sprawling capital of 10 million people, to pave the way for an ambitious flood mitigation project.

Local residents have asked the court to declare a law enacted in 1960 as unconstitutional as it "gives the government a great authority to take the land from the people" without due consultation, court documents show.

"I see more and more people suffering like me. This is wrong, this is inhumane," said Mansur Daud who was evicted last year from a slum in West Jakarta to make way for the project.

The 54-year-old hawker launched the legal challenge with two others this week, saying they want justice to be upheld.

"There was no dialogue, no compensation. I have to live at my parents' house now, my children were traumatized by the eviction, where is the justice?" he told the Thomson Reuters Foundation on Friday.

The 1960 law prohibits the use of land without permission from the rightful owner, but land rights advocates argue it has long been invoked in favor of the authorities.

Lawyer Alldo Fellix Januardy said the law unfairly targets slum dwellers and the poor who cannot provide proof of land ownership, due to a legacy of unclear and overlapping land titles, as well as bureaucracy in Indonesia.

However he said this was exacerbated by the fact that the law does not require the government to provide the same proof of title when it is used to evict the residents.

"The problem with land evictions in Indonesia is that nobody has a [land ownership] certificate," said Januardy, who specializes in land rights cases and represents the slum dwellers.

"If nobody has a certificate, then the court should be the one to decide whose land it is but the government never sends cases to court, they just evict people because of this law.

"If we win the case, every forced eviction must be decided through the court before it happens," the lawyer added.

The Constitutional Court has yet to fix a date to start hearing the case.

The Jakarta city government has defended its move and vowed to push ahead with the evictions despite criticism.

Governor Basuki "Ahok" Tjahaja Purnama said the project was necessary to prevent annual floods during monsoon season and alternative housing had been provided to those affected.

According to the Jakarta Legal Aid Institute, which has been helping evicted families, there were 113 forced evictions last year, with each round typically involving many dwellings. A total of 8,145 families and 6,283 small businesses were affected in 2015, the group said.

Another 325 evictions were set to take place this year, the institute said, citing the government's planning documents.

The latest round of eviction took place on Wednesday, which saw bulldozers demolish a waterfront shanty town in Jakarta. It went without protest but past evictions have sometimes resulted in violence.

In August last year, security forces fired teargas and water cannon after they clashed with residents while clearing a flood-prone area in the capital, with 27 people arrested.

Thomson Reuters Foundation
http://jakartaglobe.beritasatu.com/news/slum-dwellers-challenge-eviction-law-landmark-case/

All Smiles for Manufacturing Sector as Orders Flood In From Europe

Jakarta. Indonesian manufacturers are raking it in this month thanks to a bump in new orders, according to the Nikkei Indonesia Manufacturing purchasing managers' index survey.

The index, also called the PMI — a composite index measuring manufacturing output, new orders, export and employment measures to give a snapshot of manufacturing business condition, inched up to 50.9 in September, up from 50.4 in August.

"According to PMI data, total new orders rose for the second straight month, while export demand posted its strongest upturn in nearly four years," Pollyanna De Lima, an economist at Markit, said in a statement on Monday (03/10).

Any reading above 50 indicates an overall increase, below 50 an overall slump.

The survey showed manufacturers were eager to increase their output due to higher demand from both local and international clients. Panelists made mention of demand from Europe as a key source of new work.

The manufacturers had to content with pricier raw materials in September, which increased cost. However, they were also able to command higher prices — albeit modestly — for their products in September.

"Many companies seem to be trying to preserve their profit margins, with factory gate charges being raised in response to higher cost burdens," De Lima said.

Employment and buying level increased moderately, ending two consecutive months of falling payroll numbers.

According to De Lima, the overall situation in the manufacturing sector "looks encouraging" even if it has not yet establish a strong footing.

De Lima also pointed out that Bank Indonesia's — the central bank — decision to cut its benchmark interest rate by 25 basis points to 5 percent in September will likely boost growth in the sector even further.

http://jakartaglobe.beritasatu.com/business/smiles-manufacturing-sector-orders-europe-flood/

Indonesia's Manufacturing Sector Sees Growth in August

Jakarta. Indonesian manufacturers increased their output on the back of demands from new businesses in August, pulling the sector back into the growth territory following a slump in July, the Nikkei Indonesia Manufacturing purchasing managers' index survey revealed on Thursday (01/09).

"The return of growth in Indonesia’s manufacturing sector in August is a positive sign," Pollyanna De Lima, an economist at Markit, said in a statement.

The PMI — a composite of manufacturing output, new orders, exports and employment measures — inched up to 50.4 in August, compared to 48.4 in July.

A reading above 50 indicates a increase in overall manufacturing activity and, inversely, index of below 50 reflects decline.

Besides output, export orders also increased in August, ending 22 months of contraction, the report said. At the same time, raw material stock and semi-finished goods increased in August, reversing its drop in July.

The report said pre-production inventories "rose at a moderate pace" that was "the quickest in over two years," as manufacturers sought to secure stock, expecting higher prices for materials like metals, chemicals, textiles, plastic and paper.

Manufacturers had slight relief as factory gate charges — the cost of manufacturing goods, including labor, raw material, energy, and other indirect costs including loan interest rates, maintenance or rent — decreased for the first time in the history of the survey, indicating an increasingly competitive environment.

The Central Statistics Agency (BPS) reported that the country's annual inflation rate rose by 2.79 percent in August, compared to 3.21 in July. The country's core inflation — which excluded administered and volatile food prices — rose by 3.32 percent annually in the period, compared to 3.49 percent previously.

The survey data is also a reflection of local companies' concerns about the short-term outlook for new opportunities and production. This is highlighted by a reduction in payroll numbers which was the fastest this year, De Lima explained.

Indonesia's gross domestic product will likely accelerate to 5.1 percent this year, compared to 4.8 percent in 2015, on the back of lowered interest rates that support private consumption, De Lima predicted.

http://jakartaglobe.beritasatu.com/business/indonesias-manufacturing-sector-sees-growth-august/

 

[Nike]

Indonesia's Foreign Tourist Arrivals Rise 16% in August

Jakarta. Indonesia attracted 944,455 foreign tourists in August, up 16 percent from a year earlier, the statistics bureau said on Monday (03/10).

The rate of growth slipped from 20 percent in July.

The total number of visitors in August, including those passing through Indonesia's borders from neighboring countries and foreign workers with permits for less than one year, was 1.03 million, up 13 percent from a year ago.

Indonesia has been attracting growing numbers of Chinese visitors.

The government wants to expand tourism to help reduce the economy's reliance on exports of raw commodities.

It aims to attract 20 million visitors a year by 2019, more than double last year's 9.73 million.

Reuters

http://jakartaglobe.beritasatu.com/business/indonesias-foreign-tourist-arrivals-rise-16-august/

 

[Kalazan]

Pembangkit Minyak Gas Timika Dikerjakan Awal 2017

Pekerja melakukan perawatan di Unit Pembangkitan Muara Karang PT PJB (Pembangkit Jawa Bali) di kawasan Pluit, Jakarta, 10 Agustus 2016. Kapasitas tersebut guna memasok listrik di wilayah VVIP seperti Istana Negara, Gedung MPR/DPR. Tempo/Tony Hartawan

TEMPO.CO, Jakarta - PT PLN (Persero) berkomitmen memulai pembangunan proyek Pembangkit Listrik Tenaga Minyak Gas (PLTMG) Timika, Papua, pada awal 2017.

Manajer PLN Area Timika Salmon Karet di Timika, Senin, 3 Oktober 2016, mengatakan PLN telah mencapai kesepakatan dengan Pemerintah Kabupaten Mimika untuk merealisasikan pembangunan PLTMG Timika. "Komitmen pemda Mimika dengan PLN sudah sama, yaitu PLTMG Timika harus mulai dikerjakan pada awal 2017. Kami sudah sepakat lokasinya di kawasan Pelabuhan Paumako," kata Salmon.

Guna merealisasikan hal itu, Bupati Mimika Eltinus Omaleng sudah menandatangani surat izin prinsip penetapan lokasi pembangunan PLTMG Timika.

Pembangunan PLTMG Timika yang direncanakan mencapai 50 megawatt akan dilakukan secara bertahap. Tahap awal, PLTMG akan mampu menyuplai daya listrik ke Kota Timika sebesar 10 megawatt. "Tahap awal tahun depan 10 megawatt harus masuk ke PLN. Nanti sisanya 40 megawatt akan menyusul," ujarnya.

Menurut dia, pembangunan PLTMG Timika tersebut penting dan strategis guna mendukung percepatan pembangunan ekonomi di kawasan Timika dan sekitarnya. Di samping itu, perkembangan pembangunan di Timika yang makin pesat menuntut adanya ketersediaan daya listrik yang memadai. Apalagi Timika merupakan salah satu kota penyelenggara Pekan Olahraga Nasional (PON) pada 2020 yang berlangsung di Provinsi Papua.

"Kami akan melakukan pembicaraan lebih intensif dengan pihak Pemkab Mimika untuk menuntaskan semua hal teknis, seperti izin lokasi, pembebasan lahan, dokumen perizinan bidang lingkungan, kehutanan, rencana tata ruang wilayah, dan lainnya, sehingga pembangunan PLTMG Timika nantinya tidak menemui hambatan di lapangan," tuturnya.

PLN Timika masih mengandalkan pembangkit diesel untuk menyuplai listrik ke warga di wilayah itu. Pelanggan PLN Timika sampai saat ini tercatat lebih dari 43 ribu pelanggan. PLN Area Timika juga membawahkan Kabupaten Asmat dan Kabupaten Nduga. Sedangkan dalam waktu dekat, Kabupaten Yahukimo juga akan berada di bawah naungan PLN Area Timika (direlokasi dari PLN Area Jayapura).

Dinas Energi dan Sumber Daya Mineral Mimika telah memfasilitasi penetapan lokasi pembangunan PLTMG Timika di kawasan Pelabuhan Paumako, Distrik Mimika Timur. Kepala Dinas ESDM Mimika Dionisius Mameyau mengatakan PLN akan memberikan ganti rugi pembebasan lahan seluas 11 hektare kepada warga pemilik lahan ulayat.

"PLN harus segera tindak lanjut dengan pembebasan lahan dan membayar sesuai dengan hak-hak masyarakat atas kawasan itu. Sosialisasi akan dilakukan mulai pekan ini," ucapnya.

tempo.co

 

[skyhigh88]

Jack Ma in Indonesia Shows ‘Explosive’ Online Sales Growth
Bloomberg News
October 4, 2016 — 5:00 AM SGT Updated on October 4, 2016 — 8:39 AM SGT

Jack Ma. Photographer: Andrey Rudakov /Bloomberg

• E-commerce may account for 7% to 8% of retail market by 2020
• McKinsey says Indonesia’s urban consumers to reach 86 million

In a testament to the rising consumer potential of the world’s No. 6 emerging market, Indonesia’s President Joko Widodo has tapped for guidance the king of Chinese e-commerce: Jack Ma.

Jokowi, as Indonesia’s leader is known, further intensified the buzz surrounding his country’s $2 billion e-commerce market with a stop at Jakarta’s sprawling Mangga Dua bazaar last month, buying an iPad from a store belonging to web retail giant Bhinneka.com.

Indonesia has an e-commerce market that McKinsey & Co. says can be one of the fastest-growing in the world, part of a digital economy adding $150 billion a year to gross domestic product by 2025. All the more reason for Jokowi to turn to Ma, founder of Alibaba Group Holding Ltd., to advise his administration on how to supercharge online retailing in the country.

“It does have that potential and I think that part of it boils down to also Indonesia, as a culture, being incredibly consumptive,” said Adrian Li, managing partner of Convergence Ventures, which backs early-stage tech startups in Indonesia. “By some estimates, for example, you’ve seen Indonesia and the adoption of e-commerce grow even faster than some of the peers in China.”

Indonesia’s urban consuming class -- individuals with disposable income of more than $10 a day -- is growing by about 5 million a year to reach 86 million by 2020 amid rapidly expanding access to the Internet, according to McKinsey. Online sales could reach 7 percent to 8 percent of the total retail market by 2020 from about 1 percent currently, it estimates. The central bank projects e-commerce transactions will almost double to $4.6 billion this year.

‘Explosive Growth’

Southeast Asia’s biggest economy with a population of 255 million is experiencing “explosive growth,” said Ali Potia, a Singapore-based partner with McKinsey and head of the company’s Asia Consumer Insights Center. The value of e-commerce could increase by as much as $15 billion over the next three years alone, the company estimates.

Jokowi turned to Alibaba’s Ma after touring the company’s headquarters in Hangzhou, China in early September. He told his ministers last week that Indonesia could become the biggest digital economy in Southeast Asia and he is “ordering that implementation be accelerated because if it’s done not immediately, then we will be left behind.”

Ma has already established a foothold in Indonesia, where 100 million people are hooked up to the Internet -- a figure growing at a rate of more than 10 percent a year -- and 40 percent of mobile users have a smartphone. Alibaba made its biggest overseas acquisition in April with a $1 billion investment in the online emporium Lazada Group SA, which is based in Singapore and sells clothes and electronics in six Southeast Asian nations.

Online Retailing

Go-Jek is another example of the transformative nature of e-commerce. Starting out as a ride-hailing app, it now offers vendor-to-door delivery of everything from concert and movie tickets to massages and even pedicures and cream baths via its “Go-Glam” button.

“If you look at where Go-Jek is today -- bear in mind this is a company that’s less than three-years-old -- the number of deliveries and transactions it’s able to do per month, that’s also significant,” said Convergence Ventures’ Li. “Again, it’s on par with some of the fastest-growing startups you’ve seen in China.”

Unlike the U.S., Li added, and similar to China about a decade ago, traditional retailers in Indonesia don’t have a national footprint where people in smaller cities can purchase the types of goods and services others can buy in the major metropolitan areas of Jakarta or Surabaya.

Infrastructure Challenge

“With the penetration of e-commerce they now are able to buy those things,” he said. “Increasingly we see with large branded retailers coming online -- Alibaba purchasing Lazada, Matahari Mall, JD.com -- people become more and more comfortable with transacting online. There is less and less of a trust issue.”

Still, challenges remain, particularly with infrastructure. The archipelago of more than 17,000 islands lacks reliable electricity supply and warehousing facilities, while poor road, rail and air networks hamper transportation, driving up costs and delaying delivery of goods and services.

Jokowi has made infrastructure investment key to his economic program as he seeks to boost growth to 7 percent during his term. The government is forecasting expansion of about 5 percent for this year.

E-commerce growth is also restricted because of low credit-card and technology usage. Internet penetration in 2015 was just 34 percent, according to McKinsey.

“E-commerce operators in Indonesia will need to sharpen their focus on building sustainable, cost efficient operations that have a clear path to profitability,” said McKinsey’s Potia. “This will require other parts of the ecosystem -- such as logistics, payments, mobile Internet -- to keep up as well.”

— With assistance by Thomas Kutty Abraham

http://www.bloomberg.com/news/articles/2016-10-03/singapore-millionaire-77-joins-bondholders-uniting-in-workouts

 

[skyhigh88]

Home > Oil > Indonesia’s Refinery Buildup To Hit Asia’s Oil Product Exporters: Fuel For Thought
Indonesia’s refinery buildup to hit Asia’s oil product exporters: Fuel for Thought
October 3, 2016 11:00 UTC
S&P Global
Platts

Backed by top oil producers Saudi Arabia and Russia, Indonesia’s refining sector development has finally picked up pace and this does not bode well for Asia’s oil product exporters.

Indonesia is the region’s largest gasoline and gasoil importer. The country has been notorious for planning a spate of refining projects over the last two decades with no result. Indonesia last built a new refinery in 1994.

But momentum has picked up since late 2015 when President Joko Widodo signed a decree declaring the upgrade and expansion of the refining industry a top national priority. The decree ensures refining projects enjoy benefits such as preferential tax rates and easy access to land.

The decree has given Indonesia’s state-owned energy company Pertamina the ammunition it needs to go all out and get partners for refining projects.

Pertamina and Saudi Aramco in May this year awarded the engineering and project management services contract for the upgrade of the Cilacap refinery, Indonesia’s largest.

The Cilacap upgrade will hike its total nameplate processing capacity to 370,000 b/d from 348,000 b/d by late 2022. The two companies are also in talks to upgrade and expand the 170,000 b/d Dumai refinery and 125,000 b/d Balongan refinery but details are still to be finalized.

Pertamina is, meanwhile, pursuing a revamp and expansion of the 260,000 b/d Balikpapan refinery and plans to boost its capacity by 100,000 b/d by late 2019.

The state-owned company has also joined hands with Russian state oil giant Rosneft to build a 300,000 b/d greenfield refinery in Tuban, East Java. This refinery is expected to be ready by end-2021.

For Saudi Arabia and Russia, the refinery deals with Indonesia give a boost to their market share at a time of intense competition. Aramco is expected to supply 260,000-270,000 b/d of crude to the refurbished Cilacap refinery and Rosneft will supply 45% of the crude to the Tuban refinery.

In addition to Tuban, Indonesia is planning another 300,000 b/d greenfield refinery in Bontang, and is seeking partners for this project.

Based on current data on refining projects, Indonesia’s refining capacity will go up from 1.02 million b/d to 1.75 million b/d in the next 10 years, excluding possible expansions at Dumai and Balongan.

According to the Pertamina CEO Dwi Soetjipto, the company is targeting capacity of 2.3 million b/d by 2025, including domestic plants and stakes in overseas projects.

Though the country has a refining capacity of over 1 million b/d, the fact that these plants are several years old makes it impossible for PERTAMINA to operate them at full hilt, leaving a big gap between supply and demand.

The refineries operate at around 800,000 b/d, and Indonesia imports another 800,000 b/d of oil products to meet full demand.

Based on Pertamina’s projection of 3%-4% annual growth in oil demand, the company expects the country to become self-sufficient in refined products once all the projects are onstream, and may even have surplus products available for export if oil-to-gas conversion proceeds in the transport sector.

So where does that leave exporters?

Exporters of gasoline have already lost some of their market after Indonesia brought online in October last year a residue fluid catalytic cracker at the Cilacap refinery and restarted a 98,000 b/d condensate splitter at the TPPI petrochemical complex.

And things are only likely to get tougher.

According to latest data from Statistics Indonesia, the country imported 7.04 million mt of gasoline over January-July 2016, down nearly 19% from 8.65 million mt in the same period last year.

Gasoil imports have fallen 8.4% year on year to 2.54 million mt. Gasoline and gasoil account for 70% of Indonesia’s total oil product imports.

China exported 578,393 mt of gasoline to Indonesia in the first eight months of 2016, down nearly 29% year on year. South Korea exported 11.74 million barrels of oil products to Indonesia in the first eight months of 2016, down 47% from 22.06 million barrels in the same 2015 period.

Pertamina is certainly not worrying about excess refining capacity in the region. For Soetjipto, Indonesia’s refining capacity target is a strategic move.

His logic is straightforward. Indonesia is a big demand center and by having its own refineries, Pertamina has control over products supply.

“When we import, that is controlled by others. We have no control over crude supply — why not have as much control as possible over products supply?”

Mriganka Jaipuriyar, Associate editorial director
Associate editorial director, Asia & Middle East oil news and analysis
http://blogs.platts.com/2016/10/03/indonesia-refinery-buildup-to-hit-product-exporters/

 

[skyhigh88]

THE WALL STREET JOURNAL
MARKETS
Indonesia’s Tax Amnesty Casts New Shadow on Singapore
Billions in withdrawals come on heels of reputational ‘dent’ caused by 1MDB scandal

A man waiting on Friday to register for the Indonesian government's tax amnesty (amnesti pajak) program at a branch of the tax office in Jakarta.

PHOTO: REUTERS
By JAKE MAXWELL WATTS
Updated Oct. 3, 2016 9:47 p.m. ET

SINGAPORE—A tax amnesty in Indonesia that has pulled billions of dollars in undeclared money out of Singapore is refocusing attention on the challenge facing the city-state as it tries to expand its business as private banker to wealthy Asians while safeguarding its reputation for good governance.

Some $10.5 billion in previously undeclared assets has been repatriated to Indonesia in the past three months, the country’s tax office said, out of an estimated $273 billion stashed overseas.

More than half the amount collected—57%—came from Singapore, it said.

The revelation comes on the heels of regulatory action and criminal investigations of employees at banks in Singapore that were drawn into the 1Malaysia Development Bhd. financial scandal in Malaysia. The managing director of the Monetary Authority of Singapore, which acts as central bank and financial regulator, said in July that the case was “a dent in our reputation as a clean and trusted financial center.”

Prominent bankers and lawyers say privately that more such embarrassments could be in store as Singapore’s financial system becomes increasingly reliant on private wealth.

“This is an occupational hazard of major financial centers,” said Nizam Ismail, a partner and specialist in compliance at RHTLaw Taylor Wessing LLP.

Policing a financial sector with so many foreign clients is challenging. The intergovernmental Financial Action Task Force, which sets global standards on combating money laundering and terrorist financing, said last week that Singapore hadn’t prosecuted as many cases of cross-border money laundering as would be expected given its risk profile.

Singapore authorities said in response that they would more proactively target and pursue such cases and remained committed to further strengthening the country’s anti-money-laundering efforts. The central bank created a dedicated unit this year to work with police on suspected cases.

“Singapore has always recognized that our status as a trade and financial hub in the region brings with it increased risks of money laundering,” the bank said Monday, adding that it strongly supported global efforts to fight the problem.

Singapore is home to the regional investment-banking and private-wealth-management operations of many large Western banks, including Credit Suisse AG., Citigroup Inc., Deutsche Bank, and J.P. Morgan Chase & Co. Assets under management grew 30% to nearly $1.8 trillion in 2014, according to central bank figures.

Much of that money comes from wealthy foreigners, drawn by its strong rule of law, respect for banking secrecy and low tax rates. As of 2014, Singapore banks held $1.1 trillion in offshore private wealth, according to the Boston Consulting Group.

Switzerland, where a similar model has come under intense pressure from U.S. and European authorities in recent years, is still the leader, with $2.7 trillion in such assets. But Boston Consulting Group has forecast that offshore wealth would grow 8.1 % annually over the next five years in Singapore, compared with 3.9% annually for Switzerland.

Singapore has signed up to an increasingly strict international code of conduct on anti-money-laundering and tax-evasion regulation, including an agreement requiring more than 100 jurisdictions—including Malaysia and Indonesia—to automatically share information on accounts and taxpayers covered starting next year.

Indonesia’s tax amnesty, which has six more months to run, offers reduced penalties for those who come clean. As of Friday, the last day for the best terms, $6.7 billion in penalties has been collected, results Finance Minister Sri Mulyani Indrawati called “very encouraging.”

Ong Ai Boon, director of the Association of Banks in Singapore, has welcomed Indonesia’s amnesty “as an opportunity for clients to regularize their tax affairs.”

The biggest blow to Singapore’s reputation has come from the alleged misappropriation of billions of dollars from 1MDB, much of which passed through Singapore’s banking system, according to court records, documents viewed by The Wall Street Journal and people familiar with the probes. The fund has denied wrongdoing and said it would cooperate with any lawful investigation.

In May, Singapore revoked the local license of a Swiss private bank, BSI SA, and asked prosecutors to investigate six senior employees for possible criminal misconduct. BSI said at the time it was cooperating with authorities in Singapore and Switzerland.

In July, officials cited three other banks for weakness in anti-money-laundering efforts. Singapore’s financial regulators, like those elsewhere, rely on banks to report suspicious activity by clients and to know the beneficial owners of accounts.

“Banks in Singapore are committed to continuously strengthen the implementation of systems and controls to mitigate money laundering and terrorism financing risks,” Ms. Ong said.

—I Made Sentana in Jakarta contributed to this article.
Write to Jake Maxwell Watts at jake.watts@wsj.com

http://www.wsj.com/articles/indonesias-tax-amnesty-casts-new-shadow-on-singapore-1475528404

Hiding money in Singapore will not be as easy and comfortable as before.. Indonesia should prepare our own "special tax zones" to attract more funds

 

[skyhigh88]

September 30, 2016

October 5, 2016

 

[Nike]

BI proposes LPG and electricity tariff hike
Rabu, 5 Oktober 2016 10:56 WIB | 821 Views

Jakarta (ANTARA News) - Bank Indonesia has proposed a rise in the prices of liquefied petroleum gas (LPG) in 3-kg cylinders and electricity tariffs in 2016 instead of 2017, citing low inflation rate as a reason.

The low inflation rate has opened a room for the government to raise the prices of LPG in 3-kg cylinders and electricity tariffs this year, Deputy Director of the Bank Indonesia Monetary Economic Policy Department Noor Yudanto said in a statement released on Tuesday.

"The prices can be raised this year when the inflation rate is low. But it is fully up to the government to do so by involving the DPR (the House of Representatives)," he said.

The increase in the prices of LPG in 3-kg cylinders and electricity tariffs will contribute 0.8 percent to the inflation rate, he said.

BI has come up with the proposal as it acts a regulator in the monetary field and that it is obliged to give inputs to the government particularly with regard to the government-administered prices, he said.

"The proposal is also aimed at preventing price hike from burdening the public," he said.

The Central Statistics Agency (BPS) said earlier the year-to-date inflation rate stood at 1.97 percent in September 2016.(*)

http://www.antaranews.com/en/news/107054/bi-proposes-lpg-and-electricity-tariff-hike

 

[Nike]

Pengoperasian Rusun Rawa BebekDua bocah bermain di sekitar Rusun Rawa Bebek di Jakarta Timur, Kamis (6/10/2016). Keberadaan rusunawa tersebut diharapkan mampu mengatasi kebutuhan tempat tinggal bagi warga yang tergusur karena normalisasi Sungai Ciliwung atau program Pemprov DKI Jakarta. (ANTARA FOTO/Reno Esnir)

Rusun TKI NunukanPekerja sedang menyusun batako di halaman rumah susun (rusun) yang terletak di Jalan Ujang Dewa, Nunukan Selatan, Nunukan, Kalimantan Utara, Rabu (5/10/2016). BNP2TKI menyatakan renovasi rusun yang akan dijadikan penampungan TKI yang dideportasi pemerintah Malaysia melalui Kabupaten Nunukan tersebut direncanakan rampung pada Desember 2016 dengan menggunakan dana APBN. (ANTARA FOTO/M Rusman)

Luhut, Arcandra to discuss Masela block in Japan
Selasa, 4 Oktober 2016 21:51 WIB | 913 Views

Jakarta (ANTARA News) - Indonesias Acting Minister of Energy and Mineral Resources (ESDM), Luhut Binsar Panjaitan, plans to take along former ESDM minister Arcandra Tahar during his tour of Japan to discuss the Masela oil block business deal.

Arcandra, who was discharged as ESDM minister last August for having dual citizenship, attended a function held to commemorate the anniversary of the Energy and Mineral Day, at the ESDM office here on Tuesday.

Luhut stated that he will take along the former minister on his visit to Japan because Arcandra had played a role in the Masela Block project by ensuring efficient investment. He was involved in an open discussion with the investors.

"Regarding the Masela Block, I will ask Arcandra to accompany me because he has sound knowledge and can explain the issue directly (to the Japan side)," Luhut stressed.

Luhut, also the Coordinating Minister for Maritime Affairs, said he will be visiting Japan following a request by President Joko Widodo (Jokowi). In Japan, the minister will meet Japan's prime minister and a number of ministers.

He assured that progress will be made on the request received from the Masela Block contractor, Inpex, for exploiting the oil and gas reserves in the area.

"Everything is in progress as of now and negotiations were on," Luhut noted, but did not delve into details regarding the negotiations.

Luhut explained that during his visit to Japan, he will discuss investment opportunities available to the Japanese investors.

He reiterated that following the success of the tax amnesty program, the funds that have been repatriated could be utilized to develop the infrastructure.

"The government does not want a situation in which only state companies (BUMN) take part in the infrastructure project. Instead, it also wants the private sector to participate. It is in this context that we will be providing certain opportunities to Japan," he elaborated.

One of the projects that the government agreed to offer to Japan concerns the development of the Patimban Port of Subang. This will support the efforts to make the Tanjung Priok Port an international seaport.

"Last night, the president asked that Japan be given the opportunity to build the Jakarta-Surabaya high speed train, or other ports or electricity projects," he disclosed.

Luhut will also explore cooperation in the maritime sector. "We are considering Indonesia-Japan maritime cooperation which has a wide scope. After all, we have extraordinary maritime resources," he concluded.(*)

http://www.antaranews.com/en/news/107048/luhut-arcandra-to-discuss-masela-block-in-japan

Peningkatan Penumpang PesawatSejumlah penumpang pesawat berada di kawasan terminal domestik Bandara I Gusti Ngurah Rai, Bali, Jumat (7/10/2016). PT Angkasa Pura I (Persero) Cabang Bandara Internasional I Gusti Ngurah Rai mencatat hingga bulan September 2016 jumlah penumpang yang melaluibandara tersebut meningkat sekitar 16 persen dibanding periode yang sama tahun 2015 dari 12,7 juta meningkat menjadi 14,8 juta penumpang. (ANTARA/Fikri Yusuf)

Peningkatan Penumpang PesawatPesawat udara melakukan pendaratan di Bandara I Gusti Ngurah Rai, Bali, Jumat (7/10/2016). PT Angkasa Pura I (Persero) Cabang Bandara Internasional I Gusti Ngurah Rai mencatat hingga bulan September 2016 jumlah penumpang yang melalui bandara tersebut meningkat sekitar 16 persen dibanding periode yang sama tahun 2015 dari 12,7 juta meningkat menjadi 14,8 juta penumpang. (ANTARA /Fikri Yusuf)

 

[papacita]

Indonesia offers Japan Jakarta-Surabaya rail project

Indonesia has officially offered Japan the opportunity to take part in the semi high-speed rail construction project connecting Jakarta to Surabaya in East Java, a senior minister said.

Coordinating Maritime Affairs Minister Luhut Binsar Pandjaitan delivered the official letter offering the project to the Japanese government during his working visit to Tokyo on Friday, according to a statement released by the ministry's office.

"Personally, I am sure Japanese technology is suitable for this project," he said in the statement released on Friday. The semi high-speed railway would have trains running between 180 and 200 kilometers per hour and would shorten the travel time between Jakarta and Surabaya to 3.5 hours, Luhut added.

The government planned a double track railway so that it could be utilized to support the transfer of containers in dry port between Jakarta, Semarang and Surabaya.

Should Tokyo accept the offer to work on the project, Luhut further said he hoped that Japan would implement technology transfers with Indonesia and comply with the country's regulations that prioritized the use of Indonesian-made products.


Indonesia Doubles the Size of Its Currency Swap Deal With Japan

Indonesia and Japan have extended a bilateral currency swap agreement that provides an additional buffer for Southeast Asia's largest economy to stabilize its currency.

Bank Indonesia Governor Agus D.W. Martowardojo, Finance Minister Sri Mulyani Indrawati and Japanese Finance Minister Taro Aso signed the agreement on the sidelines of International Monetary Fund and World Bank annual meeting in Washington, D.C., on Friday (07/10).

"This cooperation indicates the commitment of both authorities to maintain regional financial stability amidst the lingering uncertainty in the global financial market," Agus said in a statement on Saturday.

The two countries agreed on a swap facility of $22.76 billion, or almost double the size of the previous deal signed in 2013. Under the agreement, Indonesia can swap rupiah directly to yen at a predetermined exchange rate, instead of having to convert it first to other currencies, such as the United States dollar.

This arrangement should reduce the risk a fluctuating exchange rate may pose to trade and investment between the two countries.

Indonesia also has swap agreements with China and South Korea, as well as multilateral swap facilities under the Chiang Mai Initiative involving the 10 members of the Association of Southeast Asian Nations (Asean).

These are designed to add additional layers of protection to the country's currency and were implemented following the 1998 Asia financial crisis, which forced it to borrow on unfavorable terms from the IMF.


Indonesia, US finance ministries establish cooperation on fiscal

The Finance Ministry of Indonesia and the United States Treasury have established fiscal cooperation in order to boost strong and inclusive economic growth and strengthen the ongoing strategic partnership.

The strategic partnership between the two countries has been running well.

"The US and Indonesian Finance Ministries hope the relations between the two institutions will be ever stronger and will help bolster the strategic partnership built by President Barack Obama and President Jokowi in October 2015," US Secretary of the Treasury (Finance Minister) Jacob J. Lew said here on Friday.

He added that the cooperation between both the countries has been possible because of the strong relationship based on principles of good governance, and a strong and inclusive economy.

The fiscal cooperation was aimed at improving the tax policy, the tax system administration, creation of good environment for domestic and foreign businesses and expanding public infrastructure and financial market.

The US Treasury will help broaden the participation of Indonesian Finance Ministry in five sectors.

First is related to the implementation of tax reforms. The US Treasury will share best practices and lessons learned from the US federal tax system.

Second, the US Treasury and the Indonesian Ministry of Finance will work together to support the development and regulation of the financial sector in Indonesia.

Third, the US Treasury will launch cooperation on technical assistance in fall to strengthen the institutional capacity of Indonesia.

Fourth, the US Treasury will begin to provide additional technical assistance by early 2017 to support treasury and cash management reforms.

Fifth, the US Treasury will hold a policy dialogue on macroeconomic and financial issues on a regular basis so that the two countries can understand each others macroeconomic and financial conditions.

 

[acelaw]

Singapore in the eye of a perfect economic storm
By The Independent -

October 3, 2016
15767


By: Frank Doe

We are now caught in the eye of the perfect storm so to speak, it’s not over yet and things are set to get worse. The news of the grim spectre of negative employment growth (especially for the local PMETs) has yet to sink in.

We now see Indonesia’s perfect timing of the rollout of their tax amnesty plans to lure cash back from Singapore. This has far exceeded expectations and the take-up rate far surpassing analysts’ estimates as reported in the financial news last Saturday.

This will likely make a considerable dent in Singapore’s wealth management industry seen in the exodus of funds hitherto parked here by the ultra rich Indonesians to evade taxes back home.

This had always been a contentious issue with the Indonesian government and at one time leading Indonesia to stop selling sand to Singapore at the height of the MBS mega project.

This landmark tax-amnesty programme is the brainchild of Indonesia’s new Finance Minister, Dr. Mulyani Indrawati, in the Jokowi administration and is seen to be the silver bullet to help raise the hundreds of billions of dollars Indonesia needs to beef up a flagging state budget.

Dr. Mulyani Indrawati held top-notch position in the World Bank, exactly the type of technocrat that Jokowi wanted back in Indonesia.

In essence, the Indonesian tax-amnesty programme provides a reprieve to wealthy Indonesians who have been remiss in their tax affairs to take advantage of this golden opportunity to disclose and optionally repatriate their undisclosed assets overseas and pay only a modest clearance levy on assets declared and brought home.

Three brutal news hit Singapore on this black Monday (3 Oct):

1. the gloomy days for strata office market,
2. the Perisai bond default contagion eating into Ezra’s cash pile, and
3. private home sales down 12th consecutive quarter as reported by URA.

The recent grim headlines suggest that Singaporeans must be worried – be damn worried – for the generations going forward.

Singapore has lived its “Golden Era” under the leadership of Lee Kuan Yew and Goh Chok Tong. We are now descending into the “dark ages” under Lee Hsien Loong.



Previous articleFright football, Singapore
Next articleUN Expert to Singapore: offer more state support for eldercare, pension for all, minimum wage, poverty statistics