Indonesia's Economy, Political, Social, and Science Development Thread

[nufix]

Geothermal Plant Gets Go-Ahead
Tito Summa Siahaan | April 05, 2013

Darajat Geothermal Power Plant. Mount Darajat, West Java - Indonesia.


Twenty years after the plans were first drawn up, construction is set to soon commence in North Sumatra on the $1.5 billion Sarulla Geothermal Power Project, the largest of its type in the world, following a deal reached by key players in the energy sector in Jakarta on Thursday.

State-controlled utility Perusahaan Listrik Negara signed a deal with Pertamina Geothermal Energy, a subsidiary of state-controlled energy company Pertamina, and a consortium led by private-equity controlled Medco Power.

The facility will have the capacity of 330 megawatts, making it the world’s largest geothermal generator.

The facility will be built in three stages, and is expected to be fully operational in 2018. .

PLN said it will price the electricity generated from the power plant at 6.79 cents per kilowatt hour, after a revision to a price deal struck in 2010. PLN president director Nur Pamudji said the company “hopes that the construction of this geothermal power plant can commence as soon as possible, so that it can contribute to sustainable and environmental-friendly development.”

Geothermal energy seeks to harness energy contained in the earth.

Medco Power president director Fazil E. Alfitri said the project would provide clean energy for Indonesia. “Medco Power is committed to becoming a national company that is a strategic government partner to fulfill national electricity demand,” he said.

Medco Power holds a 37 percent stake in the $1.5 billion project, while Japanese companies Itochu and Kyushu Electric control 25 percent each. US-based Ormat Technologies owns the remaining 13 percent.

Medco Power is 51 percent owned by Saratoga Capital, co-founded by businessman Sandiaga Uno. The remaining 49 percent is controlled by Medco Internasional, the country’s largest listed oil and gas firm.

The Sarulla plant has been on the drawing board since 1993, but construction has never commenced due because of a variety of problems. Pertamina and PLN had created a joint venture, Geo Dipa, to build the plant, but Geo Dipa pulled out after failing to secure necessary funding to build the plant, paving the way for the Medco-led consortium.

The consortium and PLN then took another four years before the earlier price deal was signed in 2010. After that, there was another technical constraint that put construction on hold.

Earlier plans to develop Sarulla relied on a regulation that stated that all identified geothermal assets needed to stay under Pertamina’s control.

In February, the Finance Ministry issued a new regulation allowing Pertamina to transfer its geothermal assets to be developed by a joint operating body.

Indonesia, located on two volcanic chains, is said to hold 40 percent of the world’s geothermal energy potential, with feasible annual generating capacity of more than 29,000 megawatts. But so far only 4 percent of Indonesia’s geothermal potential has been exploited.

 

[Reashot Xigwin]

RI is reference point in tackling terrorism
Indra Harsaputra, The Jakarta Post, Surabaya | National | Sun, April 07 2013, 4:20 PM

Discussing terrorism: Chairman of the Counter Terrorism Task Force, Harry Purwanto (center) talks with two US delegation members on the sidelines of the second Senior Officials Meeting of the Asia Pacific Economic Cooperation (SOM 2 APEC) in Surabaya, East Java, on Sunday. Terrorism was one of issues discussed in the meeting. [JP/Indra Harsaputra]

An expert says that Indonesia has been praised by international institutions, including the Russian Intelligence Agency (FSB), as a country in Asia that has become a reference point in the fight against terrorism across the world.

Chairman of the Counter Terrorism Task Force, Harry Purwanto, said on Sunday that Indonesia was considered a country with a lot of experience in the fight against terrorism ranging from cyber terrorism to radicalism.

“The FSB and several financial and property institutions in countries across the world want to draw on experience from Indonesia in tackling terrorism in their respective countries,” said Harry.

He spoke on the sidelines of the Asia Pacific Economic Cooperation (APEC) Counter Terrorism Task Force meeting in Surabaya.

At the meeting, he said, participants discussed the capacity of APEC member countries to improve their readiness to deal with threats and also possible partnerships they could create in providing countries assistance with terrorism countermeasures.

The Foreign Affairs Ministry’s director for Asia Pacific and Africa intra-region cooperation, Arto Suryodipuro, said the two-day APEC Terrorism Task Force forum would specifically discuss terrorism funding in Asia Pacific.

“We will detect the flows of money being used to finance trans-border terrorism and how financial institutions make efforts to detect the problem,” said Arto, adding that airport facilities had also become a crucial issue countries needed to pay attention to in tackling terrorism. (ebf)

RI is reference point in tackling terrorism | The Jakarta Post

Yogyakarta Police chief replaced
Dicky Christanto, The Jakarta Post, Jakarta | National | Sat, April 06 2013, 11:53 AM


The National Police headquarters has announced its decision to replace Yogyakarta Police chief Brig. Gen. Sabar Rahardjo with Brig. Gen. Haka Astana, who currently serves as the head of the strategic studies bureau in the National Police human resources division.

“Brig. Gen. Sabar will swap positions with Brig. Gen. Haka and he will be posted as the new head of the strategic studies bureau,” National Police spokesman Brig. Gen. Boy Rafli Amar told The Jakarta Post on Saturday.

Boy said the replacement was determined following a series of evaluations and performance assessments carried out by the senior promotions and duty rotation board (Wanjakti); one contributory factor was Sabar’s controversial decision recently to transfer to Cebongan Prison in Sleman regency, Yogyakarta, four detainees who were later slain in a well-organized attack on the prison by unknown assailants.

Yogyakarta Police chief replaced | The Jakarta Post

 

[Reashot Xigwin]

Ormat to build $245m geothermal power project in Indonesia

The 330 MW Sarulla geothermal power project to begin construction in one year.
By Viva Sarah Press April 9, 2013,

Israel’s geothermal company Ormat Technologies has signed a $245 million deal to provide geothermal energy in Indonesia. The Yavne-based company will design the Sarulla geothermal power station in Sumatra and supply its Ormat Energy Converters to the new power plant.

The Sarulla project is the largest single contract geothermal power project to capitalize on the highly productive Indonesian geothermal resources. The project will be implemented in three phases of 110 MW each, utilizing both steam and brine extracted from the geothermal field to increase the power plant’s efficiency.

The first phase is scheduled to begin operation in 2016.

Ormat’s Energy Converter is a power generation unit that converts low-, medium- and high-temperature heat into electricity.

“Once the financing closes, we will be able to recognize revenues from the supply of the equipment over the construction period and further strengthen the performance of our Product Segment. This project, represents our entry into Indonesia, a region we have been excited about for some time, ” Dita Bronicki, Ormat’s Chief Executive Officer, said in a statement. “We believe the potential opportunity in Indonesia is significant, and we look forward to pursuing opportunities in what we anticipate will be a growing market in the years to come.”

Ormat to build $245m geothermal power project in Indonesia | ISRAEL21c

Ormat to Provide 330 Megawatts of Geothermal Energy in Sumatra, Indonesia
Brian Nitz | April 8th, 2013 |

Indonesia has 40 percent of the world’s exploitable geothermal energy potential.

A big congratulations to Ormat technologies of Yavne, Israel for signing a $254 million deal for providing geothermal energy in Indonesia! The first phase of the 330-megawatt Sarulla geothermal power station in Sumatra is due to begin operating in 2016.

Sumatra lies in one of the most geologically active parts of the Pacific ring of fire and is known for numerous active volcanoes. The nearby volcano of Krakatoa was responsible for the largest eruption in recorded history and Sumatra’s Toba volcano was responsible for earth’s largest volcanic eruption in the past two million years.

It was about 5000 times more powerful than Mount Saint Helen’s 1980 eruption. Earthquakes, volcanic eruptions and the threat of tsunamis are unfortunate facts of life for the people of Indonesia.

Now for the good news, Indonesia has 40 percent of the world’s exploitable geothermal energy potential. It has been estimated that as much as 28 billion watts of geothermal energy potential is available there or the equivalent of 12 billion barrels of oil. It has been a long slow process tapping into this energy.

The government of Indonesia set rules for geothermal energy more than a decade ago and there has been some controversy about plans to tap into geothermal energy here. So currently only 1.2 billion geothermal watts are being exploited in Indonesia.

According to their press release, Ormat will deploy their modular geothermal generating technology in three phases, each consisting of 110 megawatts of generating capacity.

One important consideration for this project is Ormat’s technology which allows nearly 100% of the geothermal fluid to be recycled and which utilizes the extracted brine. This will both increase the efficiency of this geothermal project and reduce the emissions of unwanted volcanic gasses.

Ormat (NYSE: ORA), expects to complete financing and begin construction in one year. The Sarulla geothermal power project is among the world’s largest single-contract geothermal power plants and is an important step towards Indonesia’s planned ten billion watt geothermal expansion.

Photograph of boat and erupting Indonesian volcano by Byelikova Oksana via Shutterstock

Ormat to Provide 330 Megawatts of Geothermal Energy in Sumatra, Indonesia | Green Prophet

 

[nufix]

ADB predicts RI`s economic growth of 6.4 percent in 2013
Tue, April 2013 17:27 | 164 Views

Jakarta (ANTARA News) - Supported by private consumption and increase investment, Indonesia`s economic growth is predicted to reach 6.4 percent in 2013, according to Asian Development Bank (ADB) spokesman Edimon Ginting.

"It is assumed that private consumption, triggered by increasing employment and average minimum wages and civil servants` salary, will strengthen this year," Edimon said when explaining ADB annual economic report here on Tuesday.

He explained that Indonesia was also able to maintain its economic stability while the trend of private consumption gets increasing in the run up to the 2014 general election.

"Increased spending ahead of the legislative and presidential elections in 2014 is predicted to contribute to increased consumption in the second half of 2013," he noted.

Besides, he said private as well as government investments also showed a healthy expansion which is marked with increased credits from international institutions, the decline in interest rates, increased budget allocation for infrastructure, and the record of strong economic growth.

"Indonesia is still the third best target of foreign direct investment after China and India, and that the investors will not question the short term impact of the general elections," he said.

Edimon added that the relatively stable economic growth was due to increased export performance in 2013 which was encouraged by strong growth in China and other countries.

"Export is projected to continue increasing in 2014 because of improvement in other industrial countries," said Edimon Ginting, Deputy Country Director at ADB`s Indonesia Resident Mission.

According to him, the improvement of such a condition will continue to prevail until next year, and therefore economic growth in 2014 is predicted to be higher that that of this year to reach 6.6 percent.

"With the momentum of growth in Southeast Asia, Indonesia at present is on the right course toward a long term economic growth," Edimon noted.

He said average inflation rate was predicted to be at a reasonable level of 5.2 percent in 2013 and 4.7 percent in 2014 with an assumption that there would be not fuel oil price hikes in the next two years. (*)
Editor: Heru

 

[Reashot Xigwin]

Jokonomics, Social Welfare And the Future of Indonesia
John Riady | April 11, 2013

'One measure of a fair society is how willing one would be to be born it at random.'

The election of Joko Widodo as Jakarta governor is rightly seen as heralding a new kind of politics. As a political outsider, his fresh approach to practical issues like public transport, flooding and clean water demonstrated a keen familiarity with the concerns of most Indonesians. The campaign itself was positive and youthful, built around a personality that was modest and authoritative. And his victory, despite running with a deputy gubernatorial candidate of “double minority” status (both Chinese-Indonesian and Christian), sends a strong message that democracy is alive.

Significantly, the campaign of the man better known as Jokowi emphasized social welfare. The new governor has introduced the Jakarta Health Card (KJS), which provides free access to medical services, and the Jakarta Smart Card (KJP), which provides a monthly stipend for school fees. Related measures, including low-cost apartments and minimum wage rises, are part of the platform.

The promise of Jokonomics is evident. Increasing the minimum wage, against the persistent lobbying of big business, is a necessary tool to narrow the gap between price inflation and purchasing power. Access to health and education has improved dramatically. This effort at equality of opportunity is important because it allows talent and hard work to be rewarded.

On the other hand, constraints to increased welfare are emerging. City-owned hospitals have been inundated by patients seeking free healthcare, with an approximately 70 percent increase in patients in some wards. In many areas, people waited in lines from 5 AM on.
Even deaths have been reported due to inadequate treatment from overcrowding. Such resource constraints are understandable and will take time to catch up.

Another bigger question is fiscal sustainability. Jokowi’s KJS will, in its inaugural year, add to the Jakarta budget around Rp. 900 bn in a total budget of Rp. 50 tn. This figure will undoubtedly grow as we create new capacity to fix overcrowding, and as population ages.
Who will pay for it and what taxes will be raised? With politicians focused on the next electoral cycle and civil servants for the most part lacking sophisticated modeling capabilities, few are thinking about the long term.

Jokonomics is important because it is a microcosm of what is happening on a national scale. In fact, it is part of the broader ramp-up of social spending in Indonesia. In 2004, a law was passed authorizing the creation of the National Social Security System (SJSN), the foundation of the new Indonesian welfare state. SJSN — scheduled for 2019 implementation — encompasses anti-poverty, health and pension programs.

SJSN is a game changer:

First, benefits formerly restricted to the poor (like Raskin or Jamkesmas) or government employees (like Taspen or Askes) will now be universalized.

Second, government spending will increase dramatically, from about 19 percent of GDP today to something closer to 30 percent — like Malaysia today. Depending on the number of people to be covered by the programs (as yet undecided), total government spending for pensions, health care and old-age savings could jump by nearly 9 times over 50 years, potentially blowing out the budget. As life expectancies increase and the working population ratio decreases, what seems sustainable at first may become steadily less so.

Third, as the public acclimates to low-priced social services, the programs will develop a prestige and momentum of their own, becoming effectively unrepealable. Future reformists trying to improve the system’s sustainability may be attacked for trying to “privatize” essential services.

Fourth, the state will likely become a major actor in the economy. A vast centralized procurement bureaucracy for all sorts of pharmaceutical, disability care, and financial services will develop, with significant possibilities for corruption and market inefficiencies.

This is a very strong critique of a program that has not, after all, started. But undeniably, this is also the normal way welfare states have developed all over the world, not just in the West but also in Asian countries like India, Japan and Malaysia — all of which have prohibitive debt-to-GDP ratios.

I am not arguing against welfare. Done properly, it serves to empower those who need it most, and ultimately the entire society benefits. In fact, one measure of a fair society is how willing one would be to be born into it at random. In Indonesia, if you are born disadvantaged in some way, the system gives you a less than fair chance. Welfare programs can mitigate this. But the government should not go bankrupt along the way.

To this end, there are three broad principles to keep in mind:

First, the principle of inter-generational sustainability. Fairness and justice are not just about redistribution today, but also about what is fair for our children and their future generations. Subsidizing welfare is pointless if that means consuming future income from the next generation and saddling our children with debt.

An independent commission of experts should be set up to cost social programs, project tax revenues and economic growth — in line with the US Office of Management and Budget. Programs must be revenue neutral: for example, the SJSN should only be rolled out as energy subsidies are eliminated.

Second, we need policies that incorporate market prices to provide a disincentive against overconsumption. This was the fall of the US health care system. Patients weren’t paying for enough of the cost of health care, so they overconsumed, doctors had no competitive environment to keep them innovative, and the hospitals were also happy to keep their beds full.

Third, we need better budget reporting from the state. Without a reliable budgeting system, nothing can be measured, and what isn’t measured, most often isn’t achieved. At the moment nobody can fully track central government welfare spending. The “social assistance” (bantuan sosial) category overstates social spending because it includes education programs (like School Operational
Aid, or BOS), but not state pension programs. The other indicator, “social protection” (perlindungan sosial), is too narrow, and does not
include most welfare programs.

These are massive changes and the next few years are crucial. If we can implement them sustainably, we will have created a more prosperous and fairer society. If not, our failure will haunt us for generations to come.

Today, at Universitas Pelita Harapan, Jokowi will be delivering his first university public lecture as governor. We are proud to welcome him and hope to contribute to his vision for a new Jakarta. We should harness this energy for the betterment of Indonesia, but keep in mind the perils of welfare, lest we fall into the trappings of our European cousins, mired in debt, social upheaval, economic chaos, and
geopolitical decline.

John Riady is executive dean and associate professor of law at Universitas Pelita Harapan and editor at large at BeritaSatu Media Holdings.

Jokonomics, Social Welfare And the Future of Indonesia | The Jakarta Globe


Indonesia to boost image through worldwide cooperation
Ida Indawati Khouw, The Jakarta Post, Jakarta | World | Wed, April 10 2013, 11:53 AM

Improvements in Indonesia’s economy entailed a responsibility to contribute to the world through boosting partnerships with other developing countries with Indonesia sharing its capabilities and best practices, an official has said.

An official at the Foreign Ministry’s technical cooperation directorate, Wicaksono Boediman, said on Tuesday that this year’s cooperation would include workshops with “Arab Spring” countries and African nations as well as with Palestine, Afghanistan and Myanmar under the South-South Cooperation framework.

“We want to raise international awareness that Indonesia is ready to share its technical assistance with other countries,” he said.

This year’s budget for technical cooperation is US$2.35 million for 40 technical cooperation programs to improve capabilities in agriculture, husbandry, fisheries, infrastructure, democracy, natural disaster management and microfinance. The 40 programs mark a steep hike from the 15 programs in 2012.

“Despite the limited budget, due to our track record, countries ask for our assistance,” Wicaksono said, referring to requests from Palestine, Myanmar and countries in Asia Pacific and Latin America.

Between 2000 and 2012, the government disbursed $50 million for 700 partnership activities with developing countries in Asia Pacific, Africa and Latin America.

This year, the programs include microfinance workshops for Palestine, to be held in Amman, Jordan, and in Jakarta and Bandung, West Java, between April 12 and 19.

In May, water management workshops will be held for 20 delegates from African nations in Addis Ababa, Ethiopia, and in Bali; while in June, an international training on democracy will be held in Bali for 10 participants from Algeria, Sudan, Syria, Tunisia and Yemen, in cooperation with the Institute for Peace and Democracy.

The programs will also reach out to Myanmar in June-July, focusing on social reconciliation.

Wicaksono admitted that the cooperation was part of soft diplomacy, which in return could boost Indonesia’s trade, citing Myanmar as an example where the market was now open for state-owned telecommunications firm PT Telkom.

“Every month, we hold a coordination meeting with the National Development Planning Agency [Bappenas] on the selection process and matrix of priority, so that [the partnerships] meet the needs of each individual country,” Wicaksono said following a press briefing on the upcoming South-South and Triangular Cooperation Forum (SSTCF).

Foreign Minister Marty Natalegawa is scheduled to open the cooperation forum, which aims to introduce Indonesian policies relating to South-South cooperation, on April 17 in Jakarta.

During the forum, Marty will launch four technical cooperation initiatives for this year, namely road infrastructure for Afghanistan, microfinance for Palestine, public-private partnerships (PPP) and a booklet on Indonesian knowledge hubs.

The forum will also include an exhibition of six selected flagship programs of Indonesia’s 2011-2014 South-South cooperation.

http://www.thejakartapost.com/news/2013/04/10/indonesia-boost-image-through-worldwide-cooperation.html

Askes eyes 121.4 million participants in 2014
The Jakarta Post, Manado | National | Thu, April 11 2013, 2:08 PM


State-owned health insurance company PT Askes (Persero), which will become the implementing body of the Social Security Providers (BPJS) Law for the healthcare sector, expects to acquire 121.4 million participants in 2014.

“Currently, the number of Askes participants has reached 16.5 million. The number of our participants will continue to increase until next year,” said Askes marketing group head Jenni Wihartini as quoted by Antara news agency.

She said that the entire estimated Indonesian population of 260 million people would be covered by 2019.

“To achieve these targets, all aspects such improving human resources capacity and increasing the number of staffs should be integrated. We have also continued to introduce the program to civil servants, retired civil servants, and all veterans,” said Jenni.

She added that all participants, no matter where they lived, would get equal treatment. “Healthcare services should be accessible from anywhere. All people must be treated equally,” said Jenni.

Askes is a corporation mandated by the government through the Government Regulation (PP) No.22/1984 to manage health insurance programs for civil servants, pension beneficiaries, Indonesian Military (TNI) members, state officials, veterans and their family members.

It has been appointed as the implementing agency of the BPJS law for the healthcare sector. which will take effect on Jan.1, 2014, as mandated by the 2004 National Social Security System (SJSN). (nai/ebf)

http://www.thejakartapost.com/news/2013/04/11/askes-eyes-1214-million-participants-2014.html

 

[Reashot Xigwin]

Ghost of Suharto Seen in Boomtowns Leading Indonesia Growth
By Novrida Manurung - Apr 11, 2013 4:45 PM GMT+0700

Five years ago, property agent Daisul Akhyar took 20 minutes to drive to work in Pekanbaru, capital of Indonesia’s Riau province. Now, he can spend two hours in traffic after a surge in wealth transformed the city.


“If you live in Riau now, it’s like living in Jakarta, there are new residential and retail developments all over the city,” Akhyar, a director of local developer PT Asrindo Perdana Mandiri, said in Pekanbaru on Sumatera island. “Selling property in this place is like selling candy to children.”

Houses under construction stand in Pekanbaru. “Selling property in this city is like selling candy to children,” said Daisul Akhyar, a director of PT Asrindo Perdana Mandiri. “If you live in Riau now, it’s like living in Jakarta -- there are new cluster houses and retail developments all over the city.” Photographer: Dimas Ardian/Bloomberg

People fish along Siak River as Jembatan Siak IV (Siak Bridge IV) is under construction in Pekanbaru. Pekanbaru had compound annual growth of 9.8 percent over the past 10 years and will average of 7.3 percent a year to 2030. Photographer: Dimas Ardian/Bloomberg

A worker harvests palm oil fruit at a plantation owned by PT Guna Dodos in Pelalawan, Riau province. “There’s a lot of new middle-income class popping up in Riau because of palm oil,” said Viator Butar-Butar. Photographer: Dimas Ardian/Bloomberg

Traffic runs on a highway in Pekanbaru. President Susilo Bambang Yudhoyono plans to build 30 new industrial zones across the 17,000-island archipelago and to spend $125 billion on infrastructure by 2025, including $12 billion on 20,000 kilometers of roads, enough to go halfway round the world. Photographer: Dimas Ardian/Bloomberg

Customers shop in a shopping mall in Pekanbaru. For the growing number of residents in provinces like Riau, new wealth means new spending. Photographer: Dimas Ardian/Bloomberg

Vehicles wait for ferry transport to cross the sea to Sumatra island at Merak port, West Java. The attempt to spread prosperity from Java, home to 62 percent of the population, began during Dutch colonial times with the start of a transmigration program designed to move people to sparsely inhabited islands such as Sumatra, Borneo and New Guinea. Photographer: Kris Aria/AFP/GettyImages

The world’s fourth most-populous nation is seeing its economy reshaped as cities on islands including Sumatera and Borneo grow faster than Java, home to the nation’s capital, Jakarta. A transmigration program championed by former President Suharto in the 1980s, combined with China’s demand for palm oil, coal and iron from Indonesia’s rural provinces, helped outlying cities expand as much as 4 percentage points faster than the national average over the past decade.

As China’s expansion boosts incomes of miners and farmers in some of the sleepiest and most far-flung corners of Asia, companies from Unilever Plc (ULVR) to Toyota Motor Corp (7203). are flocking to Indonesia’s second-tier cities to tap their rising demand. At the same time, increasing urbanization raises pressure on President Susilo Bambang Yudhoyono to improve infrastructure and strains environmental resources.

“In future, the nation’s economy will be supported by cities outside Java,” Perry Warjiyo, the central bank’s executive director for monetary policy and economic research, said in an interview. “This is in line with the government’s program to spread out economic growth to all the provinces.”

Outpacing Jakarta

Smaller cities of 150,000 to 2 million inhabitants will outpace the big conurbations like Jakarta, increasing their share of gross domestic product to 37 percent in 2030, from 31 percent currently, McKinsey & Co. said in a September report. At present, the region around Jakarta covers less than 1 percent of the country and accounts for more than 10 percent of the economy.

Growing incomes in the outlying cities will benefit consumer goods and services companies such as PT Unilever Indonesia (UNVR), PT Indofood CBP Sukses Makmur (ICBP) and PT Telekomunikasi Indonesia (TLKM), said Fadlul Imansyah, head of investment at PT CIMB- Principal Asset Management in Jakarta, with 2.3 trillion rupiah ($240 million) of assets.
Spend, Spend

“The fast growth in regions outside of Jakarta has become a priority for these companies,” said Soni Wibowo, a director at Jakarta-based PT Bahana TCW Investment Management, which manages about 22 trillion rupiah in assets. Profits of companies like ACE Hardware Indonesia (ACES) have been aided by that demand and “going forward there’s still growth to expect,” he said.

The boom in second-tier cities has helped swell the middle class. Seven million Indonesians joined their ranks each year for the past seven years, according to a 2011 World Bank report. Private spending grew 5.4 percent in the fourth quarter of 2012 from a year earlier, and consumer confidence in March was 116.8, the eighth straight month the indicator exceeded 115. Pekanbaru, Pontianak, Karawang, Makassar and Balikpapan regions will lead growth, McKinsey says.

“Consumer confidence in Indonesia is very, very high,” said Destry Damayanti, chief economist at PT Bank Mandiri in Jakarta. “That’s why they spend and spend.”

Fried Chicken

The spread of consumer demand is drawing investment from companies including Nestle SA, Toyota (7203) and Unilever, as well as many from Java. Four-bedroom units at developer Ciputra Group’s Citragarden residential complex in Pekanbaru start from 900 million rupiah, compared with 685 million rupiah for the cheapest similar abode at the company’s CitraIndah project, 30 kilometers from the center of Jakarta.

On the fourth floor of Ciputra’s mall on Jalan Riau, palm- oil planter Safruddin is eating fried chicken and soup from a fast-food restaurant while his Volvo is being repaired in a local garage. On lower floors, outlets for Body Shop International Plc (BOS), Giordano International Ltd. (709) and other global brands indicate the spread of wealth to the province in the past few years. On the ground floor, a Honda Motor Co. (7267) dealership offers the latest Freed, Jazz and Brio models for as much as 1.8 million rupiah a month in installments, more than the average wage in the province.

“In Riau now it’s easy to get a job, that’s why there are so many new shopping malls,” said Safruddin, 52, who like many Indonesians only uses one name. Of his 10 children, two sons help manage his plantations in nearby Bangkinang. A third plans to open a supermarket and an English-language school. “At least I won’t need to buy him a car. He can buy it himself.”

Oil, Timber

Money from palm oil has joined Riau’s boom riches from oil and timber industries that drew companies such as PT Chevron Pacific Indonesia (CVX), PT Indah Kiat Pulp and Paper, and PT Surya Dumai Industri (SUDI). Riau has been one of the main oil-producing regions since reserves were first discovered there in the 1930s.

Pekanbaru had 9.8 percent average annual growth over the past 10 years and will sustain a 7.3 percent pace through 2030, McKinsey says. The report predicts similar growth for oil-rich Balikpapan in East Kalimantan, and Makassar in South Sulawesi. National GDP grew at an average annual pace of 5.7 percent in the decade through 2012.

With many of Indonesia’s provinces outside Java reliant on oil, minerals or agriculture for revenue, those gains will depend on swings in prices of the commodities. In Riau’s case, a slump in palm-oil prices slowed the pace of development.

The slump reduced demand for new shops and apartments to about 1,500 units for Pekanbaru in 2012, from around 10,000 in previous years, said Akhyar, who is also vice secretary for the Indonesia Real Estate Association in the city. He said sales this year may be about 5,000 units as demand recovers.

More Roads

As new shops and apartments spring up, the government is trying to keep up, spending more on roads and ports. President Yudhoyono plans to build 30 new industrial zones across the 17,000-island archipelago and to spend $125 billion on infrastructure by 2025, including $12 billion on 20,000 kilometers of roads, enough to go halfway round the world.

“The resilience of private consumption has been supported by improvements in consumers’ purchasing power and consumer confidence,” Bank Indonesia said in a statement today, after holding its benchmark interest rate at a record-low 5.75 percent for a 14th consecutive meeting.

The attempt to spread prosperity from Java, home to 62 percent of the population, began during Dutch colonial times with the start of a transmigration program designed to move people to sparsely inhabited islands such as Sumatera, Borneo and Papua. The settlers were given land to help develop plantations and raise income levels.

Rising Tensions

The program reached its zenith after independence under Suharto, who died in 2008. In 1982-83, almost 100,000 families were resettled in a single year, according to the World Bank. After 1984 the plan was scaled back as tension mounted between immigrants and locals and concerns arose about environmental damage from clearing rainforest for plantations, the bank said.

“The transmigration program succeeded in spreading people from Java and lifting economic activity in new cities,” said Agustinus Prasetyantoko, a Jakarta-based economist from the University of Atmajaya. “But it also created conflict.”

A second level of migration -- from rural to urban areas -- is also feeding the growth of cities like Pekanbaru. The proportion of Indonesians living in urban areas will rise to 71 percent in 2030, from 53 percent, as about 32 million people shift to cities, according to McKinsey. The share of Indonesia’s GDP generated by urban areas will reach 86 percent in 2030, from an estimated 74 percent currently.

Million Shops

The main driver behind the increasing wealth and power of the nation’s regional capitals is a decade-long boom in the nation’s resources. In the past 12 years, palm oil prices have more than tripled, even after a 35 percent drop in the past year. China-led demand has lifted coal, copper and gold as much as fourfold in a decade.

“There’s a lot of new middle-income class popping up in Riau because of palm oil,” said Viator Butar-Butar, vice president of the Chamber of Commerce and Industry Riau and a former senior lecturer in economics at the University of Riau. “The forest has turned into shops. Now, we call Riau the land of a million shops.”

Beside the highway from Pekanbaru to the city of Siak, 100 kilometers to the east, construction sites soon give way to rows of oil palms, a monoculture that replaced one of the world’s oldest rainforests. The regimented lines of trees occasionally are broken by an oil-company building or a roadside shop selling food, drinks and Indonesia’s kretek clove-flavored cigarettes.

Even with more public investment, roads are congested with trucks carrying palm oil and timber to ports as the government struggles to connect an island chain that’s 5,271 kilometers long -- about the distance from New York to Anchorage, Alaska.

Island Chain

“It really depends on infrastructure,” said Damayanti at Bank Mandiri. “If there’s no infrastructure development in the next two years, then I think we will have a problem.”

For the growing number of residents in provinces like Riau, new wealth means new spending. Domestic vehicle sales rose 23 percent nationwide to 1.1 million units last year, according to PT Astra International, the country’s biggest seller of Toyota cars and Honda motorcycles.

The growing consumer market is attracting companies such as bread-maker PT Nippon Indosari Corpindo (ROTI), backed by Japan’s Shikishima Baking Co., which opened its first plant outside Java in 2011. The company opened factories in Palembang and Makassar in January and plans another in Kalimantan this year.

“Before we decided to build new plants outside Java, we looked at how the economy is doing there,” said spokesman Stephen Orlando, who expects sales to rise at least 30 percent this year. “Demand outside Java is high.”

Meanwhile, the regional cities continue to expand as more migrants arrive. Akhyar, the real-estate seller in Pekanbaru, said many buyers are from Java and other provinces. Nearby Siak has grown to more than 420,000 people, from 200,000 in 2000, thanks to an influx of people from Java, West Sumatera, Aceh and other provinces, said Syafrilenti, assistant to the regent for development and economy, who also uses one name.

“They come like ants to sugar,” he said.

To contact the reporter on this story: Novrida Manurung in Jakarta at nmanurung@bloomberg.net

To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net

 

[nufix]

Indonesia's Mari Among Final Five for WTO Head
April 2013

Indonesia's former trade minister Mari Pangestu has entered the race to lead the World Trade Organization. (EPA Photo)

Geneva. The field of candidates to lead the World Trade Organization shrank to five on Thursday and narrowed the race to two regions, triggering a potential scramble for Africa's support after the first of three rounds of competition.

A diplomatic source said the race now includes two Latin Americans — Mexico's Herminio Blanco and Brazil's Roberto Azevedo — and three candidates from the Asia-Pacific: New Zealand's Tim Groser, South Korea's Taeho Bark and Indonesia's Mari Elka Pangestu, the only woman still under consideration.

Representatives of the candidates were summoned to hear the results of the first round at a closed-door meeting in the WTO's Geneva headquarters.

The "troika" of three WTO ambassadors presiding over the race plan to make the results public on Friday, and give a timetable for the second round, which is expected to boil the field down to a final duel, whose winner will succeed Pascal Lamy as head of the WTO on Sept. 1 this year.

Some trade diplomats say the job is a poisoned chalice because it comes with little power to direct the WTO, a body that is run by consensus decisions of its 159 members and which is presiding over a huge slowdown in world trade and struggling to negotiate reforms in global trade rules.

However, the position is coveted because the WTO's unusual system of treaty-based rules and dispute settlement makes it an arbiter among nations and an influential world body alongside the International Monetary Fund and World Bank.

Geneva-based diplomats have said the nine-strong race made it impossible to predict the eventual winner, especially since many governments are thought to favor candidates from particular regions.

Before the six-month process began in earnest in December, some diplomats maintained that the next head of the organization must come from Africa or Latin America. Pascal Lamy rejected that idea, saying there was no geographical basis for the choice.

But the departure of Kenya's Amina Mohamed and Ghana's Alan Kyerematen means that African support is likely to become an important battleground for the remaining candidates.

The exit of Costa Rica's Anabel Gonzalez means the two remaining Latin Americans will have to struggle for supremacy, since it is unlikely that both will survive into the final round.

The other candidate to be dropped, Jordan's Ahmed Hindawi, was the first candidate from an Arab nation in the WTO's 18 year history.

The draw may now favor Pangestu, who would be the first woman to lead the WTO, and Groser, who survived despite the fact that a New Zealander has held the job once before, something that was seen as counting against him.

But the WTO's insistence on consensus means that any one member's strong dislike can essentially be used as a veto, leaving the final outcome uncertain.

Reuters



Wilmar Acquires Moroccan Sugar Company
Hadijah Alaydrus
April 16, 2013 16:51


JAKARTA: Wilmar International Limited has acquired from Societe Nationale d'Investissement (SNI) a 27.5% in Cosumar S.A., a company listed on the Casablanca Stock Exchange, for an aggregate cash consideration of US$263 million.

Subsequent to this transaction, a block of up to 26.5% will be sold by SNI to a consurtium of Moroccan institutional investors, who together with Wilmar will constitute a strategic 54% controlling block in Cosumar.

According to Wilmar in its release on Tuesday (4/16), funding for this acquisition will be from internal sources and bank loans.

The Acquisition is not expected to have material impact on the consolidated net tangible assets and earnings per share of Wilmar Group for the current financial year ending 31 December 2013.

Cosumar is the sole sugar supplier in Morroco and it is also the third largest sugar producer in Africa. (t03/tw)

 

[nufix]

SATELLITE Development and Orbiting stage by Indonesian Aerospace Agency (LAPAN).

Disaster, Weather mitigation, and Ground mapping civilian surveillance UAV development stage by LAPAN

Light Surveillance Aircraft in cooperation with TU Berlin development stage by LAPAN.

 

[Reashot Xigwin]

‘Java Heat’ Gets Indonesia Right
April 17, 2013, 5:44 PM
By Resty Woro Yuniar

Indonesians get to see themselves on the big screen when the action thriller “Java Heat” opens at theaters locally this week.
Java Heat Official Theatrical Trailer #1 (2013) - Kellan Lutz Movie HD - YouTube
Margate House Films
“Java Heat” is set in Indonesia and portrays its culture and people.

The film, about a U.S. marine who teams up with a Muslim detective to find out who is behind terrorist bombings, was shot mostly in Yogyakarta, in the southern island of Java. It ends at the Borobudur Temple, the breathtaking Buddhist monument from the 9th century.

The movie does a fairly good job of capturing Indonesian traditions, for example, the way children kiss their father’s hand in what is a sign of deep affection in Javanese society. Men in the film are referred to as “mas,” which is common among Java natives. Other authentic touches include scenes depicting nasi goreng (fried rice), traditional pedaled cabs called “becak,” and the “batik,” a Javanese fabric made of black, indigo and brown dyes that is an integral part of Indonesian culture.

“Java Heat” follows several American films set in Indonesia. In the 2010 hit film “Eat, Pray, Love,” actress Julia Roberts traveled to Bali island, where she found love after her divorce. Last year, Oliver Stone released his “Savages”– about marijuana growers and their girlfriend who deal with a Mexican cartel– which was set in Moyo island, eastern Indonesia.

To this native Indonesian, the movie gets a 3.5 rating out of a top 5, because while the plot is predictable, the movie does give a viewer a good feel for the country. One of its stars is Indonesian actor Ario Bayu, who gives a strong performance.

“Java Heat” continues the love affair of its director – Conor Allyn – with Indonesia, marking his first full-length film set here. He released the “Merah Putih” trilogy in 2009, which tells about Indonesia’s independence war against Dutch and Japanese colonialists.

“Java Heat” was screened at the Dallas International Film Festival in the U.S. on April 4, is playing in Germany, and will run at the Taormina Film Festival in Sicily, Italy, from June 15 to 22. It opens in Indonesia on April 18.

The Wall Street Journal caught up with Mr. Allyn in Jakarta. Here are edited excerpts:

WSJ: Among Indonesia’s landmarks, why did you choose Borobudur Temple?

Connor Allyn: I was always fascinated by Borobudur. It’s one of the biggest wonders of the world. When I wrote the screenplay for this movie, I had already pictured how to end the movie. And I could see that it would peak at Borobudur. It was the perfect location to end the movie.

WSJ: What do you think of the movie industry in Indonesia?

Mr. Allyn: It’s growing exceptionally fast, and it’s by far the best I’ve ever been. Everyone in the U.S. told me that Indonesia is the right place to make movies, and I get to be one of the first Hollywood people to make movies here….. It’s exciting and I want to keep doing it.

WSJ: Do you think “Java Heat” has what it takes to be, at least, on par with “The Raid” (a 2011 Indonesian action film being remade by Hollywood)?

Mr. Allyn: I expect that the movie will be on par with “The Raid.” We have the pieces to make that work. … People have to watch it and like it. And I think that’s what we have here.

WSJ: “Java Heat” has been pirated, both on the Internet and through illegal DVDs here. How does that make you feel?

Mr. Allyn: It’s a good and bad thing. As a movie producer, you want the people to see the movie in the right way, with the big screen and surround sound, and pay for it. But as a film-maker, word of mouth is a very important thing for creating buzz. I wasn’t very surprised. Piracy happens sometimes. I’m not going to judge.

WSJ: Any plan to filming in other countries in Southeast Asia?

Mr. Allyn: Of course. I can see myself filming in places like Singapore or maybe Malaysia. But Indonesia is better than these places. I’ve been here, on and off, for about five years now. I’m inspired by the beauty of the country, the beauty of the people here. I want to show the world tradition [of Java] that most tourists don’t see. My father [Rob Allyn, co-producer of “Java Heat”] and I did documentary on hunger in eastern Java few years ago. And we want to share our Indonesia experiences that inspire a lot of our ideas to global viewers.

http://blogs.wsj.com/searealtime/2013/04/17/java-heat-gets-indonesia-right/

 

[Reashot Xigwin]

It's Amazing How Much Indonesia Has Changed In The Last 18 Months
Simon Black, Sovereign Man | Apr. 19, 2013, 9:41 AM | 63 |

The view from Grand Hyatt Jakarta, Indonesia.

Simon Black is an international investor, entrepreneur, permanent traveler, and self-described free man

April 19, 2013
Jakarta, Indonesia

Whoever said “it’s a small world” never flew across the Pacific.

The flight from Santiago to Sydney is a mind-numbing 14 hours. And then it’s another 8 to Jakarta. Yet along the way are vast stretches of civilizations, resources, and amazing opportunities.

No, the world is a wonderfully massive place. And after a few months' hiatus, it’s great to finally be back out here again.

Long-time readers know that my normal travel schedule typically takes me to more than 40 countries in a year to check out unique business, investment, and lifestyle opportunities for you.

Yet for the last few months I stopped traveling and hunkered down in Chile planning for the Workshop we held earlier this month.

It took a lot of work to pull off the event and bring such figures as Ron Paul, Jim Rogers, Peter Schiff, Nigel Farage, and Jim Rickards to Santiago. But it was well worth it.

Now that the workshop is over, though, I’m pleased to be back on the road collecting boots on the ground intelligence for you. And one of the places you ought to know about is Indonesia.

It’s amazing how much this country has changed just since I was here 18 months ago.

In part due to its tremendous resource wealth and enormous population exceeding 250 million, Indonesia is emerging as one of Asia’s most exciting economies. In some ways, it’s in a similar position that China was in 20 years ago.

Because Indonesian wages are so much lower that in China, for example, many of the low-skill manufacturing jobs that generated such prodigious growth in China are now flowing into Indonesia.

Moreover, a vast middle class of tens of millions of high-income professionals, managers, and entrepreneurs is rapidly developing as Indonesians rise through the ranks of their own economy.

(I was happy to see that we even received a few applications from Indonesian students for our upcoming entrepreneurship camp this summer.)

It’s easy to see the results of this economic boom. Indonesia has become one of the region’s most dynamic consumer markets.

People shop. They buy cars, clothes, and smartphones. They enjoy overpriced coffee. They party it up at night. (And on that note, I should mention that Jakarta has a really great nightlife, one of the better-kept secrets in Asia&#8230

And as so many goods are produced right here in Indonesia, prices are low… often rock bottom. The cost of living here is absurdly cheap compared to just about anywhere else in the world.

Further, the stock market is one of the best performing in Asia, up 17% this year. I’m personally one to invest when things are in the gutter, so instead I’m looking at the Indonesian currency (rupiah), which is currently near a multi-year low.

Have a great weekend.

Read more: It’s still rock bottom cheap here…


Indonesian President Heads to Burma During Heightened Sectarian Tensions

Indonesian President Susilo Bambang Yudhoyono (2013 photo)

Sara Schonhardt

April 19, 2013
JAKARTA —

Indonesian President Susilo Bambang Yudhoyono will head to Burma Tuesday for his first state visit there since 2006. The trip comes as rising ethnic and religious violence in Burma tests the special relationship that has long bound the two southeast Asian nations.


Indonesia and Burma have a lot in common. Both were once military dictatorships that are now headed by former generals. Both have made the painful transition to democracy and have seen conflicts mar the way.

Scholars and government advisers say those similarities have created an understanding that change takes time, and that has kept Indonesia from pressuring Burma to speed up the pace of reform.

"It’s quite obvious when countries start reforming the political system like Indonesia in the past, we experienced a lot of difficulties in the early stages, a lot of communal conflicts, violence and other behavior which is not conducive for democracy. What happens in Myanmar at this stage is only part of the new realities under democracy," said Teuku Faizasyah, President Yudhoyono’s aide for international affairs.

In the years after mass protests in 1998 brought down former autocratic president Suharto, Indonesia worked to ease its military out of government. At the same time Indonesia used its close ties with Burma to nudge that country’s military regime toward more openness.

Burma watchers say progress has been notable. Since taking over the government two years ago, Burma’s president, Thein Sein, has loosened controls over the media, released political prisoners and helped negotiate cease-fire agreements with rebel groups.

But ethnic and sectarian clashes have escalated in Buddhist-majority Burma, threatening those celebrated reforms.

Human rights groups and the United Nations have pressured the government to do more to lessen sectarian tensions since last June, when rioting broke out between Buddhist and Muslims in western Rakhine state. Instead, the violence has spread, forcing more than 100,000 people from their homes.

Many of those fleeing the violence have gone abroad and some have sought refuge in Indonesia. For now, Jakarta is favoring engaging with the Burmese government instead of criticizing it.

Moe Thuzar, a researcher on Myanmar at the Institute of Southeast Asian Studies in Singapore, says Indonesia’s approach is similar to the non-intervention strategy used in the Association of Southeast Asian Nations, or ASEAN.

"Indonesia, as a founding member of ASEAN, is a big proponent of quiet diplomacy, and it’s how things have worked when it comes to advising fellow member countries and to bring about commitments toward change without splashing it in the headlines."

That approach has earned Indonesia Burma’s trust. In August last year former vice president Jusuf Kalla visited Rakhine state. Then, in January, foreign minister Marty Natalagawa gained rare access to one of the areas hit hardest by last year’s anti-Muslim violence.

While Jakarta has expressed concerns about the violence spreading through Burma, however, the president’s aide Teuku Faizasyah says it’s up to the Burmese people to solve the problem.

"Certainly we’ve given our support on how to best handle the problems. We can help in providing training and other ways of bringing little understanding among ethnic groups. But in the end it must be between Myanmarese themselves," Faizasyah said.

Indonesia experienced similar internal violence following its transition to democracy and is well aware of the complexities of dealing with reform. Some analysts say that if Indonesia, which is majority Muslim, is seen to be siding with the Rohingya, it risks dividing ASEAN and could jeopardize its leading role in the regional grouping.

Indonesian companies are also looking to Burma for investment opportunities. If Jakarta starts to exert pressure, it could lose some of its leverage.

Murray Hiebert, a senior fellow on Southeast Asia at the Center for Strategic and International Studies in Washington DC, says it is important that Indonesia share experiences, provide support and moral encouragement rather than impose pressure.

"The leadership in Myanmar these days is trying to do reforms, they’re really engaged on issues like human rights, how to address communal violence. I think for a country like Indonesia to go in and try to be too pressure-some would just raise hackles," Hiebert said.

Some parliamentarians in Indonesia have talked with their counterparts in Burma about security reform and the potential for discussions with people involved in drafting the Helsinki agreement that brought an end to decades of fighting in Indonesia’s Aceh.

Burma’s legislature has undergone some of the greatest reform in the country - though much of the government is still filled with military figures. Lawmakers in Indonesia say if the parliament is more empowered, it can take a greater role in shaping Burma’s future.

http://www.voanews.com/content/indonesia-burma/1645112.html

 

[Reashot Xigwin]

Rupiah weakens 30 points on Monday morning
The Jakarta Post, Jakarta | Business | Mon, April 22 2013, 2:04 PM


The Rupiah currency rate weakened against the US dollar on Monday morning along with the weakening of several Asian currencies.

During interbank transactions in Jakarta on Monday morning, the Rupiah weakened 30 basis points to Rp 9,775 per US dollar from Rp 9,745.

“Several analysts consider that the US economy still can grow, although half of its economic indicators show that the economy is likely growing at a slower rate. Such expectation supports the US dollar to strengthen again,” said a financial market analyst from Himpunan Saudara Bank, Ruly Nova, in Jakarta on Monday.

Nevertheless, he said, the domestic currency rate still could strengthen again along with the positive performance of Indonesia’s economic fundamentals with an estimated economic growth of between 6.2 to 6.5 percent.

Moreover, Ruly said, Bank Indonesia (BI) would also keep watching over the fluctuation of the domestic currency rate in the financial markets so that it could remain stable.

Ruly also said that the government’s plan to raise the price of subsidized fuel for four-wheeled private vehicles could help reduce the negative balance of trade.

“With a decline of trade deficit, it is hoped that the rupiah currency rate can move toward a positive direction because up until now, the trade deficit has been one of the cause factors that lead to the weakening of the domestic currency rate,” he said, adding that oil and gas was one of the factors that caused such a domestic trade deficit.

Meanwhile, an economist from Samuel Sekuritas, Lana Soelistianingsih, projected that the rupiah currency rate had the potential to strengthen ahead of a forthcoming auction of government bonds (SUN).

“Any plan for a government bonds auction is usually responded to with a strengthening of the Rupiah,” she said. (ebf)

Rupiah weakens 30 points on Monday morning | The Jakarta Post

 

[Nike]

i think our gov. had a plan to devalue our currencies to match the aggressiveness of yen Japan. This is important to held our economics to stay competitive.

 

[nufix]

RI commodities and infrastructure magnet for equipment suppliers
The Jakarta Post | Business | Tue, April 23 2013, 2:02 PM

As the world’s 16th largest economy with an annual growth of more than 6 percent, Indonesia is predicted to become the third largest market for heavy equipment in Asia after China and India. It was simply the right decision for Bauma 2013 in Munich, the world’s largest heavy equipment fair, which ended Sunday, to make Indonesia its official partner country. Volvo Construction Equipment, one of the largest among the 3,300 exhibitors at the international fair, invited a group of journalists from Indonesia, including Vincent Lingga from The Jakarta Post, to observe the massive display of power machines. Below is his report.

Indonesia took center stage at Bauma 2013 with a full-day conference where senior officials from the public works, transport, mining and finance ministries, along with the investment coordinating board briefed potential investors and international suppliers on the bright outlook of the heavy equipment market in Indonesia.

Back in February, Indonesia was selected as the guest country at the annual international trade fair in Basel, Switzerland.

In early March President Susilo Bambang Yudhoyono, accompanied by German Chancellor Angela Merkel, raised Indonesia’s global profile at the five-day Internationale Tourismus Borse (ITB) in Berlin, where it was also the official partner country.

But Indonesia’s “bing-bang” participation at Bauma 2013, the world’s largest heavy equipment fair, should top its string of global stage appearances.

Despite the mining and plantation sectors — which at the outset ignited the boom in the heavy equipment market — currently being in their down-cycle period, machine suppliers consider this a temporary phenomenon.

International suppliers remain upbeat about the future of the market, especially as demand from the construction sector had started heating up after the launch of the economic growth acceleration master plan, which needs more than US$460 billion investment in infrastructure alone within the next 10 years.

All major manufacturers of heavy equipment from the world, notably Europe, the United States, Japan, South Korea and China, displayed their machines within the 555,000-square-meter exhibition site.

But the Brussels-based Volvo Construction Equipment, the world’s third largest supplier, appeared to be the star among the exhibitors because last year alone the company released 60 new pieces of equipment, all employing new technology that makes the machines more fuel-efficient, more reliable and more environmentally friendly.

As Indonesia launched its master plan for the acceleration and expansion of Indonesian economic development (MP3EI) last year, which will require more than $460 billion in infrastructure development alone, Bauma 2013 was certainly the right place for public works officials to assess the latest technology available for the industry.

It is no wonder that Public Works Minister Djoko Kirmanto headed a large delegation to the exhibition. Besides delivering a speech as part of the Indonesian Day conference, Kirmanto also inspected displays at the huge fair.

Volvo, which operates construction equipment manufacturing plants around the world, demonstrated for Kirmanto and his delegation the capability and performance of their equipment.

“I am impressed with the performance of your equipment,” Kirmanto told Volvo executive vice president Eberhard Wedekind.

Kirmanto also spontaneously asked Hediyanto Husaini, the director general for the construction development agency, to facilitate meetings between contractors in Indonesia and Volvo.

Danang Parikesit, special assistant to the minister, projected in a speech at the conference that Indonesian’s demand for heavy equipment for mining, plantation and construction, would increase from about 42,000 units last year to 50,500 this year.

The annual sales growth of more than 40 percent steadily booked over the past five years by publicly-traded PT Intraco Penta, the main distributor of Volvo heavy equipment, demonstrated the dynamic of the Indonesian market.

Parikesit estimated the value of construction contracts in the country to increase to $40.3 billion this year.

“Indonesia is a very important market for us and we remain upbeat about the market despite the current down-cycle,” noted Volvo CE president Pat Olney, pointing out that the emerging economies such as China, India, Indonesia and Latin America already accounted for more than 50 percent of Volvo equipment sales.

Olney’s optimism has strong foundations because much of the new investment projects approved by the Investment Coordinating Board over the past five years were for mining, tree plantations, property and infrastructure development projects such as toll-roads, bridges, seaports and airports.

Olney said that when it comes to mining, highway construction and maintenance Volvo CE offers an extensive product portfolio.

“We also keep ourselves updated of ideas from our customers and include their suggestions in our research to produce better machinery,” said Anders Larsson, Volvo CE executive vice president for research and technology.

Certainly, Volvo will have to compete fiercely with other major equipment suppliers as Caterpillar from the United States and Komatsu from Japan.

Petrus Halim, president of Intraco Penta (INTA), which has distributed Volvo equipment since the early 1980s, concurred, saying “it is not simply selling a machine but enlightening customers of the right economic concept of heavy equipment”.

The right investment concept is imperative because the prices of heavy equipment can range from tens of thousands to over a million dollars per unit, Halim said.

“We offer a total solution to our customers — not only in terms of operational reliability and operational life. We also tailor the schedule and method of payment to the cash-flow prospects of our customers,”
Halim added.

In addition, Intraco Penta operates about 40 branches around the country that serve as service and maintenance centers and depots for Volvo machinery spare parts.

“We reach out to our customers even in the remote areas, such as Kalimantan and Sulawesi, and go ‘all out’ to minimize the downtime of the heavy equipment we sell,” Halim said.

“Take for example, a coal mining firm that intends to buy our equipment but has difficulties in marketing their coal competitively. We can help this company to sell its coal because one of our subsidiaries is an independent power producer in Batam,” added Intraco’s finance director Fred Manibog.

 

[Zero_wing]

good for Indonesia keep it going guys

 

[Reashot Xigwin]

African nations to use Africa Day to rejuvenate ties with RI
Veeramalla Anjaiah, The Jakarta Post, Jakarta | World | Tue, April 23 2013, 1:57 PM

African embassies in Indonesia will jointly celebrate Africa Day next month in Jakarta with several events, including a gala reception, a friendly soccer match as well as fostering relationships with Indonesia, African diplomat says.

“Africa Day is the most joyful day for all Africans. It also called Liberation Day. Indonesia had historical links to African liberation movements through 1955 Bandung Conference.

“Indonesia is a close friend of Africa. We would like to celebrate Africa Day with our Indonesian friends,” Sudan Ambassador to Indonesia Abd Al Rahim Al Siddig said at a press conference on Monday.

The ambassador said that African embassies would celebrate Africa Day on May 25 in Jakarta but as the day falls on a Saturday the celebration would likely be held either on May 23 or May 27.

“We are also planning a friendly soccer match against our Indonesian diplomats,” Siddig said.

Africa Day celebrates the establishment of the Organization of African Unity (OAU) on May 25, 1963. In July 2002, the OAU transformed into the African Union (AU) , which currently has 54 members.

Morocco, a North African country and one of the founders of the OAU, is not a member of the AU but Morocco maintains friendly relations with almost all African countries.

Indonesia, a close friend of Africa and one of the founding members of the Non-Aligned Movement, wants to revive old ties through new initiatives.

“We are currently actively focusing on Africa,” Foreign Ministry director of African affairs Lasro Simbolon told The Jakarta Post recently during a gathering of the Africa-Indonesia Press Association in Jakarta.

According to Siddig, Foreign Minister Marty Natalegawa will visit Africa next month to forge a strong partnership with the AU.

“The Foreign Minister will address a gathering of African leaders in the Ethiopian capital of Addis Ababa at the end of next month, coinciding with the Africa Day celebrations,” Siddig said.

The AU will be celebrating 50 years of the establishment of OAU this year. African leaders will gather on May 26 in Addis Ababa for their annual summit, which has a theme titled “Pan Africanism and African Renaissance.

President Susilo Bambang Yudhoyono also recently visited the area, stopping in Egypt, Liberia and Nigeria.

Commenting on Sudan-Indonesia relations, Siddig said they were moving in the right direction.

“We had a close relationship even before our independence. We got the inspiration to declare independence in 1956 after our leaders attended the 1955 Asia-Africa Conference in Bandung,” Siddig said.

Sudan, a North African country of vast arable land, wants to have close cooperation with Indonesia, especially in the agriculture sector.

“As we speak, the Agriculture Minister Suswono is currently in Sudan establishing cooperation in the agriculture sector. Both governments will sign a memorandum of understanding [MoU] in this regard [...] We are ready to give land to Indonesia to grow rice, oil palm and sugarcane,” Siddig said.

Indonesia’s state-owned oil and gas company PT Pertamina, Siddig said, is currently exploring oil in Sudan’s Block 13.

“If Pertamina finds oil in Sudan, we will once again sell oil to Jakarta. The newly formed oil-rich country of South Sudan last week agreed to pump oil through the existing oil pipeline in Sudan. So trade would reach almost a billion dollars again,” Siddig said.

African nations to use Africa Day to rejuvenate ties with RI | The Jakarta Post