GOVT HOPES RICE PRICE INCREASE WILL NOT RAISE INFLATION

by Andi Abdussalam
 

          Jakarta, Jan 27 (ANTARA) - The government hopes that the current price increases of rice in various parts of the country would not boost inflation, expressing its optimism that the annual inflation in January would still be below 3.0 percent.

         Of late, rice prices in various regions have been showing an upward trend. According to Agriculture Minister Suswono, Indonesian food supply is basically still secure in early stages of 2010.

         Indicators show that the December-January period is usually a critical period for Indonesian food supply with only an average of 2,000 tons of rice stock in the Cipinang main rice market in Jakarta.

         For the whole year 2010, however, the country's rice production target is expected to be met with a surplus of more than three million tons.

        "The target of 66 million tons of unhusked rice or more than 35 million tons of rice could hopefully be achieved in 2010 considering Indonesian success in 2009, where there was a 3 million tons of rice surplus,"  Suswono said in Padang on Sunday.

         Thus, the government hopes that the current increase in rice prices would not last too long so that inflation would remain at the targeted level this year. Finance Minister Sri Mulynai Indrawati has earlier predicted that inflation this year is expected to reach 5.0 percent. The inflation rate in 2010 would reach five percent, plus or minus one percent.

         Last month, Planning Director of the National Development Planning Board (Bappenas) Bambang Prijambodo predicted that  commodity prices would increase in 2010 and would likely  raise the inflation rate from about three percent in 2009 to about five percent this year.

         "The prices of two commodities, namely energy and raw materials, may pose a threat to the country's inflation in 2010," he said recently.

         He said that inflationary pressures would begin to be felt in January 2010 and by June the year-on-year inflation rates would likely be recorded at 5 to 5.6 percent. For the energy sector, pressures would come from non-subsidized fuel oils.

         Currently, rice prices have been showing an upward trend but Finance Minister Sri Mulyani Indrawati expressed her optimism that inflation in January would remain under  control, calling however, for a continuous watch on the rice price hike.

        "We have seen the price movements and it seems only the price of rice that has to be continuously monitored," she said on Tuesday.

         She admitted that the contribution of rice price in the inflation was still quite big, adding that the price of other commodities remained stable.  "The contribution of rice price to inflation is still quite big. Other than that I think it all remains stable," she said.

         The minister was also optimistic the annual inflation in January this year would still be below 3.0 percent.  "Annually, it is probably still below 3.0 percent," she said.

         The central bank's senior deputy governor, Darmin Nasution, earlier said the rate of inflation in the past two weeks was higher than normally it was. "Actually, in the past two weeks it is a bit higher than it is normally," he said.

         Danareksa Institute economist, Purbaya Yudhi Setiawan, meanwhile predicted the rate of inflation in January 2010 would reach 0.6 percent with the rice price hike being its main contributor.

         Thus, the rate of inflation in January 2010 would be higher than it was before due to the rice price hike. The rate of inflation in December 2009 reached 0.33 percent. The price of rice is affected much by the harvest season. If the harvest is late the price will rise, he said.

         In order to curb the inflation, the government is mulling nationwide market operations to stabilize rice prices which have steadily increased in several parts of the country since the past few weeks.

         "We will conduct market operations until rice prices are stable. But we also have to keep vigilant because  harvest time will soon arrive. The belated harvest time will give rise to rice oversupplies in April and May that may put pressure on rice prices," Deputy Agriculture Minister Bayu Krisnamurthi said.

         He said several factors had caused rice prices to soar in recent weeks although in general rice production showed no signs of problems. The current increase in rice prices was the result of the belated harvest time because of heavy rains in several parts of the country.

         "Nearly 10-15 percent of areas in Indonesia sees belated harvest time, causing rice prices to increase," he said.

         Quoting the results of a survey, he said a number of provinces, including East Java, Central Java and West Java were expected to see harvest time in mid-February.

         The rice price hike is also triggered by the government-set purchase price and poor inter insular rice shipment because of large waves. Several provinces, including Yogyakarta, West Nusa Tenggara, and Jakarta had already launched market operations.

         The subsidized rice sold in the market operations was Rp200-Rp500 lower than the normal prices and the government did not set a target of selling rice through the market operations, Krisnamurthi said.

         "The important thing is that the prices will not go up because in the past month they have been raised by an average of Rp1,000 a kg," he said.

         Rice prices in various parts of the country have increased to about Rp6,500 per kg. The increases vary in different regions, in Bengkulu for example, rice price has increased from Rp5,460 per kg last week to Rp8,000 per kg.

    

(T.A014/H-NG )  2010

JAKARTA BRACING FOR THURSDAY'S MASSIVE RALLIES

By Andi Abdussalam


Jakarta, Jan 26 (ANTARA) - The government is taking anticipatory measures and will deploy 10 thousand police personnel to secure massive rallies by about 10 thousand students and activists grouped in the Clean Indonesia Movement (GIB) to mark President Susilo Bambang Yudhoyono's first 100 days in office in Jakarta on Thursday.

        Jakarta Police Spokesman Senior Commissioner Boy Rafli Amar said 10,000 officers were being prepared for the day and would be deployed to safeguard several main areas where protest rallies were expected, including the Hotel Indonesia traffic circle, the State Palace and the House of Representatives.

         Ton Abdillah Has, one of the GIB initiators who is also secretary general of the Muhammadiyah Students Association (IMM), said the peaceful rallies would, among others, be held  in front of the State Palace on Thursday.

         He said that about 10 thousand demonstrators who were derived from at least 54 people's elements such as students, activists, non-governmental organizations, intellectuals and religious leaders would take part in the rallies.

         "The rallies will be held as an expression of the people's disappointment and concern over the government's present performance which we considered has yet to satisfy the people," Abdillah said.

         According to Abdillah, the people are not yet satisfied with the present government, particularly with regard to issues such as the alleged framing of the Corruption Eradication Commission (KPK) recently, the Rp6.7 trillion bailout provided for Bank Century and the implementation of the Free Trade Agreement (FTA) between Indonesia and China which they said would harm the interest of the people.

         "GIB calls on all of the nation's exponents who care for the nation's present fate to take to the streets to express their common concern," he said. He said that the government in its first 100-day program was not yet able to answer several pressing problems such as poverty, unemployment, health guarantee, quality education and legal justice for the people.

         It is on this objective basis that the 54 people's elements grouped in the GIB will organize the peaceful rallies outside the Merdeka Palace on Thursday, January 28.

         On a separate occasion, chairman of the People's Committee Presidium of the Indonesian Nationalist Students Movement (GMNI), Muhammad Item also voiced the same opinion.

         "We don't take the massive number of demonstrators for granted but we focus on the deployment of cadres and activists so that we would not disrupt public order and the people would be able to carry out their daily activities," Muhammad Item said.

         In the meantime, Chief Minister for Political, Legal and Security Affairs Djoko Suyanto said that the government was taking the necessary steps to anticipate the rallies on Thursday.

         "As it used to be, we will never underestimate rallies and will maintain security so that the rally would not turn wild, disturb public order,  violate the law and cause physical clashes," Suyanto said on Monday.

         He said that rallies were the manifestation of democratic expression which would always be given a room but on condition that they should not disturb public order and would always appreciate the people's daily activities.

         "The rallies should be held within the corridor of public order, guaranteed security  and peaceful people's activities. Please go ahead as far as they proceed peacefully and orderly without any vandalism," the minister said.

         In the meantime, Jakarta Military Commander Maj Gen Darpito Pudyastungkoro said the security condition around Jakarta in the run-up to the massive rallies was relatively guaranteed.  "Up to now, security condition remains conducive. It would be regrettable if irresponsible parties would capitalize on this conducive situation," he said.

         He said that so far there had not yet been any request from the police for military personnel to help them carry out security pacification during the rallies on January 28, 2010.

         Activists will hold rallies coinciding with the 100th day of President Susilo Bambang Yudhoyono's government. Rallies are also expected in other locations around the country on Thursday. In Palembang, South Sumatra, however, activists will start protesting a day earlier.

         They have been spreading invitations via mobile phone to rally on Wednesday and Thursday. One of the messages focuses on the Rp 6.7 trillion ($710 million) bailout of Bank Century, which rumors have links to corruption.

         To face the planned rallies, Jakarta Police are preparing 10 thousand personnel that would be rolled out to guard certain spots that would be used for activists to hold their rallies.

         According to Jakarta Police Spokesman Senior Commissioner Boy Rafli Amar, about  10,000 officers will be deployed to safeguard several main areas where protest rallies are to take place, including the Hotel Indonesia traffic circle, the State Palace and the House of Representatives (DPR).

         "A total of 10 thousands officers will be out in force to maintain peace," Boy Rafli Amar said adding that the police would also roll out a water cannon to keep the peace during the planned demonstration.

         The Jakarta government meanwhile called on demonstrators not to disturb public order and vandalize public facilities such as parks and flowerpots near the locations of their rallies.

         Based on previous rallies so far, many social and public facilities and city parks were damaged because demonstrators trampled on them. Jakarta Deputy Governor Prijanto, therefore, felt the need to remind demonstrators not to destroy public facilities when they hold their rallies.

         "We are calling on demonstrators not to disturb public order and cause damage to social and public facilities such as parks and flowerpots. We also hope that they would not litter the areas that could disturb the beauty of the city," the deputy governor said on Tuesday.

    
(T.A014/A/HAJM/A/S012)

INDONESIAN POLICE INVESTIGATING ATM SCAMS

By Andi Abdussalam

Jakarta, Jan 22 (ANTARA) - The Indonesian police are working closely with banks to protect customers and investigate this week's reports of ATM break-in cases which may cause national banks to lose about Rp5 billion.

         "The Criminal Investigation Department (Bareskrim) of the National Police has sent telegrams to all regional police chief detectives throughout Indonesia to report ATM break-in cases," Bareskrim Head Commissioner General Ito Sumardi said on Friday.

         The telegrams contained calls on all directors of Regional Police's Criminal Investigation Department to file reports on any ATM hacking case in their respective region.

         Previously some bank customers in Bali have reported that their money has been stolen by ATM hackers. They installed ATM skimming devices and spy cameras to steal information stored on the magnetic strip of customers' ATM cards  and duplicated them to rob customers accounts.

         Customers who lodged their complaints among others belonged to Mandiri Bank, Bank Central Asia (BCA), BII, Bank Permata, BRI and Bank BNI .

         Sumardi said that he had appointed Bareskrim's Director for Special Economic Affairs Brig. Gen Radja Erizman as chairman of a police team in charge of investigating cases of ATM hacking in a number of regions in the country.

         Police are gathering initial indications of their modus operandi for thorough investigation, including studying reports from all regional Bareskrim chiefs.

         "We will collect all information for further investigation," Sumardi said. Police will detect the syndication of the ATM hackers in a number of national banks in the country.

         So far, police have named a man identified by his initial as 'F'  a suspect in the theft of bank customers' money through forged ATM cards and PINs,  They also arrested two other suspects on Friday.

         The National Police's chief detective, Commissioner General Ito Sumardi,  said  F was suspected of having stolen the money kept at a number of banks in Bali.  The officers  have also confiscated  Rp23 million in cash, computers, several ATM cards and skimmers.

         General Ito Sumardi,  said F was suspected of having stolen the money kept at a number of banks in Bali.  He was believed he had been stealing money through ATM  break-in practice  for a long time.

         According to Director for Special Economic Affairs of the Police's Criminal Investigation Department (Bareskrim), Brig. Gen. Radja Erizman F was arrested in Jakarta. He was believed to be involved in the ATM scam because his modus operandi was the same as that of the syndicate that hacked the ATMs of national banks in Bali.

         The thieves  also use  spy cameras to know  the personal identification numbers (PINs) of bank customers.

         In the meantime, BCA said on Friday it was temporarily closing  its ATM for the withdrawal of funds from Australia. ATM break-in incidences have also been reported  in Australia.

         "For the time being, we are closing for the withdrawal of funds from Australia," BCA vice president director Jahja Setiaatmadja told the press on Friday.

         According to an AFP report,  an international criminal group has reportedly stolen some $50 million Australian ($45.5 million US) from customers who swiped their credit or debit cards at retail checkouts.    
    The spate of attacks on the so-called EFTPOS machines that typically sit next to cash registers is "the biggest I've ever seen," New South Wales fraud squad head Detective Superintendent Colin Dyson told the news site heraldsun.com.au.

         Police officials in Bali, however, said on Thursday that they had found a device used to steal the codes from ATMs.

        Ito Sumardi said the police were investigating a possible connection between the thefts and an international syndicate which is allegedly led by two Russians living overseas.

        The Jakarta Globe quoted Denpasar Police chief Senior Commissioner  Gede Alit Widana as saying on Thursday that in October 2009, the Jakarta police arrested seven local perpetrators but they're only the operatives, because the masterminds are two Russians in a foreign country.

         The police had located the leaders of the syndicate, he added, but they were unable to arrest them due to difficulties in extraditing them.

        "We discussed the case with the National Police and Jakarta Police and we are convinced the crime was conducted by the same syndicate," he said.

         According to Bank Indonesia  (BI/the central bank), the ATM break-in incidence could incur a loss to banks amounting to Rp5 billion . "From the reports we received until Thursday, we estimate the ATM attacks could cause a loss of Rp5 billion in at least four banks," BI Spokesman Difi A Johansyah said.

         However, BI guaranteed that money stolen by ATM hackers would be refunded.

    (T.A014/H-NG/H-YH)

FREE TRADE TO AFFECT RI'S INDUSTRIES, WORKERS

By Andi Abdussalam


Jakarta, Jan 9 (ANTARA) -  Certain industrial sectors of the  Indonesian economy  that are not yet ready  for the ASEAN Free Trade Area (AFTA) and ASEAN-China Free Trade Area (ACFTA) effective  January 1,2010  may  be forced to reduce or stop entirely their operations and thus cause the laying off of perhaps millions of workers.

         "Free trade will affect local companies' performance but it can  not be avoided because the ASEAN-China Free Trade Area (ACFTA) was agreed on a long time ago so that we have to abide by it,"  Operations Director of the Workers Insurance Company (Jamsostek), Ahmad Ansyori said on Saturday.

         He said that many studies had been made on the impact of the free trade area on domestic industries in Indonesia. Most of the studies showed that its impact would be a reason for concern as it would affect workers.

        A number of studies predicted that with the free trade area, about 2.5 million workers could face lay-offs due to the declining performance of industries in the country.  The most affected industries would be  leather processing, garment,  textiles and steel industries. The impact would be felt by hundreds of labor-intensive and small companies.

         "Based on the studies, about 2.5 million workers could face layoffs. However, I think the number of workers facing layoffs would not reach 2.5 millions but about 1.8 million," Ansyori said.

          He said that it would take place gradually, namely about eight months after the beginning of the free trade area. "I am sure the government will take mitigation measures if the free trade area massively weakens local industries. Probably the government would provide incentives and fiscal facilities as well as expansion of infrastructure projects and agribusiness development," he said.

         University of Indonesia (UI)'s economic analyst Ninaspati Triaswasti said meanwhile the ASEAN-China Free Trade Area  which began to be implemented as of January 2010 would affect certain industrial sectors  in Indonesia.

        "Certain industrial sectors such as garments and footwear industries could be affected by the free trade area," she said in a discussion on the fate of local industries after the imposition of the ACFTA scheme on Saturday.

         She said that over the past five years based on the available data, industrial product exports had continued to decline so that the imposition of the ACFTA would be a further cause for concern of industries and workers.

         After all, garment and footwear industries were labor-intensive  and provided employment for a large numbers of workers, meaning that the predicted layyoffs would also affect the people's welfare.

         With the ACFTA, Chinese products which were cheaper would flood Indonesian market. "The influx of Chinese products could threaten local industries whose products are more expensive," she said.

          She said the government could take protection steps such as delaying the implementation of the free trade for certain industrial products which were not yet ready to compete.

         The economic analyst said that the Indonesian government had signed the ACFTA agreement in 2002 but the government did not prepare domestic industries to face it.

         She said that over the past eight years, Indonesia actually had had the chance to prepare industries at home. Now, the government had to do its best to lower production costs as a result of the many barriers in the production process.

         "The government should have strong willingness to reduce production barriers of national industries so that their products can  compete in the local market with those coming from China," she said.

         She said that infrastructure such as roads, electricity and illegal levies were among the barriers that raised production costs that should be reduced to face the free trade area. The UI economic analyst said that production barriers of national industries should have been reduced since long following the signing by the government of the ASEAN-China Free Trade Area in 2002.

         "Over the past eight years, the government should have accelerated the development of infrastructure and other facilities such as electricity," she said.

         In the meantime, the government in the face of the free trade area is trying its best to renegotiate the rates of certain tariff lines.

         According to Coordinating Minister for Economic Affairs Hatta Rajasa, Indonesia is seeking to re-negotiate the rates of at least 455 tariff lines which, it thinks, have the potential to weaken  its domestic industries.

         Of the 455 tariff lines that need to be re-negotiated, 227 are under the Common, Effective Preferential Tariff (CEPT-AFTA) scheme involving Brunei Darussalam, Indonesia, Malaysia, Philippines, Singapore and Thailand, and 228 other tariff lines are under the Asean-China Free Trade Agreement, or ACFTA.

         Members of the Association of Southeast Asian Nations (Asean)  agreed to implement a CEPT scheme through the AFTA in 1992  and in 2002 Asean and China made a comprehensive cooperation agreement which became the basis for the negotiations in 2004 for the establishment of the Asean-China Free Trade Agreement (ACFTA).

         "Based on inputs from businesses a total of 227 tariff lines for the CEPT-AFTA need to be reviewed because they have potentials to weaken domestic industries,"  Hatta Rajasa.

         With regard the Asean China FTA a total of 228 tariff lines need to be reviewed. "It is the inputs from businesses that have made the government send a notification for renegotiations in the framework of both of CEPT AFTA and Asean-China FTA," he said.

    (T.A014/A/HAJM/23:10/H-YH)

(T.A014/A/A014/A/H-YH) 09-01-2010 23:26:24

THE OKEANOS AND INDONESIA'S UNDERWATER RESOURCES

By Andi Abdussalam


Jakarta, Jan 6 (ANTARA) - The Indonesian government will supervise the operations of a US oceanic research vessel, the 'Okeanos', which will undertake studies  on Indonesia's undersea geological, biological and mineral resources in North Sulawesi in June.

        "We take into account the country's sovereignty when we establish cooperation (with other countries), including cooperation with the United State which will deploy the Okeanos for sea explorations in Sulawesi," Defense Minister Purnomo Yusgiantoro said on Wednesday.

         Explorations in the Sulawesi Sea by the US vessel,  said to be the most modern of its kind, will be supervised by assigning an Indonesian representative on the research ship.

         It was reported earlier that the Okeanos is to explore the seas north of Sulawesi starting next June under a 10-year cooperation agreement with the Indonesian government. The explorations will be carried out as a follow-up to a bilateral agreement on cooperation in research, technology and their application in marine resources and fisheries signed on September 18, 2007.

         "Departmental permits for the Okeanos to begin its operations in Indonesian waters are expected to be issued by the middle of this year," Marine Resources and Fisheries Minister Fadel Muhamad said meanwhile.

          The cooperation agreement was valid for a period of 10 years and the first part of Indonesian seas to be studied would be those located north of Sulawesi.  "I hope the research will extend to the Bay of Tomini," Fadel said.

        Indonesia is rich in unrevealed marine biodiversity resources. So, the cooperation is expected to benefit both sides.

         According to Jane Lubchenco, NOAA (National Oceanic and Atmospheric Administration) coordinator, the cooperation will be started by explorations using the US research ship "Okeanos" in cooperation with Indonesia's research ship Baruna Jaya.

         She hoped the explorations will result in new findings, enable the drawing up of  maps of the seabed, locate underwater volcanoes and the charting of other things of geological and biological significance.

         Indonesia, she noted, was endowed with life forms of enormous biodiversity and many of the species they encompassed had so far remained undescribed. "The explorations will be done in Indonesian seas about which little is known so far," she said.

         Hasyim Djalal, an Indonesian expert on law of the sea, acknowledged that many of Indonesia's marine resources had so far remained unknown.

         "We are rich in unknown marine resources. Our technology is not yet able to describe them all so that we need cooperation in exploring them. Cooperation had better be aimed at exploring mineral resources," Hasyim Djalal said.

          He said Indonesia was rich in marine resources such as minerals, energy and marine species which were not found in other countries. But to make sure whether these resources really existed Indonesia needed to carry out explorations and research to know whether the resources could really be developed in viable economic terms.

         Indonesia has actually established research cooperation ties in the marine sector with many countries, including China and Japan. It has also established research cooperation with  other countries on seabed research. And cooperation with NOAA is more aimed at mineral research, according to Djalal.

         Hasyim Djalal said that mineral resource consisted of two types, namely liquid and solid matter. Solid mineral resources are already known such as tin deposits along the coast of Bangka Belitung but liquid mineral resources  under the seas had remained unknown, he said.

         As technology continues to advance, it is learned that many strategic mineral resources are found in deep sea mountains. In the Western Pacific, there are at least 50,000 sea mountains. The same number also exists in the South Pacific.

         "We know where surface volcanoes are located but don't know where the sea mountains are," he said.

         He said the locations of many of Indonesia's undersea mountains were in the Indian Ocean, where the sea current flowed and passed on the seabed and on the sea mountains in the area, leaving mineral deposits. So, in millions of years they produced mineral resources such as gold, nickel and cobalt.

         As Indonesia is yet to have technology that could  help explain all these, it needs to cooperate with other countries, one of which is the United States.

         In regard to the explorations in the North Sulawesi seas,  the United States government has been constantly making intensive preparations for its most modern research ship "Okeanos" for the explorations in Sulawesi's northern waters starting in June 2010.

         "They have explained what they will be doing in the explorations in the Sulawesi sea with their 'Okeanos' research ship," Defense Minister Purnomo Yusgiantoro said after receiving US Ambassador to Indonesia Cameron R Hume in Jakarta Tuesday afternoon.

         In the closed-door meeting, it was said that the research vessel was currently still in Hawaii, and will start explorations in mid-2010.

         Earlier, President Susilo Bambang Yudhoyono has given the green light for "Okeanos" to enter Indonesia's territorial seas to conduct explorations.

         US President Barrack Obama fully supported the development of science, which is important to the world and to Indonesia as well, according to Lubchenco.

    

(T.A014/A/HAJM/19:04/a014)

INDONESIAN EXPORTS EXPECTED TO GROW THIS YEAR

By Andi Abdussalam


Jakarta, Jan 5 (ANTARA) - After going down a year earlier on global financial crisis, Indonesia's exports, particularly non oil/gas ones, are expected to regain strength this year with an estimated increase of about 6 to 7 percent.

         "We are more optimistic about export growth based on the assumption that the non-oil/non-gas export volume in the 2010 state budget is 6-7.5 percent," Trade Minister Mari Elka Pangestu said on Tuesday.

         Data showed that Indonesia's non-oil exports in 2009 kept improving in line with global economic recovery, though the export performance is expected to remain below the 2008 figure.

         According to  the head of the Central Bureau of Statistics (BPS), Rusman Heriawan, Indonesia's exports in 2009 may drop by 10 percent as expected.  "Total exports in 2009 will depend upon the performance in December. If it is good, total exports may drop only 10 percent as expected. Right now the value is still minus 13.17 percent for non-oil and gas exports," he said.

         The BPS noted exports from January to November 2009 reached US$103.15 billion, dropping 19.5 percent from the same period of 2008. The value of non-oil and gas exports in the period reached US$86.64 billion, sliding 13.71 percent from the same period of 2008.

         The BPS also reported earlier that Indonesia enjoyed a US$14.27 billion surplus in its trade balance in the January-October 2009 period even though its exports during the period experienced a decline.

         "Our trade balance in October 2009 enjoys a surplus of US$2.41 billion and in the January-October 2009 period US$14.27 billion," Head of the Central Board of Statistics (BPS) Rusman Heriawan said
    However, the accumulative values of Indonesia's exports in the January-October 2009 period were recorded at US$92.03 billion, down 22.31 percent in the corresponding period a year earlier.

         But the value of Indonesia's exports for the January - November 2009 was recorded at US$103.15 billion which was a drop of about 19.5 percent compared with that in the same period in 2008.

         Though it dropped by 13.71 percent in 2009, non-oil/gas exports are expected to increase in 2010 in line with the global economic recovery.

         "Exports in 2010 will be positive along with the global economic growth by about 3.2 percent, especially in the emerging markets such as China and India which are expected to see rapid growth.

         Pangestu explained that during 2009, the market segment of Indonesian exports in emerging market countries like China increased from 6.2 percent in 2004 to 8.9 percent in 2009.  
    "It shows that China's economic growth is good and there is potential use of lower tariffs for certain products such as crude palm oil (CPO). Before the free trade agreement (FTA)'s implementation, CPO exports used a quota, but after the FTA the quota system will be phased out," he said.

         Besides China, the market segment of Indonesia's exports to India also rose from 3.7 percent in 2004 to about 5 percent in 2009.

         "The market segment of our products in South Korea rose from 3.3 percent in 2004 to 5.2 percent in 2009. The emerging markets in Asia were still in positive growth in 2010 and the growth will remain
high," she said.

         Non-oil/non-gas exports to Indonesia's traditional markets such as the United States, Japan and European Union which dropped during the global economic crisis were expected to increase in 2010.    
    "Some of our export products volume like textiles, electronic goods and other consumer goods are expected to increase," she said.

         Like its exports in 2009, Indonesia's imports in that year also declined, namely by 28.75 percent.  Indonesia's imports in November 2009 fell 6.39 percent to US$8.86 billion from a month earlier, bringing to US$86.58 billion the total imports in the first eleven months of last year.

         "In the January-November 2009 period the total imports reached US$86.58 billion, down 28.75 percent from the same period in 2008," BPS Chief Rusman Heriawan said.

         Non-oil/non-gas imports in November 2009 dropped 6.4 percent from the month before. In the January-November 2009 period non-oil/non-gas imports stood at US$69.69 billion, he said.

         "China was the biggest supplier of our imported goods, with Japan and Singapore trailing behind," he said.

         He said the import of raw/auxiliary materials dropped 33.71 percent, consumer goods 23.28 percent and capital goods 6.84 percent in November 2009 compared to a month earlier.

         According to Trade Minister Mari Elka Pangestu, the volume of five consumer products  subject to trade ministry regulation Number 56/2008, namely food,  beverages, garments, electronics, shoes and toys also experienced a decline in 2009.

       "The regulation has worked well. The importers are now registered and so we can see the pattern better," Trade Minister Mari Elka Pangestu.

       She said imports of children's toys mostly from China had dropped significantly. Based on the trade ministry's record imports of children's toys from January to September in 2009 reached US$48.9 million or dropped by 33.8 percent compared to the same period of 2008.

    

(T.A014/A/HAJM/22:55/a014)

RI TO RENEGOTIATE OV ER 400 AFTA TARIFF LINES

By Andi Abdussalam


Jakarta, Jan 6 (ANTARA) - While the rates of additional tariff lines are being reduced to zero under the Common Effective Preferential Tariffs for the ASEAN Free Trade Area (CEPT-AFTA) as of January 2010, Indonesia is seeking to re-negotiate the rates of at least 455 tariff lines which, it thinks, have the potential to weaken  its domestic industries.

         Of the 455 tariff lines that need to be re-negotiated, 227 are under the CEPT-AFTA scheme involving Brunei Darussalam, Indonesia, Malaysia, Philippines, Singapore and Thailand, and 228 other tariff lines are under the Asean-China Free Trade Agreement (ACFTA).

         Members of the Association of Southeast Asian Nations (Asean)  agreed to implement a CEPT scheme through the AFTA in 1992  and in 2002 Asean and China made a comprehensive cooperation agreement which became the basis for the negotiations in 2004 for the establishment of the Asean-China Free Trade Agreement (ACFTA).

         "Based on inputs from businesses a total of 227 tariff lines for the CEPT-AFTA need to be reviewed because they have potentials to weaken domestic industries," Chief Economic Minister Hatta Rajasa said on Monday.

         With regard the Asean China FTA a total of 228 tariff lines need to be reviewed. "It is the inputs from businesses that have made the government send a notification for renegotiations in the framework of both of CEPT AFTA and Asean-China FTA," he said
    For this purpose, Indonesia has set up a special team with members from various ministries and businesses to anticipate the impact of the implementation of the Asean-China Free Trade Agreement and CEPT AFTA.

         "We are responding quickly by asking  businesses to work together  with the government to anticipate possible disadvantages for our industries," the chief economic minister said.

         According to the ASEAN Secretariat on Monday,  as of 1 January, 2010, for ASEAN-6, an additional 7,881 tariff will be reduced to zero, bringing the total tariff lines under the CEPT-AFTA to 54,457.

         The tariff rates include final consumer products such as air conditioners; chili, fish and soya sauces; as well as intermediate materials such as motorcycle components and  car cylinders. Other products include iron and steel, plastics, machinery and mechanical appliances, chemicals, prepared foodstuffs, paper, cement,
ceramics and glass products.

         The tariff elimination by ASEAN-6 (Brunei Darussalam, Indonesia, Malaysia, Philippines, Singapore and Thailand) underscores ASEAN's commitment to dismantle the tariffs and keep intra-ASEAN trade open. It will also serve as a catalyst for the development of the single market and production base projected in the ASEAN Economic Community (AEC) Blueprint.

         Hatta Rajasa said the Indonesian government set up the team to settle obstacles in the industry and trade with members coming from various ministries and institutions concerned and businesses.

         The team is expected to be able to improve the effectiveness of domestic market protection efforts from smuggling and also play a role in protecting and monitoring domestic flows of goods.

         "The team will also assure that all goods and services meet the Indonesian National Standards of health, security and environment," he said.

         In general the team's focus will be on strengthening export markets, improving land use and spatial order, infrastructure and energy development, extension of incentives, development of special economic areas, expansion of financing access and interest cost reduction as well as logistics system development.

         As to the tariff lines with ACFTA, the government is collecting materials for renegotiation with China.    
    According to Industry Minister MS Hidayat, the materials had been presented to the coordinating minister for economic affairs as the coordinator of a joint government team to prepare for the ASEAN-China FTA.

         The industry ministry identified a number of findings including an indication that the ASEAN-China  FTA would lead to unfair trade practices as China would give a tax discount of 14 percent to major exporters.

         The tax discount could be categorized as s subsidy to Chinese major exporters, while Indonesia did not give any subsidy to its exporters, the minister said.

         The  ministry had also presented the details of eight industrial sectors with 228 tariff posts to be affected by the ASEAN-China FTA.

         The industry ministry had also proposed tariff modification for several industrial sectors previously expected to be implemented in 2010 but could be postponed until 2012-2018.

         Starting in early  2010 under the ACFTA, Indonesia will set its foot in the free trade arena in the five ASEAN founding countries and China. The five ASEAN founding countries are Indonesia,  Malaysia, Singapore, the Philippines, and Thailand.

         In this case, Indonesia needs to increase its product competitiveness in facing the  ACFTA. According to economic analyst of the Yogyakarta Muhammadiyah University (UMY) Lilies Setiartiti,  raising the competitiveness needs to be done by improving internal aspects like the existing inefficient bureaucracy.

         An inefficient bureaucracy will also lead to an equally inefficient business. ACFTA is not only aimed at increasing cooperation in trade and economic liberalization, but seeking new areas or markets in the countries involved as well.

         "Indonesia has no need to hurriedly seek other countries for the marketing of its products, but first needs to improve its internal capacities to be enable it to compete with Chinese goods flooding Indonesia," she said.

    (T.A014/A/HAJM/14:00/f001)