MORE FUNDS NEEDED FOR INFRASTRUCTURE EXPANSION

 By Andi Abdussalam

          Jakarta, Aug 28 (ANTARA) - The total fund of Rp361.45 trillion allocated from the draft state budget of 2013 and other sources, will be inadequate for developing infrastructure in the country and maintaining a sustainable economic growth rate.

         Ideally at least 5 percent of the Gross Domestic Product (GDP) should be assigned for infrastructure development and achieving sustainable economic growth.

         The draft state budget has set aside Rp188.4 trillion for this purpose, while the regional budget will contribute Rp96 trillion, Rp77 trillion will come from state-owned companies and about Rp60 trillion from the private sector.

         Therefore, the total Rp361.45 trillion promised for development only accounts for 4.56 percent of the GDP, which is less than the 5 percent needed.

         "Funds for infrastructure development have been culled not only from the state budget, but also from other sources, and if taken together the total amount will not account for more than 4.56 percent, which is lower than the required 5 percent for maintaining sustainable economic development," Minister for National Development Planning Armida Salsiah said on Tuesday.

         She also pointed out that prior to the economic crisis of 1998, the Indonesian government always set aside a fund for infrastructure development amounting to about 7 percent of the GDP, but after the crisis, this allocation has dropped to about 3.5 percent.

         "Now we are trying our best to gradually raise the budget for infrastructure to 5 percent," Salsiah stated.

         "However, even the 5 percent is not sufficient for carrying out poverty elimination programmes, because if the state does that, it will have to further increase its investment in infrastructure expansion to between 7 percent and 8 percent of the GDP," she added.

         The minister said that funding for infrastructure growth will be raised gradually. For this purpose, the government is collaborating with state-owned firms and the private sector to expand infrastructure in various sectors under the Master Plan for the Acceleration and Expansion of Indonesia¿s Economic Development (MP3EI).

         For instance, the Indonesian government has set aside a budget of US $20 billion for investment in infrastructure development in the transportation and energy sectors.

         Finance Minister Agus Martowardojo said last year that the investment for infrastructure growth in the 2010 to 2014 period is estimated at Rp1,400 trillion. However, the government has only been able to finance around 30 percent of this total figure.

         The government also plans to accelerate infrastructure development to help integrate the country's six economic growth corridors, offset inflation and boost finished goods exports.

         If these plans are implemented effectively, the Indonesian economy could grow between 7.1 percent and 7.6 percent during the 2011 to 2014 period. It even has the potential to reach 8 percent if infrastructure is improved quickly.

         "If the participation of the private sector reaches 50 percent of the total amount needed, and if the government increases it¿s spending for transportation infrastructure to 20 percent, then the goal of 8 percent economic growth is achievable," Fauzi Ichsan, a senior economist at the Standard Chartered Bank said.

         Referring to the development of road infrastructure, President Susilo Bambang Yudhoyono said the government has set aside US $20 billion or Rp$190 trillion for the country¿s infrastructure development in 2013.

         "Most of the funds will be needed to develop the energy and transport sectors,¿ Yudhoyono said during the inauguration of the Asia Pacific Ministers and Regional Governor Conference (APMRGC) on sustainable infrastructure development on Tuesday.

         With the budget set for 2013, the government plans to extend national roads by 4,218 kilometers, build an additional 559 kilometers of new roads, and lay down 380 kilometers of new railway tracks and develop 15 new seaports.

         These sustainable and continuous infrastructure development efforts are aimed at meeting the development goals for the millennium. ¿The development of infrastructure facilities such as bridges will positively impact people¿s economy,¿ the president said at the Indonesia International Infrastructure Conference and Exhibition (IIICE) 2012.

         However, Indonesia still needs around US $250 billion for further infrastructure development.

         "Indonesia is always open to other countries or private parties investing here," Yudhoyono said, adding that faster development of infrastructure is needed to sustain the economic growth of the region.

         The president said he hopes that APMRGC will end by encouraging stronger cooperation for infrastructure development among the regional countries.

         Altogether, he pegged the cost of infrastructure construction in the country at US $250 billion.

         These funds will be needed for the advancement of electricity, energy, roads, railways, airport and seaport infrastructure and for expanding the country¿s information and communication technology systems, he said.

         The president therefore invited governments and investors from other countries to participate in Indonesia¿s infrastructure development.

         "In order to support the program, we have forged various comprehensive and strategic partnerships. We have developed a public-private partnership (PPP) scheme, which should hopefully attract more investors," he said.

         He also pointed out that many of the ongoing infrastructure projects under the MP3EI programme have been financed through this scheme. ***2***

(T.A014/INE/A014/KR-BSR/A/A014) 29-08-2012 16:56:1

DROUGHT FORCES VILLAGERS TO DRAW WATER FROM MUD PUDDLES

By Andi Abdussalam

Jakarta, Aug 25 (ANTARA) - It might sound too sarcastic to say that the on-going drought has forced locals to consume dirty, foul-smelling water from mud holes, but this is the reality for hundreds of residents of a West Java village.          Since early this month, hundreds of residents of Argasunya village, Harjamukti sub-district, Cirebon district, West Java, have been forced to draw water from puddles in the Kalijaga River, which is drying up.          Residents of the village have had to consume muddy water because the water supply from the regional government's tap water company PDAM has not yet reached them.          The river, which has serves as a water source for villagers during the rainy season, is now dry, without even a stream.          "The PDAM facility has not yet been installed in this village," Harun told a group of newsmen. According to Harun, many parts of Kalijaga River upstream areas are used as fishponds, leaving the down stream areas to run empty and form wallows with muddy water.          Yati, another resident of Argasunya, said she was compelled to consume dirty water from the river's puddles because she had no choice. In addition, it is difficult for local residents, whose income is low, to afford costly PDAM water.          She only hoped that the regional government of Cirebon city would supply them with clean water for free so that the residents could stop consuming dirty water.          Chairman of the Cirebon City Regional Legislative Assembly (DPRD) Nasrudin Azis admitted that some of Cirebon city residents faced a water scarcity problem because they were not able to receive the PDAM supply. He also expressed hope that PDAM would install water supply facilities in the village.          Residents of Cirebon's neighboring district of Tasikmalaysa also faced water supply problems from the PDAM.  Tasikmalaya's PDAM is even running short of raw water from a number of its water sources due to the current drought.       Masdiat, the technical director of PDAM Tirta Sukapura tap water company, said because of the company's declining clean water supply it imposed rotational water supply cuts for customers.          He added that his company was forced to carry out rotational water supply cuts so it would be able to provide water to all of its customers. "The water volumes are depleted during the drought so that supply to customers is being hampered. Some locals have complained of having obtained no water," Masdiat noted.          Masdiat explained that PDAM Tirta Sukapura's water supply has recently dropped from 400 to about 380 liters per second.          He said that the depleting water volumes reduced water pressure in higher locations so the supply to customers living in higher places was hampered.         Moreover, people living in communities located at higher elevations are the first to feel the impact of dryness, as their wells empty. This is what happened to residents in a number of villages in the valley of Mount Merapi in Boyolali district, Central Java.          Since the dry spell began, villagers in Musuk sub-district, for example, have suffered from water scarcities.          Water sources such as wells and springs have dried up. A villager, 32-year old Ajik from Sruni hamlet, said that villagers now have to purchase water. But those who could not afford it were forced to go to another low-lying village, where water in some wells and other sources is still running.          "The water in some springs in the village still run, but it is far away so we also have to buy it and bring it with a tank truck. The price for a 6,000 liter truck tank is Rp75,000," Ajik said.          Besides Sruni, other villages that suffered from water scarcities in Boyolali district included Mriyan, Sangup and Lanjaran.          Villagers from Lanjaran have to descend a steep cliff in order to receive water from a neighboring village. But Suganto of Lanjaran said water has also become difficult to obtain in the neighboring village in the past several days.          People outside Java, such as in Bali, Kalimantan and Sumatra, also endured the same fate.  In Selisihan Village, Klungkung district, Bali, for example, at least 270 families have faced shortages of water in the past three months after the tap water from PDAM stopped running.          "To meet our daily need for water, we have to take it from a river about 800 meters away from our settlement," Selisihan Village Head Wayan Dana said.          Wayan added that Selisihan Village officials have reported the halting of the tap water. "But our report was not seriously responded to," Wayan said, adding that in the past a customer was late paying his bill, and thereby was fined Rp1 million.          He regretted the slow service of the local tap water company. Director of the PDAM for Klungkung district, Gede Darsana, said the tap water supply to Selisihan village stopped running because the water source was located in a hilly area that was difficult to reach. During the ongoing drought, the tap water company also reports that water pressure has been reduced.          "Selisihan has the same problem as Payungan, which is situated in hilly areas," Gede said.          In the meantime, most of the residents' wells in Pangkalpinang, capital of the Sumatran province of Bangka Belitung, have also dried up. This caused a water crisis in the city. "Many wells have dried up in the past four days," Sumarni, a resident of Gabek Pangkalpinang, said.          She noted that many city dwellers have requested help from neighbors whose wells still had water, while others were forced to dig new wells. Also, some residents avoid taking regular baths and washing their clothes.          Sumarni said this year's water crisis was worse than last year.  "Some wells are completely empty, while last year they still had water which could be collected for taking baths and washing down the water closets," she added.          Additionally, in Central Kalimantan, especially in Kota Kuala Kapuas, it is feared that the current dry spell will cause saline water to seep into ground water sources, posing a threat to health.          "This can cause outbreaks of diarrhea because the water is no longer suitable for drinking. The salinity of the Kapuas Murung river has exceeded the safety standard level as set by the PDAM," President Director of PDAM Kapuas, Sri Hardjito, said on Friday.          The high salinity of the river water, which is the people's main source of water, is endangering people residing along the river banks.          "The salinity content of  Kapuas Murung river has reached 1.500 ppm, which far exceeds the normal level of 17 ppm. If this is consumed it would cause diarrhea," he said. ***3*** (T.A014/INE) (T.A014/A/KR-BSR/A/A014) 25-08-2012 17:04:0

DROUGHT BEGINS TO SEVERLY AFFECT FARMERS, FOOD CROPS

By Andi Abdussalam           Jakarta, Aug 24 (ANTARA) - The ongoing drought in Indonesia has begun to affect food crops in various parts of the country, as farmers continue to face a shortage of irrigation supplies, which are resulting in a low crop yield, especially for rice.          Latest reports suggest that provinces such as West Java, Central Java, Banten, Bengkulu in Sumatra and East Nusa Tenggara have already been adversely impacted by the current drought.          In West Java, the regional government has set aside a fund worth Rp15 billion for handling drought-related disasters such as shortage of clean water and for plugging the agricultural irrigation deficit.          "The government had already predicted that West Java will be one of the nine provinces in the country, which will be prone to drought," Sigit Ujuwalaprana, the head of the West Java Regional Disaster Mitigation Agency said on Friday.          Meanwhile, anticipating poor harvests in the region, the Agricultural Service of West Java had already announced earlier that for the period of January to July this year, a total of 2,345 hectares of rice fields will fail to produce harvestable rice.          "Up to July 2012, the dry spells affected 38,111 hectares of rice fields, of which 166,923 were affected slightly, 9,939 hectares were relatively impacted more, 9,541 hectares were seriously damaged and 2,345 hectares failed to yield any rice," Uneef Primad of West Java Agricultural Service said.          The rice fields in West Java, which failed to yield a harvest, have been found in the districts of Sukabumi, Cinanjur, Garut, Tasikmalaya, Ciamis, Kuningan, Cirebon, Majalengka, Sumdang, Subang and Purwakarta.          "The hardest hit was the district of Sukabumi, where around 988 hectares of land failed to produce a harvest, followed by Ciamis with 399 hectares, Kuningan with 389 hectares, Subang with 136 hectares, Cirebon with 109 hectares, Majalengka with 82 hectares, Cianjur with 91 hectres, Garut with 77 hectares, Tasikmalaya and Sumedang with 26 hectares each and Purwakarta 22 with hectares," Primad said.          He added that he hopes that the drought does not hamper the regional government¿s target of planting rice over 2,008,015 hectares of land in the region for the October 2011 to September 2012 planting season. Until July this year, only about 1,775,040 hectares of land had been covered under rice plantation.          To handle the current drought situation, the provincial and district governments will provide alternative sources water through the construction of wells and clean water tanks, which will receive water from the regional government-owned tap water company PDAM, Ujuwalaprana from the West Java Regional Disaster Mitigation Agency said.          "14 districts have been declared drought prone, especially those which are largely made up of agricultural land and have failed to produce a rice harvest this year," he noted.          The neighboring province of Banten is also reeling under the impact of the region¿s ongoing dry spell.          The Lebak district in this province has been hurt the most by the drought, with the regional mitigation agency (BPBD) pegging its loss at about Rp90 billion.          "Drought has hit rice fields in 17 sub-districts and caused clean water scarcity in 19 others," Muklis, chairman of the BPBD said in Rangkasbitung, the district capital of Lebak on Wednesday.          Other sub-districts that are also facing clean water shortage include Wanasalam, Cilograng, Malingping, Panggarangan, Cihara, Rangkasbitung, Cibadak, Sajira, Cimarga, Muncang, Cipanas, Warunggunung, Cileles, Cijaku, Gunungkencana, Leuwidamar, Cikulur and Cijaki.          The local government has declared an emergency in the region from August 14 to September 14 on account of the drought.          "We have recorded a loss of Rp90 billion, and will now spend Rp4 billion on building pump wells to supply water to regions facing shortage," Muklis said.          The acreage of damaged rice fields in the region has reached 4,000 hectares. The head of the Lebak Agricultural Service Dede Supriyatna said farmers are also seeing their rice crop fail because most of them cultivate lands in the marginal areas.          To support these farmers, his office is willing to provide them with crop seeds to help reduce the burden of their losses, Supriyatna said. ¿I think the government has the obligation to assist them.¿     The parched season has also caused damage to rice fields in Central Java. In the district of Banjarnegara, for example, at least 202 hectares of rice fields have failed to produce a harvest.          "Till the first week of August, 202 hectares of rice farms had been affected by the drought.  They are located in many sub-districts, including the sub-districts of Susukan, Mandiraja, Banjarmangu, Punggelan, Pandanarum and Kalibening," Head of the Banjarnegara Agricultural Service Dwi Atmadji said.          The drought has not only hurt agriculture in Java, but also in Sumatra and Nusa Tenggara.          In East Nusa Tenggara, at least 110 villages out of the 403 spread across 11 districts, are facing serious food scarcity. About 227 others are facing the same situation, but to a lesser degree.          "We are facing food scarcity because of the drought and uncertain weather conditions that have caused the local people¿s crops to fail," Alexander Sena, the head of East Nusa Tenggara Food Resilience Affairs said on Friday.          To tackle the food scarcity threat, the regional government of East Nusa Tenggara is stocking up 1,000 tons of rice. ¿We are now preparing the stocks, which will be stored in a warehouse of East Nusa Tenggara¿s national logistics agency Bulog,¿ Frans Salem, the regional government secretary of East Nusa Tenggara said.          In the Sumatran province of Bengkulu, farmers have been hurt by the drought in the last few months, which has affected at least 400 hectares of rice fields. ¿Even though the dry spells began several months ago and water levels started depleting, it is only in the last one month that we have felt the serious effects of the drought,¿ Ibnu Hafiz, a farmer pointed out.          He added that the region has experienced scanty rainfall since the middle of 2011, because of which the water levels in Lake Dendam Tak Sudah have continued to plummet. The lake is an important source of water for farm lands in a number of villages such as Jembatan Kecil, Panorama, Dusun Besar, Semarang, Tanjung Jaya and Tanjung Agung.          "Of the 400 hectares of rice fields, only less than 100 hectares were planted with rice due to the shortage of water. Despite that, 75 percent of these 100 hectares has already been damaged because of the dry weather," Hafiz said.          He also pointed out that farmers, whose land is near a water source, have tried to solve their water shortage problem by using machine pumps to draw water, but operating these pumps can cost up to Rp30,000 a day.          "If we do not irrigate our rice fields with water using these machines, we stand to suffer losses of around Rp10 million per hectare," he stated. ***2*** (T.A014/INE/B003)KR-BSR/B003) 24-08-2012 20:13:40

RURAL DEVELOPMENT NEEDED TO STEM URBANIZATION

By Andi Abdussalam

Jakarta, Aug 22 (ANTARA) - The government should direct all its resources and developmental efforts towards rural areas in order to create better employment opportunities for local residents, which will help improve their quality of life and also prevent large-scale migration to urban centers.          An imbalance in development and unequal distribution of resources has resulted in the concentration of wealth in metropolises and made urban dwellers prosperous, which is also a reason why people living in rural areas want to migrate to these cities, but the recent increase in migration has also produced social disparities and unrest.          High urbanization levels can also boost crime rates in metropolises, sociologist Musni Umar of the National University said on Wednesday.

OVER 100,000 PRISONERS GET SENTENCE CUTS

By Andi Abdussalam

Jakarta, Aug 21 (ANTARA) - A total of 108,376 inmates have been granted sentence reduction on the occasion of the country's 67th independence anniversary on August 17, as well as during the Id-ul-Fitr post-fasting festivities this week.          Of them, 58,595 prisoners were granted sentence reduction on the occasion of Indonesian Independence Day, while the rest 49,781 saw their sentences cut on Id-ul Fitr.          General remission is divided into General Remission I and General Remission II. Inmates who get General Remission I have their jail term commuted, while those who get General Remission II can walk free.          There is also a 'Special Remission', consisting of Special Remission I and Special Remission II, which is granted to prisoners who either had their sentences commuted or were to be freed from prison.          Of the 56,349 prisoners who were granted sentence cuts, 2,246 got General Remission II. Meanwhile, of the 49,781 granted special remission, 793 got Special Remission II.          "A total of 58,595 people's jail terms have been reduced on Independence Day. However, a slightly fewer number of prisoners have had their sentences reduced on the Id-ul-Fitr," Justice and Human Rights Minister Amir Syamsuddin said at the Cipinang Penitentiary in East Jakarta, ahead of the Independence Day celebrations last week.          The minister noted that the general and special remissions were granted on the basis of government regulation No. 32/1999 on the Terms and Procedures for Implementation of the Rights of Inmates, as well as of Presidential decree No. 174/1999 on Sentences Reduction.          For corruption convicts, remission is regulated through government regulation No. 28/2006 which came into effect after the amendment of government regulation No. 32/1999.         "As per government regulation No. 28/2006, their sentences will be cut by six months if they have exhibited good behaviour," Syamsuddin noted.          A total of 153,246 people, comprising 50,275 prisoners and 102,971 inmates, were locked up in prisons throughout Indonesia until August 2012.          In the meantime, more than half --1,276 of 2,336 -- inmates of the Nusakambangan penitentiary were granted sentence cuts, including 32 who walked out free from the country's largest penitentiary, on the occasion of the country's Independence Day.          The penitentiary of Nusakambangan, an island situated a few miles south of Cilacap in southern coast of Central Java, is notorious for housing criminals convicted of serious offenses, such as murderers and corruption and drug convicts.          "Among the inmates are 53 death-row prisoners and 74 convicts serving life imprisonment," said Hermawan Yulianto, the head of the penitentiary.          Inmates who were given sentence remissions include Indonesian nationals as well as foreigners.          In the Indonesian island resort of Bali, for example, the prison term for Australian drug convict Schapelle Leigh Corby was reduced by six months.          "Corby has received a six-month remission, along with fellow convict and Australian national Rene Lawrence," Minister Amir Syamsuddin said.          The minister also pointed out that the remission given to Corby was no different from the sentence cuts granted to other inmates, ¿which were granted on grounds of good behaviour at the correction centres¿.          "Corby's name will be removed from the remission recipient list if we receive a note of complaint from the correction centre," Syamsuddin stated.          "Remission is every inmate's right and should certainly not be used for discrimination, as per government regulation (PP) No. 28/2006, laid down in the Terms and Procedures for Implementation of the Rights of Inmates," he added.          Other foreign inmates whose prison terms were cut on Independence Day include Peter Achim Franz Grabmann from Germany, Jean Marc Patrice Garcia from France, and Malaysian national Lem Tian Soon Tian, all of whom were granted a two-month reduction in their sentences.          In addition, Gary Matin Turner from Great Britain and Mohammed Umar Ranggaswamy from India were granted a four-month remission.          Some corruption convicts also saw their sentences commuted.     Dedi Sutardi, the chief of the Sukamiskin detention centre in West Java, said the government had ordered a reduction in the sentences of corruption convict Gayus Tambunan and murder convict Pollycarpus Budihari Priyanto, who are currently lodged at the Sukamiskin detention centre.          He added that Tambunan, who was convicted in a tax corruption and bribery case during his stint as a junior tax officer, had been granted a three-month remission ahead of Independence Day and an additional one-month reduction in his sentence before Id-ul-Fitr.          Meanwhile the sentence of Priyanto, who was sentenced to 20 years in jail for murdering human rights activist Munir, was reduced by five months on the occasion of Independence Day and another one month and 20 days for working as an assistant to an officer at the detention centre.          Some inmates, such those in Paledang Penitentiary of Bogor West Java, not only saw their sentences being commuted, but also had their pockets filled with monetary rewards,. Inmates who were granted sentence reduction were also awarded with a "kedeudeuh" (prize) of Rp100,000 each.          The monetary awards were provided by the Mayor Diani Budiarto.          Bogor Regional Government Spokesman Asep Firdaus said on Monday that the mayor provided Rp100,000 for each of the 452 inmates who were granted sentence cuts on the occasion of the country¿s independence anniversary.          On them, 30 inmates enjoyed General Remission II and walked free.          "Inmates who got General Remission II can use the money to pay for their trip home to reunite with their families," the mayor said.***3*** (T.A014/INE/a014/KR-BSR/A/A014) 21-08-2012 17:24:

GOVT CRITICIZED FOR REDUCING JAIL TERMS OF CORRUPTION CONVICTS

By Andi Abdussalam

Jakarta, Aug 21 (ANTARA) - The government's decision to commute the jail terms of 583 persons convicted on corruption charges and letting 32 others walk free after being pardoned on the country's 67th Independence Day anniversary, has been criticized by the public, including an anti-graft commissioner and a university professor.          Gayur Tambunan, who has been sentenced for 30 years for taking a US$7 million bribe while he was a tax official, has received a four-month sentence cut, which includes a three month reduction on Independence Day and a one-month special remission owing to Id-ul Fitr.          "Such a decision needs to be properly reviewed in the future," Zulkarnaen, the deputy chief of the Corruption Eradication Commission (KPK) said on Sunday.          Legislator Bambang Soesatyo of the House of Representatives (DPR)'s Commission III on Legal Affairs, and Prof. Norsanie Darlan of the University of Palangkaraya (Unpar) of Central Kalimantan also agreed with Zulkarnaen.          The government has been criticized for its policy of reducing jail terms of corruption convicts, as such a grant is not considered comparable with the actual crime committed by the convict.          What has also elicited a strong public reaction against the four-month cutback in Tambunan's sentence is the government taking such a step despite his attempted and briefly successful bid to escape prison.          Every year, the government grants two kinds of remissions to offenders who have served at least one-third of the duration of their total prison sentence. These include the general sentence reduction announced on Independence Day and the special sentence cutback granted on Idul-Fitr.          A convict can also get a six-month reprieve if he or she has spent more than six years in prison.          Reacting to this provision Zulkarnaen, said he hopes that law makers and the government will reconsider these regulations and amend existing laws relating to remissions for convicts.          Prof Darlan described the process as unfair and an exercise in self-defeat. ¿Corruption convicts deserve no remissions,¿ he said, adding that cutting jail terms in this manner will hardly discourage members of the public from indulging in corrupt practices.          He also accused the government of betraying the public¿s trust and faith in justice, adding that he was in favor of reducing jail sentences, but not for persons who have been convicted for corruption.          Expressing concern over the four-month sentence cut given to Tambunan, Soesatyo said that such a remission will have further implications.          "It will eliminate any discouraging effects of legal sanction related to committing crime. Therefore, one should not be surprised if individuals working at the directorate general of tax are motivated to embezzle taxes, because they will do so assuming that they will be punished leniently,¿ the outspoken legislator said.          He also stated his disappointment with the government for not wanting to classify tax embezzlement as an extraordinary crime that deserves the highest legal punishment possible.         "If Tambunan's sentence is remitted, then the Ministry of Law and Human Rights does not deserve its name, and I hope it is not approached by legal mafia for getting similar pardons in the future,¿ Soesatyo stressed.          Meanwhile, Law and Human Rights Minister Amir Syamsuddin was quoted by The Jakarta Globe on Monday saying that the Indonesian government plans to tighten regulations governing sentence cuts for corruption convicts before next year's Idul Fitr festival.         "The rationalization of remissions cannot be implemented yet, but 'inshallah' (God willing) it can be done next year," Syamsuddin stated.          Under current regulations, graft convicts become eligible for sentence cuts if they have served one-third of their sentence. However, the proposed changes will require them to serve at least half of their sentence, before they become eligible for reductions.          The minister also pointed out that granting general remission to inmates has been an annual tradition, regardless of the type of crime they have committed. Sentence cuts for corruption convicts are regulated through government regulation no. 28 / 2006, which is an amended version of government regulation no. 32/1999.          "The government is still in the process of revising government regulation no. 28 /2006. We are trying to harmonize it with other relevant parameters," Syamsuddin said.          This is why general and special remissions were distributed equally amongst all convicts on Independence Day and Idul Fitr this year. Corruption, narcotics and terrorist convicts received the same remissions, he added.          Sihabuddin, the Director General of the Correctional Institute also said that jail term cutbacks given this year were based on government regulation no. 28 /2006.          "We still use government regulation no. 28/2006, as the draft for an amended regulation has been submitted to the president," he said.           A total of 108,376 inmates received sentence reductions on the country¿s 67th Independence Day on August 17 and on the Id-ul Fitr holiday.          As of August 2012, a total of 153,246 persons, which include 50,275 prisoners and 102,971 inmates were locked up in jails and prisons across Indonesia. ***3*** (T.A014/INE/a014) (T.A014/A/KR-BSR/A/A014) 21-08-2012 17:08:

JAKARTA WILL WELCOME NEW MIGRANTS, BUT ONLY THOSE WITH SKILLS

By Andi Abdussalam

Jakarta, Aug 20 (ANTARA) - The population in many cities and urban areas across Indonesia is expected to swell, following the return of around 16 million holiday travelers to their places of work, after celebrating the Idul-Fitr festival with their families in their hometowns.          Jakarta has become one of the most sought after destinations for new migrants looking to move to urban areas. The exodus of tens of thousands of such migrants from rural and small-towns in Indonesia to the capital city every year after the annual Lebaran holiday has become something of a tradition.          However, as a result Jakarta has been facing urbanization problems, with a booming population of about 9.2 million, and an additional 2.7 million workers, who commute to the city on a daily basis for work, from satellite towns such as Bogor, Depok, Tangerang, and Bekasi.          So for all practical purposes, the total population of Jakarta can be pegged at 11.9 million during the day time.

POWER RATES TO INCREASE QUARTERLY IN 2013

By Andi Abdussalam

Jakarta, Aug 18 (ANTARA) - The government will impose a quarterly 4-percent automatic power rate hike beginning January next year in an effort to reduce swelling subsidies in all sectors, which will reach Rp316.1 trillion in 2013.          President Susilo Bambang Yudhono told the Parliament on Thursday that the government was planning to increase subsidies by Rp23 trillion, which will see the state budget rise from Rp268.1 trillion to Rp316.1 trillion in 2013.          The amount of the subsidy just for electricity in 2013 was set at Rp80.9 trillion, which increased from Rp65 trillion in 2012. "The government is proposing to the Parliament its plan to reduce the power subsidy burden through an automatic electricity rate hike every quarter beginning next January 2013," the president said.          However, the president did not mention the percentage of the automatic tariff increase, but he said the total subsidy for the power sector next year was set at Rp80.9 trillion.          Further, Deputy Minister for Energy and Mineral Resources Rudi Rubiandini said earlier that the government was planning to increase the electricity tariff by 10 percent next year, which would be done in stages. "We are determined to raise it," he asserted.          According to President Yudhoyono, many countries had implemented the system of gradual and automatic increases so consumers would not feel too heavy a burden, as compared to an increase carried out during a single year.          Meanwhile, Minister of Energy and Mineral Resources Jero Wacik said that the electricity subsidy has continued to increase and has become a burden on the state budget, so it should be reduced by raising power rates for upper-class consumers.          "The subsidy for electricity has almost reached Rp100 trillion, so we need to hike the electricity tariff to reduce the burden,"  Jero Wacik said during a press conference.          He noted that the electricity subsidy has so far assisted many consumers in the middle and upper classes, while at the same time many poor people in various regions still do not have electricity, so the large subsidy for higher class consumers should be reduced.          "The number of the middle class has increased to more than 56 percent, so the government will reduce its electricity subsidy to them," said Wacik.          Even though the government has determined to increase the power tariff, Jero Wacik remains cautious in responding to matters regarding the people's purchasing power.          "The subsidy must be provided and reach its real target, consumers of the 450 KVA type will be provided the subsidy, but consumers having over 450 KVA should no longer enjoy a large subsidy. There will be no subsidy for consumers having 6,000 KVA and over," the minister said.          Additionally, the government is also making efforts to produce new and renewable energy on a massive scale, using gas, coal, geothermal, solar and bio mass energies. "Yesterday, I signed a decree to increase the investment in geothermal development. We will provide larger funds for the development of geothermal," he said.          In line with the development of other alternative energies, the government will gradually raise electricity tariffs, which are to be carried out in phases.          That's why the electricity tariff would be raised in phases every three months to cut energy subsidies and phase out the electricity subsidy for users with a capacity of 6,000 KVA.          "An increase of 4 percent every quarter would not be too much of a burden," Wacik  said.          He described a 4 percent increase in the electricity tariff as realistic, saying it would be acceptable to the public and the government. Further, implementation of the policy throughout the country would result in a large reduction in the subsidy.          The plan is being discussed at his ministry, where officials will consider the purchasing power of the public before making a decision. Middle to high income citizens who do not deserve a subsidy are the ones who gain most from the electricity subsidy, as they are the largest users of electricity.          "The subsidy policy must not be off target," he said.  Households with electric consumption of 450 watts will continue to be subsidized, but the subsidy would be abolished for those using more than 6,000 watts, he added.          It is unfair that a resident who has a home with a swimming pool that needs a high power supply should be subsidized.          "We have already thought about how to reduce the subsidies," he added. After all, most subsides, including fuels subsidies, were enjoyed by upper class people.          Based on a University of Indonesia survey, 77 percent of the subsidized fuel is consumed by upper-middle-class citizens. Therefore, the government must take steps to reduce the subsidies     Further, Wacik stated that the government must increase fuel prices and electricity rates in order to reduce the burden of subsidies on the 2013 state budget.          "Subsidies can be diverted to other, more important things, such as infrastructure, health, and education," he pointed out.          Meanwhile, head of the Fiscal Policy Agency of the Finance Ministry, Bambang Brodjonegoro, said when raising the electricity tariff officials needs to consider inflation, which might follow as a consequence, and the purchasing power of the public.         "The plan should not trigger a surge in inflation that would place a greater burden on consumers," Bambang said.          Yet, according to Finance Minister Agus Martowardojo, an additional fund of Rp12 trillion could be raised every year for infrastructure projects as a result of the planned increase in the electricity tariff.          "Assuming that the electricity tariff is raised by 3 to 4 percent every quarter starting January 2013, there will be an addition of Rp12 trillion per year," Agus told reporters.          He said the Rp12 trillion funds expected from the increase in the electricity tariff has not yet been included in the capital spending of Rp193.83 trillion set in the draft state budget proposed by the government on Thursday to the parliament.          The plan to cut subsidies on electric energy has yet to be discussed, including with the House of Representatives.          "The government has to set aside a large fund for subsidies at the expense of social and infrastructure spending," he said.***2*** (T.A014/INE/KR-BSR/O001) 18-08-2012 15:

EXPERT RAISES QUESTIONS ON STATE BUDGET DEFICIT

By Andi Abdussalam

Jakarta, Aug 17 (ANTARA) - The government has set a deficit target of 1.6% in its 2013 state budget draft, which is lower than the 2.23 percent deficit in the current state budget, but an expert has expressed concerns over the projection, saying the absorption of external debt used to cover the budget deficit is low.          "Even though the deficit in the 2013 state budget draft has been set at a lower level compared with that of the 2012 revised budget, in which the budget deficit was 2.23 percent of the gross domestic product (GDP), there is no use if the absorption of external debts used to cover it is less than 90 percent," said Enny Sri Hartati, the director of the Institute for Development of Economics and Finance (Indef), on Thursday night.          She noted that the projected budget deficit for 2013, amounting to Rp150.2 trillion, or about 1.6 percent of the GDP, would be covered by external debt the absorption of which was unlikely to be optimum. "So far, the absorption of foreign debt used to cover state budget deficit has always been less than 90 percent. If that is the case, why we should borrow foreign money?" she asked.          Earlier on Thursday, President Susilo Bambang Yudhoyono unveiled the 2013 state budget draft at a plenary session of the House of Representatives (DPR). The budget amounted to Rp1,657.9 trillion, with total revenues expected at Rp1,507.7 trillion and a projected deficit of Rp150.2 trillion.        The deficit is the difference between the total revenues in the 2013 Draft State Budget (up 11 percent from the revenue target in the revised 2012 revised state budget) and state expenditures (7.1 percent higher than the expenditure set in the 2012 budget).          "In the 2013 state budget draft, we set the budget deficit at Rp150.2 trillion, or 1.6 percent of the GDP, which is less than the 2.23 percent figure in the 2012 revised state budget," the President said.          "Of the Rp1,507.7 trillion in revenues, about 80 percent will be derived from tax receipts, which have been set at Rp1,178.9 trillion, an increase by 16 percent from the 2012 revised state budget," he added.          According to the head of state, the funds to cover the budget deficit will come from the issuance of state securities (SBN). "Domestic financing sources are expected to provide Rp169.6 trillion, with foreign sources expected to contribute negative Rp19.5 trillion," the President stated.         "The external sources of funding would mainly be through programme loans and project loans, amounting to Rp45.9 trillion, excluding Rp7 trillion of existing debt principles and debt instalments worth Rp58.4 trillion," Yudhoyono added.          Meanwhile, Chief Economic Minister Hatta Rajasa said the government must achieve its  tax revenue target of Rp1,178.9 trillion in order to reduce the state budget deficit.         "We need to reach our tax and non-tax state revenue targets, as we don't want the deficit to widen," he said after attending the plenary session.          Hatta pointed out that the government had to rely more on tax revenues to reduce dependence on debts so it could cover the budget deficit. If state income fell short of the target, he added, the government would have to use more funds to plug the deficit, which could have a negative impact on the 6.8 percent economic growth target.          "We will then have to do what we don't want to, cutting spending, which would slow down growth," he said, adding that the deficit target of 1.62 percent was healthy for the state budget and for sustainable economic growth.          "In my opinion, a deficit of less than 2 percent is safe," Hatta stated.          Legislator Romahurmuziy, from the United Development Party (PPP), said the state budget draft reflected the government's prudence and optimism.          "The government's optimism is reflected in a conservative but moderate economic growth target of 6.8 percent, while its prudence is reflected in its rational budget deficit target of 1.6 percent," he explained.          Enny also suggested that the government must raise its tax ratio to help cover the state budget deficit.          "The government should boost its share of receipts from the tax sector. It should not be the same as the current budget tax to GDP ratio of 12.5 percent," she said, adding that the ideal ratio should be at least 14 percent.          However, with regard to the deficit target set at 1.6 percent, Enny noted that the absorption of funds used to cover the deficit so far was not optimum, being less than 90 percent. "At the end of the year it is always less than 90 percent," she added.          "The amount of the government's disbursed budget continues to increase every year, while the annual budget accumulates,¿ Enny pointed out.          "If the annual disbursed budget continues to accumulate, what is the use in drawing up a budget with a deficit?" she asked, adding that the government must implement its programmes with comprehensive planning.          Enny stated that the budget should be carried out on schedule, with clear and measurable output and outcome. "If it turns out later that the budget is not enough, then the government can take loans by citing budget deficit. But the budget should not need to be revised within 2-3 months, as has been happening lately. That means it was never planned properly," she said.***2*** (T.A014/INE/a014) (T.A014/A/KR-BSR/A/A014) 17-08-2012 16:51

THOUSANDS OF IDUL FITR REVELERS BENEFIT FROM 'MUDIK GRATIS'

By Andi Abdussalam

Jakarta, Aug 16 (ANTARA) - Around 40,000 Id-ul Fitr tourists are journeying home from Jakarta to various destinations in the country, as part of the 'mudik gratis¿ or `going home for free' programme, which will help reunite the travelers with their families for the seasonal festivities slated for Sunday and Monday.       The 'mudik gratis' programme is run by various companies, government institutions as well as political parties to smooth the Id-ul Fitr exodus, also known as 'mudik lebaran' -- an annual event -- where this year more than 15 million people journey home to celebrate the festival.          For instance, the Transportation Ministry has ferried around 2,000 motorcyclists to their homes on the KRI Banda Aceh warship till date, while political parties such as the Nation's Awakening Party (PKB) and the National Mandate Party (PAN) have moved 7,000 travelers, as part of the programme.          Most of the free 'mudik' packages are being offered by business houses. The largest one has been organized by herbal medicine firm PT Sido Muncul, which has transported at least 22,000 tourists. State-owned bank BNI has spent around Rp4.6 billion to ferry about 2,000 travelers.          Other businesses providing similar free services include state-owned pawnshop PT Pegadaian, which has helped around 1,000 people and port terminal operator PT Koja and postal service PT Pos Indonesia, which have carried 950 and 500 Id-ul Fitr travelers, respectively.          Even though the 'mudik gratis' programme was introduced during Id-ul Fitr many years ago, companies and institutions have only started competing with each other in their offers for free travel in the last two to three years.          Companies offer these programs for their own employees, for the employees of their business partners, retail traders and even political party sympathizers. According to internet news portal VIVA News, the government also appreciates the rising trend of 'free mudik' programs.          "The government appreciates their efforts. I will even award companies and their leaders, who have offered 'free mudik' programmes this year, with certificates of appreciation," Manpower Minister Muhaimin Iskandar told VIVA News on Thursday.          The minister made these remarks after seeing off participants of the free travel programme started by PT Holcim Indonesia, in the parking lot of the Bung Karno Sports Stadium.          Iskandar, who also heads PKB as general chairman, said it was heartening to see the growing incidence of 'free mudik' and 'mudik bareng' or 'free return trip' programmes organized by companies this year.          In 2011, the number of persons using motorcycles during the festival rose, and as a result about 70 percent of traffic accidents were related to motorcycles. However, the police are taking preventive measures to ensure their safety this year.          According to 2011 data from the National Police Traffic Management Center, a total of 2,770 accidents took place during the Id-ul Fitr holiday rush, in which 449 people died, 760 got injured, and 1,914 others sustained minor injuries.          Iskandar said the government will also urge companies, that have not organized free 'mudik or mudik bareng' programmes this year to do so in 2013.          "I recognize the generous spirit of companies in Jakarta that are providing these free trips during Id-ul Fitr, so that thousands of people can reunite with their families in their home towns. This must bring great happiness to them," the minister said.          However, bus operators have complained against the growing trend of companies providing free 'mudik' packages for Id-ul Fitr travelers as it has hurt their ticket sales.          Boy Mondo, the operator of the PO Gumarang Jaya bus firm on the Jakarta-Padang route, said bus companies¿ ticket sales have continued to drop each year, because of the introduction of these free trips.          "The number of passengers in 2012 has declined further than last year. Earlier all tickets were sold out a week before Id-ul Fitr, but this year we haven¿t sold out even five days before Id-ul Fitr day. Today we sent out only five buses with 120 passengers," he said.          While inspecting the readiness of the Pulogadung bus terminal for Idul Fitr travelers in east Jakarta, Jakarta Governor Fauzi Bowo also received a similar complaint from a ticket sales agent.          "Mr Bowo, how can you let this continue? The 'free mudik' programmes have cut into our ticket sales, which have dropped further compared with last year," 36-year old Nunung Sulatri told the governor at the bus terminal.          The governor has promised to evaluate the programme, but said he cannot ban companies or other institutions from offering such a service.          The Organization of Land Transportation Owners (Organda) also reiterated that the 'mudik gratis' plan has harmed the interests of public transportation companies.          "The programme inconveniences regular transportation services, because buses used for free services ply on the same routes as regular buses. The government should not allow them to drive on the same routes," Eka Sari Lorena, the chairperson of Organda said on Thursday.          She added that the use of tourist buses for free trips also violates the rules of Organda, as these buses make the trips without a permit from the organization.          "Bus operators of the popular 'mudik gratis' programme should apply for an additional permit to make these free trips," she said. ***2*** (T.A014/A/KR-BSR/A/A014) 16-08-2012 18:28:3

BUS OPERATORS COMPLAIN OF FREE 'MUDIK' PROGRAM

by Andi Abdussalam

Jakarta, Aug 15 (ANTARA) - The post-fasting Id-ul Fitr holidays are special days that see millions of people traveling to their hometowns, locally known as 'Mudik Lebaran', to celebrate the annual festival with their families.          Transportation operators, however, have complained of the increasing number of public and business institutions that offer free Mudik programs during the current Id-ul Fitr exodus.          For many organizations, this event does not mean a mere ritual, but also an opportunity to display their virtues and win public sympathy for different purposes, including political and business benefits.          Public, political, business and other institutions are, therefore, competing with each other to win the heart of the public by offering travelers a free mudik program so they can go home for family reunions without necessarily paying transportation costs.          No estimate has been released on the anticipated number of Id-ul Fitr travelers this year, but it is expected to at least remain the same as last year, which reached 15 million travelers across the country.  The Lebaran revelers returned home last year traveling on buses, trains, ships, planes, motorbikes and other means.          On such occasions, would-be travelers usually have problems obtaining tickets, and that provided an opportunity to different institutions to offer their free services.          Businesses such as insurance Jasa Raharja, herbal medicine distributor Jamu Sido Muncul, postal service PT Pos, pawnshop firm Pegadaian, and bank BRI are only the smaller companies mentioned among businesses which have offered free mudik programs to their employees.          Institutions with political links that also offered free of charge Mudik Lebaran include the ruling Democratic Party (PD), the National Mandate Party (PAN) and even Jakarta governor candidates Jokowi-Ahok.         Also offering free mudik programs are the nation's largest Muslim organization, Nahdlatul Ulama (NU), and National Defense Force (TNI), which deployed its warships to ferry travelers.         With the help of these institutions, and many others, tens of thousands of Id-ul Fitr revelers could travel for free to participate in family reunions during the Lebaran festival.          The Navy¿s KRI Banda Aceh warship, for example, will ferry at least 1,300 motorists and 2,687 passengers departing from Tanjung Periok port in North Jakarta to Tanjung Emas, Semarang in Central Java on Thursday and Saturday.  It will be seen off by Transportation Minister EE Mangindaan.         However, free mudik programs offered by a number of companies and regional governments have created adverse impacts on bus companies as some claimed ticket sales had dropped. The number of passengers is declining in the face of the Idul Fitr.         "In previous years, seven days before the D-Day (D-7) all tickets had been sold. But now, until D-5 we still have a lot of Lebaran bus tickets left unsold," Boy Mondo,  operator of PO Gumarang Jaya bus firm with a Jakarta-Padang route, said on Tuesday.          The Idul Fitr D-Day will fall on August 19-20 next Sunday and Monday.          Last year, Boy said, his company saw eight buses leaving Jakarta for different destinations carrying 320 passengers every day.          Due to the introduction of the free mudik programs in the past several years, the bus company's ticket sales continued to drop each year, he complained. "The number of passengers in 2012 declined and is lower than last year. Until D-5, tickets for Idul Fitr have yet to be sold out, while in the previous years all tickets were sold by D-7. Today, we only sent out five buses with only 120 passengers," he said.          A number of public bus companies at Kampung Rambutan Bus Terminal also complained that the free mudik program has hurt them. "Our number of passengers drop because many travelers this year turned to the free programs offered by various agencies," said Andre Jonathan, a ticket sales officer of PO Lorena bus company.          Andre said that on D-5 last year would be-passengers had lined-up waiting for buses and tickets had been sold out, though such passenger crowds had not been seen since D-7. But on Tuesday, would-be passengers could still easily get tickets.          Besides, competing with buses offering a free mudik program, bus companies also competed between themselves to offer inter-city bus tickets.  "The price of tickets, on average, increased by 100 percent. The ticket for Surabaya, East Java, for example, which was usually sold at Rp230,000, was sold for Rp470,000 today.  But the prices rose gradually," explained Andre.           In the meantime, Jakarta Governor Fauzi Bowo, who was inspecting the readiness of Pulogadung Bus Terminal for Idul Fitr travelers in East Jakarta on Tuesday, admitted that the profit margin of buses providing Id-ul Fitr tickets dropped this year.          Nunung Sulatri (36) a ticket sales agents for Idul Fitr, complained to the governor of the decline in the number of passengers as travelers turned to free mudik programs offered by different institutions and companies.          She said that on the D-5 there was no drastic increase in ticket sales as there was last year. "Mr Fauzi, how could you respond to this? The free mudik programs have cut a lot our ticket sales. It is not as booming as last year. Many travelers opted for the free mudik programs," Nunung said, complaining to the governor at Pulogadung Terminal.          In response, Fauzi promised he would evaluate the matter.  According to the governor, the declining number of bus company passengers was due to their not being able to compete with the free mudik programs offered by various institutions, including companies which provide such transportation for their employees.          "We will evaluate this problem. But the Jakarta government cannot prohibit them from offering a free mudik program because it is part of the companies' CSR (Corporate Social Responsibility) service that they offer to the public at large. Bus company operators should think of solutions to balance the free mudik programs," the governor said.          Fauzi claimed that the declining use of public buses was not merely because of the 'free of charge' matter, but also because many Jakarta residents now turned to air transportation. This is proven by the increase in the percentage of those flying by airplanes, which reached 23 percent.          "The prosperity of Jakartans is increasingly improving so that they opted to use air transportation services for their mudik program. It could also be because many Jakartans are impatient to cover the distance during a long journey, when their leave is only for several days, so they choose air transportation," the governor said.***2*** (T.A014/INE/a014/KR-BSR/A/A014) 15-08-2012 17:21

RI'S MANUFACTURING INDUSTRY GROWING AT ROBUST PACE

By Andi Abdussalam

Jakarta, Aug 14 (ANTARA) - Even as concerns about Indonesia's trade imbalance mount, given the increase in capital goods and raw material imports, the country's manufacturing industry is currently experiencing momentous growth, which is expected to restore the trade balance through a swell in exports of manufactured goods.          With the current robust growth of its manufacturing industry, Indonesia has become increasingly attractive to foreign investors who expect Asia, including Indonesia, to recover the fastest from the global economic meltdown.           After registering a slow growth rate in the 2005 to 2009 period, the manufacturing industrial sector has rebounded considerably. In 2011, the non-oil and gas processing industrial sector grew by 6.83 percent, which was higher than the national average of 6.46 percent.          "2011¿s growth rate was the highest the sector has seen in the past five years," Industry Minister M.S. Hidayat said on Monday.         The industrial sub-sectors of transportation equipment and machinery have also seen immense growth, he added.         "Transportation equipment and machinery industries rose by 8.98 percent, the food, beverage and tobacco industries were up 7.03 percent and the cement and non-metal quarrying goods industry jumped 6.92 percent," Hidayat added.         However the robust growth has been leveled by the expansion of industries, which import capital goods and raw materials for manufacturing purposes, thereby causing a deficit in the country¿s trade balance.          The monetary, statistics and balance of payment Director of Bank Indonesia (BI) Doddy Zulverdi pointed out that Indonesia's current account deficit for the second quarter of 2012 has reached US $6.9 billion, or about 3.1 percent of its Gross Domestic Product (GDP).         "A 3.1 percent current account deficit is still below the unfavorable psychological level. But even though it hasn't touched that critical level yet, it needs to be monitored as it can negatively impact the real estate and banking sectors," Zulverdis said.          Chief Economic Minister Hatta Rajasa pointed out that imports of capital goods have soared given the rising demand from companies, which include airplane and spare parts firms whose imports have jumped 73.7 percent, motor vehicles and spare part businesses whose imports rose 45.3 percent, imports were up 43.3 percent for iron and steel products companies and increased 25.4 percent for companies that sell mechanical appliances.         "An increase in raw material imports can further hurt the balance in trade, if necessary steps are not taken to control them," Rajasa said, adding that the government also needs to improve domestic consumption and government spending in the investment sector.         Rajasa added that he also sees the trend of high imports as temporary in nature, because the Indonesian economy currently needs these capital goods and raw materials for boosting production in its manufacturing sector.         After all, a rapid growth of the manufacturing industry is bound to attract more foreign investors, he added.         "The manufacturing industry is one of the most favored sectors by foreign investors in line with the expected recovery of international trade. This global recovery will benefit Indonesia if it improves its economic conditions," Suryo Bambang, chairman of the Indonesian Chamber of Commerce and Industry (Kadin) said.         He added that potential market possibilities offered by Indonesia's large population and workforce as raw materials are also among factors that have attracted foreign investors. "Foreign investors want to do business in Vietnam, but because of the country¿s banking constraints, they relocate their investment to Indonesia," Bambang said.         He said that Indonesia's banking system is one of the factors that attract investors. "Other positive aspects include political stability, security and the country's free market mechanisms."    For instance, the Ministry of Industry expects US investment in Indonesia to reach US $5 billion by 2014. ¿The United States' investment in Indonesia has touched US $2 billion after the signing of a cooperation agreement between the Celanese Corporation and state-owned oil and gas firm PT Pertamina,¿ Industry Minister M.S. Hidayat said.        The government is also trying to boost its textile industry and for that purpose the Indonesian Ministry of Trade has tied up with the South Korea International Cooperation Agency.        "We need a total budget of US $1.6 million to implement this technical cooperation plan," Sungho Choi, the resident representative of the South Korea International Cooperation Agency said during the signing of the cooperation agreement at Hidayat's office in Jakarta earlier this month.         Noting the rapid growth of the industrial sector in Indonesia, domestic investors who are part of the Indonesian Businessmen Association (Apindo), said they are convinced that the government will be able to achieve its growth target of 7.1 percent for 2012.         "Industrial growth can touch 7.1 percent if the government remains focused on industrial development in the downstream areas, such as distribution, marketing, etc. The national industrial growth will also attract more investors," Apindo chairman Erwin Aksa said.         He however, pointed out that investors still face constraints during industrial development, which include high bank lending rates and shortage of infrastructure.         "Bank interest rates in Indonesia are relatively higher than those in other ASEAN countries. In addition, poor port facilities and the lack of other infrastructure still hamper industrial growth in Indonesia," Aksa said.         Aksa added that the current law governing land procurement, which is still being deliberated upon by the House of Representatives (DPR), and gas supplies are also a problem. "If the gas supplies are not normalized by the government, it will discourage investors," he said.          Despite these constraints, Hidayat said he is optimistic about the government achieving the 7.1 percent growth rate target for 2012.         He added that he also expects the Indonesian economy to realize its full potential and maintain industrial growth following an improvement in the economic prospects of United States and Japan in 2012.         Indonesian growth will also be fueled by the huge domestic market, which is made up of its 134 million-strong middle class population, Hidayat said. ***2*** (T.A014/INE/KR-BSR/F001) 14-08-2012 15:34:5

FORMER KPK CHIEF'S TESTIMONY COULD PROVE TO BE EMPTY BLOW

by Andi Abdussalam

Jakarta, Aug 13 (ANTARA) - The allegations made by Antasari Azhar, the former head of the Corruption Eradication Commission (KPK), about the state palace's role in the controversial Rp6.7 trillion bailout for Bank Century, will only serve as dummy ammunition if he does not provide concrete evidence to back up his claims.         "This testimony is not enough if he doesn't have concrete evidence such as a recording of the discussion that took place during that meeting. He has to have concrete evidence," Burhanuddin Muhtadi, a political observer at the Indonesian Survey Institute (LSI) said.          The former chief of the anti-graft agency, who is currently serving a jail term for murder, had said earlier that as KPK chief he was invited by President Susilo Bambang Yudhoyono to the state palace to discuss the controversial bailout, which was allegedly aimed at setting aside state funds for financing political campaigns before the 2009 elections.          However, Muhtadi reiterated that Azhar's testimony, which was recently broadcast by a private television station, will not have a huge impact because his testimony is verbal and lacking any tangible evidence.          "The public is of course looking forward to hearing more from Azhar, but if he makes a similar statement again without evidence, it will be the equivalent of an empty blow," he said.          The initial claims made by the former chief of KPK were trumpeted by outspoken lawmaker Bambang Soesatyo Bambang, who said that Azhar would unveil 'new facts' about Bank Century's bailout scandal. At the time, Azhar not only confirmed the palace's involvement in the rescuing the ailing bank, but also spoke about attempts to keep the facts of the case hidden from the general public.          "With these new facts revealed by Antasari Azhar, the palace's claim that it was unaware of the bank bailout taking place has been proved false," Bambang, who is also a member of the supervising team investigating the circumstances of the Bank Century bailout, said.          He added that Azhar's testimony has also confirmed that it was President Susilo Bambang Yudhoyono who sought to cover up the facts of the case.          However, the ruling Democratic Party (PD) sees Azhar's testimony and Bambang's response as an attempt to renew interest in the controversial Bank Century bailout scandal.          Syarief Hasan, a member of the Democratic Party's advisory board, termed the effort to reopen a discussion on the specifics of the Bank Century bailout case as a wasteful exercise.          The case is already being pursued via legal channels by the anti-graft agency, Hasan said.          He added that several members of the Golkar Party have tried to refocus the spotlight on the case, in order to embarrass President Yudhoyono, but the political maneuver is unlikely to affect his image.          "This attempt by Golkar Party cadres, which include Bambang Soesatyo is a waste of energy," Hasan said. The Indonesian people are also tired of hearing this baseless allegation, he added.          The case dates back to late 2008 when a financially crunched Bank Century started facing liquidity and default problems. It collapsed after liquidity assets worth Rp11.6 trillion were withdrawn, through its security firm Antaboga Delta Sekuritas, and allegedly stashed abroad by its owner Robert Tantular.          The ailing bank was then taken over by the Deposit Insurance Agency (LPS). It was later bailed out by the government with an alleged Rp6.7 trillion issued through a short-term funding facility (FPJP) and temporary capital participation (PMS).          This amount was much higher than the Rp1.3 trillion discussed with the House of Representatives (DPR), sparking public criticism and questions about the disbursement of public funds without the DPR's approval.          In its 2009 audit report, the State Audit Board (BPK) said it suspected that efforts had been made to engineer additional bailout funds (PMS) for the bank.          While handing over his October 2009 report to the DPR, BPK chairman Hadi Poernomo said that he too has encountered gross violations in the way the Bank Century bailout was handled. The violations particularly related to the bank's merger process and its supervision by the country's central bank -- Bank Indonesia (BI).          He said these violations also include naming Bank Century as a failed bank that would negatively impact the country's banking system, the use of FPJP funds and interim capital or bailout funds, as well as overlooking the bank management's flawed business practices.          The investigative audit report also hints at the suspicious efforts made to raise the original bailout amount, which was initially estimated at between Rp632 billion and Rp1.3 trillion, but was later raised to Rp6.7 trillion without consulting the DPR.          "The Rp6.7 trillion bailout funds were disbursed in four stages. The disbursement of the second phase worth Rp2.2 trillion was done without consulting the Coordination Committee (KK), which is against the LPS regulation No. 3/PLPS/2008," Poernomo said after handing over the audit report to House Speaker Marzuki Alie.          After all, the Rp5.86 trillion loss suffered by Bank Century was a result of the bank's unethical business practices and violations committed by the bank's executives and other parties, he added.          A House Inquiry Committee confirmed later that violations had been committed during the issuance of the FPJP and PMS amounting to the Rp6.7 trillion.          The House of Representatives (DPR), in a plenary meeting in April 2010, transferred the case to the government for its investigation while the House formed a team to monitor the progress of the investigation.          Yet, no decision has been made so far with regard to the investigation by the government.          Bambang also quoted from Azhar's testimony, which alleges that in addition to the former KPK chief, a number of cabinet ministers and other high ranking state officials were present at the meeting in the state palace, which was called to discuss the scandal.         Andi Arief, a member of the President's special staff denied on Friday the statement made by Azhar on a private television channel. He categorically denied that President Yudhoyono had chaired a meeting to discuss the disbursement of Rp6.7 trillion for a bailout in October 2008.         Arief said that the president invited the KPK, police chief and the attorney general for a meeting on October 9, 2008 to discuss legal enforcement measures needed to safeguard the economy, particularly against economic players who had been violating capital market regulations.          Meanwhile, President Yudhoyono said Friday that the bailout of Bank Century in 2008, which is now known as Bank Mutiara, was carried out at a political cost in order to save the country's economy.          "If the government had not moved to quickly salvage the unhealthy bank in 2008, the economic crisis from 10 years ago might have hit Indonesia again," Yudhoyono said.          Nonetheless, the government has paid a high political cost for disbursing Rp6.7 trillion or US $730.08 million to bail out the troubled bank.          "The bailout has proved to be so expensive that the government has had to deal with the problem for the last one year," the president said.           However the president said the decision to bail out the bank was taken when he was abroad. It was the Financial System Stability Committee (KSSK) chief (then finance minister Sri Mulyani), who had the authority to decide the policy.       Presidential Spokesman Julian Aldrian Pasha the policy to bail out the bank was taken by the central bank (Bank Indonesia) and the KSSK.          Muhtadi pointed out that Azhar's recent testimony can also be used by other political parties to bargain with the President Yudhoyono, adding that House members have always used Bank Century for political gain against the government.          He added that the information revealed by Azhar¿s testimony can also be followed up by the KPK.          "The KPK has the moral responsibility to investigate the testimony and seek further explanations from Azhar, including the names of other people involved," Muhtadi said. ***1*** (T.A014/INE/KR-BSR/A/A014) 13-08-2012 20:0