BUSINESSES WORRY ABOUT POWER RATE HIKES

By Andi Abdussalam

Jakarta, Dec 29 (ANTARA) - Businessmen and industrialists have expressed concern about the government's plan to increase the electricity tariff by about 15 percent in 2013, saying it would hamper business development and slow the nation's economic and industrial growth.       Coupled with the planned increase in the minimum wage, the power rate increase will raise businesses production costs to about 43 percent.  This will drive up the prices of locally produced goods and reduce their competitiveness, prompting the country to be flooded with imported commodities, businessmen warned.       Further, the power tariff hikes would prevent the government from reaching its economic target of 6.8 percent growth in 2013. With high production costs, industry would also face difficulties in achieving its growth target of 7.1 percent next year.         "At present, we are pessimistic about Indonesia's economic growth. I think it would be good if the country's economy could grow by six percent," Sofyan Wanandi, the chairman of the Indonesian Businessmen Association (Apindo), said here over the weekend.

STATE LOGISTICS AGENCY SEES LARGEST EVER RICE STOCKS IN 2012

By Andi Abdussalam

Jakarta, Dec 29 (ANTARA) - The state logistics board Bulog has said that the levels of stored rice stocks in 2012 were the largest ever, as stocks were reported at 2.3 million tons at the end of 2012, exceeding the target of 2 million tons.  The agency also saw a decline in its rice imports in 2012 by about 157.14 percent from 2011, which were 1.8 million tons, predicting that as of next year the country would no longer need to import rice.          "It is not likely that we will import rice because the ministry of agriculture has set itself the target of raising production by about 6 percent to 72-74 million tons," Bulog President Director Sutarto Alimoeso said last week.          Sutarto explained that national rice stocks at the end of the year reached 2.3 million tons, while rice procurement at home reached 3.7 million tons.  "Rice stocks and rice procurement at home are in the best condition ever, as of the end of December. This is the best condition in Bulog's history," he said after attending a seminar on Indonesian economic prospects for 2013.

NEW FINANCIAL SERVICE AUTHORITY TO OPERATE NEXT MONTH

By Andi Abdussalam

Jakarta, Dec 28 (ANTARA)  - The newly established Financial Service Authority (OJK), which will take over the task of the Capital Market and Financial Institutions Supervisory Agency (Bapepam-LK) will begin operations in January 2013.          Established based on Law No. 21/2011, the OJK --whose board of commissioners was installed last July-- will become an independent body and report to the House of Representatives. It will oversee banks, capital markets and non-banking financial institutions.          "Human resources, organization structure and governing rules have all been prepared. We hope the launch of the OJK operation early next year would be smooth," Muliaman D Hadad, the OJK chief commissioner, said on Tuesday.          In carrying out its duties, the board of commissioners of the OJK will be assisted by 13 deputies. Each commissioner will be assisted by several deputies and a working unit. The OJK has appointed 1,018 employees of whom 82 from Bank Indonesia (BI/the central banks) and 936 from the ministry of finance.

SECURITY GUARANTEED DURING CHRISTMAS CELEBRATIONS

By Andi Abdussalam

Jakarta, Dec 25 (ANTARA) - The Indonesian National Police have guaranteed the security of the Christian community during Christmas celebrations at some 135,000 churches across the country on Monday night and Tuesday.          Protestant Christians and Catholic Christians, who respectively account for 9.2 percent and 3.5 percent of the country's 240 million population, were able to celebrate this year's Christmas Eve peacefully.         "There has been no security disturbance until now, and Christmas is being celebrated peacefully," said Brig Gen Boy Rafli Amar, the head of the public relations bureau at the Indonesian Police Headquarters, here on Tuesday.          "The Christmas Eve celebrations also went by peacefully on Monday night," he added.          The National police deployed a total of 82,633 security personnel this year to step up security during the Christmas and New Year celebrations.

GOVT OFFICIALS UPBEAT OVER FOREIGN INVESTMENT

By Andi Abdussalam

Jakarta, Dec 22 (ANTARA) - Observers and government officials have predicted that foreign investment in Indonesia will continue in 2013, although certain business circles voiced their pessimism, citing legal uncertainties and labor unrest.          According to the finance ministry, foreign investment in Indonesia during the January-September 2012 period increased 27 percent to Rp229.9 trillion, compared with the same period in 2011.          Such strong foreign investment reflected the country's encouraging domestic economic performance, the head of the finance ministry's state budget sub-directorate, Agung Widiadi, said recently.          Responding to data from the finance ministry, Capital market observer Pardomuan Sihombing predicted that the inflows of foreign investments to Indonesia in 2013 would continue to increase, as returns of investments in developing countries would be larger than in advanced nations.

BUSINESSES WORRY ABOUT LEGAL UNCERTAINTIES, LABOR RALLIES

By Andi Abdussalam

Jakarta, Dec 22 (ANTARA) - Amid optimism among government officials about future foreign investments, the Indonesian business community has expressed  concern about legal uncertainties and labor rallies, which they say could discourage increased foreign investments.          Bank Indonesia officials (BI/the Indonesian central bank) have said foreign investment in the run-up to the end of 2012 is increasing.          Further, Bank Indonesia predicted that net foreign investments during the fourth quarter of this year would reach US$7 billion, though foreign investment in the first three quarters had totaled only US$14 billion.          "This shows that the net inflows of foreign investment are increasing at the end of the year. So, the total net investment inflows up to the end of 2012 are expected to reach US$21 billion, both in direct investment and portfolio investments," Hendar, the executive director for monetary management affairs of Bank Indonesia, said on Thursday.

REMOVAL OF FUEL SUBSIDY NEEDS CAREFUL CONSIDERATION

By Andi Abdussalam

Jakarta, Dec 21 (ANTARA) - Coordinating Minister for Economic Affairs Hatta Rajasa has stated that the removal of fuel oil subsidy needs careful consideration, particularly for the sake of the nation's poor, who would have to be provided with a substitute for the fuel.          The idea to remove fuel oil subsidy, which has been a burden on the state budget, first came from the Indonesian Chamber of Commerce and Industry (Kadin) and the Jakarta deputy governor.          The Kadin has advised the government to phase out subsidies for fuel oils so the state funds could be used for development of infrastructure in various provinces across the country.          "Kadin has asked the government to remove fuel oil subsidy because it is being enjoyed not only by the poor people but also by the rich," Kadin chairman Suryo Bambang said last week.

OIL, GAS MANAGEMENT NEEDS DEFINITE REGULATOR

By Andi Abdussalam

Jakarta, Dec 21 (ANTARA) - Observers have suggested that the government should appoint a definite state institution to handle the country's oil and gas business after the Constitutional Court (MK) dissolved last month the Upstream Oil and Gas Regulator (BP Migas).          In the wake of the dissolution of the BP Migas on November 12, the government set up the Interim Working Unit for the Implementation of Upstream Oil and Gas Activities (SKSP Migas), under the Ministry of Energy and Mineral Resources, which took over the functions of BP Migas.          However, SKSP Migas is an interim body and must be replaced by a state-owned entity that should exclusively handle upstream oil and gas activities. The role of BP Migas is expected to be taken over by state-owned oil and gas company Pertamina.          "The dismantled BP Migas, whose role is being taken over by the SKSP Migas, should be replaced by Pertamina, as per the rules of the Constitution," said Marwan Batubara, the executive director of Indonesian Resources Studies, on Thursday.

AUTHORITIES URGED TO STOP PORK "BAKSO" UPROAR

By Andi Abdussalam
Jakarta, Dec 20 (ANTARA) - Indonesia's second-largest Muslim organization, Muhammadiyah, has urged the government and related parties to stop the circulation of pork-tainted "bakso" (meatball) soup before the issue creates a serious uproar and has a wider impact.          "We are concerned about the circulation of pork-contaminated bakso. The government and other concerned parties need to take immediate steps to prevent an escalation of the situation and to neutralize its negative impact on the public," Din Syamsuddin, chairman of Muhammadiyah, said here on Wednesday.          He pointed out that if the issue is not resolved immediately, it will create widespread public unrest. The people will not consume bakso, and it will harm the interests of thousands of small traders who earn a living on the popular side dish.          Made of beef mixed with tapioca flour, bakso is a popular side dish in Indonesia, which is predominantly populated by Muslims. However, Muslims are not permitted to consume pork, according to Islamic law.

PRESIDENT YUDHOYONO CONCLUDES MALAYSIAN VISIT

By Andi Abdussalam

Jakarta, Dec 19 (ANTARA) - President Susilo Bambang Yudhoyono on Wednesday concluded his two-day visit to Malaysia after attending the 9th annual consultation meeting with Malaysian Prime Minister Najib Razak.        The President arrived in Kuala Lumpur on Tuesday and left for New Delhi at 1.45 pm local time on on Wednesday for a working visit to India.     During his stay in Malaysia, President Yudhoyono discussed bilateral cooperation and regional issues of mutual concern.     The President and Najib discussed expanding bilateral cooperation in various areas, including human resources, as well as the concerns of Indonesian workers in Malaysia.          At a joint press conference with Najib on Tuesday night in Puterajaya, President Yudhoyono said there was 'plenty of scope to expand bilateral economic cooperation, given the positive economic growth in both countries'.

GREEN CAR INDUSTRY AWAITING GOVERNMENT POLICY

By Andi Abdussalam

Jakarta, Dec 18 (ANTARA) - With two weeks remaining before the year ends, the government is racing against time to issue a policy on the production of low-cost green cars (LCGC) in the country.          The government announced last September that it would issue this year a regulation on low-cost green cars, which are expected to be sold at a price of not more than US$10,000 (Rp100 million) per unit.          LCGC cars will be produced in an effort to reduce fuel-oil subsidies provided for conventional vehicles, which burden the state budget.          "We are now waiting for the President to issue a presidential decree. We expect that it will soon be issued in the coming few days," Industry Minister MS Hidayat said at the time of the announcement.          However, the industry minister said on Monday that the government regulation had not yet been issued, even though automotive industries were waiting for it. The regulation is expected to be issued within the remaining two weeks before the end of this year.

RI TO WITNESS SLOW EXPORT PERFORMANCE IN 2013

By Andi Abdussalam

Jakarta, Dec 17 (ANTARA) - Indonesian exporters have predicted that the country's export performance will slow down next year as demands for Indonesian commodities from main destination countries such as the United States and Europe are expected to go down.          Exporters predict that the global economic conditions, particularly in the United States and in European countries will remain unstable causing world demand for commodities to drop and discourage industry at home.         "The performance of the industrial sector such as textile and textile product industry will decline and demand for these commodities from the United States and Europe will remain small. Demand for all commodities are expected to drop, except for mining products," Benny Soetrisono, chairman of the Indonesian Exporters Association (GPEI), said last week.

RI CONVINCED IT WILL REACH TOURISM TARGET OF 8 MILLION

By Andi Abdussalam

Jakarta, Dec 15 (ANTARA) - Being confident that it will reach its target of 8 million foreign tourists by the end of 2012,  the Indonesian government is poised to raise its 2013 tourism target to 9 million and to 10 million by 2014.          According to officials, 6.5 million foreign tourists visited Indonesia during the first ten months of 2012, a 5 percent increase compared with arrivals in the same period in 2011, which stood at 6.2 million.         Optimism in the tourism sector is based on the number of foreign tourist arrivals in the January to October 2012 period, which reached 6.5 million. Though arrivals in November and December have yet to be calculated, December is usually a time when tourist arrivals peak.          "We have set a target of 8 million foreign tourist arrivals in Indonesia by the end of this year," the Tourism and Creative Economy Ministry's inspector general, I Gusti Putu, said.

ECONOMY PREDICTED TO GROW BELOW TARGETS

By Andi Abdussalam
Jakarta, Dec 15 (ANTARA) - Ministers and observers have predicted that the country's economic growth this year, as well as next year, would fall short of the government targets of 6.5 and 6.8 percent, respectively.         Finance Minister Agus Martowardojo has said that the country's economic growth would only reach about 6.3 percent this year, which is lower than the target set by the government for 6.5 percent in the 2012 state budget.          For next year, Coordinating Minister for Economic Affairs Hatta Rajasa has also predicted that the Indonesian economy will grow, but remain below the target of 6.8 percent set in the 2013 state budget due to the weak global economy.

CPO PRICE FALL THIS YEAR PREDICTED TO CONTINUE IN 2013

By Andi Abdussalam

Jakarta, Dec 14 (ANTARA) - This year, the Indonesian crude palm oil (CPO) industry has witnessed a decline in its commodity prices. The CPO industry had recorded a good performance in 2011 when palm oil production increased by 7.3 percent, reaching 23.5 million tonnes. The export value of palm oil increased by 5.7 percent and reached 16.5 million tonnes.          The price of palm oil had also increased by 24 percent, and it had reached US$1.125 (CIF Rotterdam) per tonne in 2011. However, this year, the price fell to US$900 per tonne," said Indonesia's Palm Oil Council Chairman (DMSI), Derom Bangun. Even, he said, it is predicted to decline further to US$850 per tonne because of the ongoing global crisis.      Although the production of palm oil has increased to 25.5 million tonnes this year, the world's CPO price in 2012 fell to about US$900 per tonne, lower than what experts had predicted (US$1,100 per tonne).

CAR INDUSTRY MAY FACE SLOWDOWN NEXT YEAR

By Andi Abdussalam

Jakarta, Dec 12 (ANTARA) - Experts have predicted that the automotive industry will see slower growth next year due to rising wages, falling commodity prices, an increase in the minimum down-payment requirement for motor vehicles, and a protracted global economic crisis.          According to industry players, the Indonesian automotive market will grow at less than 10 percent in 2013.         "I think the market will grow but not at the current rate. It will very likely be below 10 percent per annum," said Rizwan Alamsjah, the executive marketing director of PT Krama Yudha Tiga Berlian Motor, Mitsubishi¿s sole agent in Indonesia, in Bali on Monday.          He noted that Indonesia might be able to maintain its economic growth rate next year, but it would face many challenges, such as weakening commodity markets, both at home and abroad.       Rizwan's opinion was shared by Prijono Sugiarto, the president director of PT Astra International. "Commodity prices are expected to drop while the global economic condition is unlikely to improve. Additionally, labour wages will increase, but the global market condition is deteriorating," he said while speaking at a workshop on automotive industry in Bandung, West Java, recently.

SILENT OPERATION NEEDED TO FIGHT GRAFT IN STATE FIRMS

By Andi Abdussalam

Jakarta, Dec 11 (ANTARA) - Although Indonesia has recorded a slight improvement in its fight against corruption, as indicated in the Corruption Perception Index (CPI), yet the problem remains rampant across the country and needs serious attention.   Last year, Indonesia scored 3.0 in the Transparency International's CPI, up 0.2 points from its CPI score of 2.8 in 2010. In 2011, Indonesia ranked 100 out of 183 countries in the world. However, it ranked 110 out of 178 countries in 2010, and 111th out of 180 countries in 2009.          Despite the improvement, Indonesia faces a serious problem that must be fought off. President Susilo Bambang Yudhoyono himself admitted that corruption continued to undermine the country.  "Corruption is rampant in this country. It is a serious problem, and it hinders the country's development," he said during the commemoration of the International Anti-Corruption Day at his state palace on Monday.

IN SEARCH OF INDONESIA'S PRESIDENTIAL CANDIDATES

By Andi Abdussalam
Jakarta, Dec 10 (ANTARA) - Indonesia will hold its presidential elections in 2014, but until now, the country is unaware of the public's favorite candidate.          However, it does not mean that Indonesia lacks qualified leaders that are fit to be a president. There are many young and talented people who have not come into the public's view. Indonesia has a number of potential leaders who could be nominated in the 2014 presidential race.          "It is not that we do not have qualified leaders. In fact, we have a number of potential leaders who have not come into the public's view yet," said Kuskridho Ambardi, executive director of the Indonesian Survey Institute (LSI).      Potential leaders will emerge once they have the right capabilities and qualifications. "Their ability to solve a specific national problem should be discussed at a later stage. What's important is that they have the capability, integrity and the necessary qualifications," Kuskridho said.

RI EXPECTED TO RAISE BEEF IMPORT QUOTAS

By Andi Abdussalam

Jakarta, Dec 8 (ANTARA) - As national meat stocks continue to fall short, the government has called on importers to import meat based on their respective quotas, hoping that next year's quota of 80,000 tons would be increased to 100,000 tonnes.          Coordinating Minister For Economic Affairs Hatta Rajasa made the appeal after he learned that the shortage of stocks was caused by importers not yet importing enough meat, based on their given quotas.          "We have calculated the need for national stocks and ordered meat based upon beef import allocations, but shortages still exist because importers have not yet imported meat based upon their quotas. So, we call on them to carry out the imports immediately," said Hatta at the Presidential Palace in Bogor, West Java, last week.          He warned importers who had obtained licenses for the importation of beef to carry out their obligations immediately, saying importers should take his appeal seriously.

GOVT UNLIKELY TO RAISE FUEL OIL PRICES NEXT YEAR

By Andi Abdussalam
Jakarta, Dec 8 (ANTARA) - Even though subsidized fuel oils are often labeled as off-target, as more fuel is used not by the rightful consumers, yet the government seems unwilling to raise fuel prices next year due to the high economic and political risks.          Last April, the government canceled its plan to raise fuel oil prices following rallies across the country opposing the plan. Demonstrators claimed the policy would cause commodity prices to increase and burden the public.         "The government will not have the guts to increase the prices of subsidized fuel in 2013, particularly because the general elections are coming up in 2014," said Enny Sri Hartati, an economist from the Institute for Development of Economics and Finance (Indef), on Friday.

INDONESIA'S FOREST GOVERNANCE NEEDS REFORM

By Andi Abdussalam

Jakarta, Dec 7 (ANTARA) - The management of Indonesia's remaining 120 million hectares of forests needs reform, owing to the fact that there are various problems relating to the conservation and exploitation of forests. Indonesia needs to introduce a new forest governance program in order to reduce deforestation, protect the border areas of forests, settle forest conflicts, and increase the local people's participation in forest conservation efforts. "For this purpose, the cooperation of all relevant parties is key to the successful reform of forest governance," said Wicaksono Sarosa, the executive director of Kemitraan, a Partnership for Governance Reform in Indonesia, on Thursday.

RI HAS GEOTHERMAL, URANIUM AS FUTURE ENERGY SOURCES

By Andi Abdussalam

Jakarta, Dec 5 (ANTARA) - Indonesia suffers from an annual deficit of 300 million barrels of oil and natural gas, as it needs 350 million barrels but produces only 50 million.          Experts, however, say Indonesia is rich in geothermal power and uranium, both of which can serve as alternative sources of energy.          "Since the year 2000, less than 50 million barrels of oil and natural gas has been produced annually. This runs short of the national demand of 350 million barrels. Therefore, we run short of 300 million barrels every year," said Rovicky Dwi Putrohari, the chairman of the Indonesian Geologists Association, in Makassar, South Sulawesi, on Tuesday.          As Indonesia's oil reserves are declining, experts suggest that the country begin exploiting its other sources of energy, such as geothermal and uranium, apart from coal, hydropower, wind, biomass, solar energy, and others.          After all, Indonesia has vast reserves of geothermal energy, accounting for 40 percent of the world's geothermal energy reserves.

INDONESIA'S IMPORTS ARE ON THE RISE

By Andi Abdussalam

Jakarta, Dec 5, (ANTARA) -Indonesia's imports have been on the rise, leaving a deficit in the country's trade balance. Yet, officials say that this phenomenon will benefit the real sector.          The value of Indonesia's imports from January 2012 to October 2012 reached US$159.18 billion, a 9.35 percent increase as compared to the corresponding period in 2011, when the value of imports stood at US$145.57 billion.          The country's imports increased in October 2012 and reached US$17.21 billion. This is a 12.6 percent increase as compared to in September 2012, when the value of imports stood at US$15.35 billion.          "The increased imports are a result of the high imports of auxiliary raw materials and capital goods such as airplanes, gas, iron and steel," said Bachrul Chairi, head of the Policy Assessment and Development Affairs of the Trade Ministry, on Tuesday.

NON OIL, GAS COMMODITY EXPORTS DECLINING

By Andi Abdussalam

Jakarta, Dec 4 (ANRTARA) - The Central Bureau of Statistics (BPS) in its latest report said the value of Indonesia's exports last October was US$15.67 billion, down by 1.45 percent compared with the previous month of September, which was US$15.9 billion.          "The decline was mainly due to the drop in non-oil and gas export values from US$13.12 billion to US$12.68 billion," Sasmita Hadi Wibowo, BPS deputy for social affairs and service distribution, said on Monday.          According to Sasmita, non-oil and gas exports in October 2012 declined by 3.42 percent compared with September 2012 and by 8.75 percent compared with October 2011. Commodities that saw a drop in exports include fat and vegetable/animal oils, which declined by US$519.2 million; machinery/electrical appliances, which declined by US$73.3 million; mechanical appliances, which declined by US$23.1 million; and papers/cartoons, which declined by US$7.8 million.

LOCAL FLOUR PRODUCERS SEEK PROTECTION AGAINST IMPORTS

By Andi Abdussalam

Jakarta, Dec 4 (ANTARA) - Indonesian flour producers are seeking protection from the government (in the form of a temporary safeguard duty) because Turkish flour exporters are carrying out dumping practices. Fearing that their businesses could face bankruptcy unless protection is taken, domestic flour producers have taken the issue of dumping practices to the government. According to the local flour producers, Turkish flour exporters have been selling flour at a lower price in Indonesia, as compared to the price of the commodity in its country of origin.          According to Ratna Sari Loppies, executive director of the Indonesian Flour Mills Association (Aptindo), the domestic flour price in Turkey is US$470 per metric tonne. However, the selling price in Indonesia is set at US$340-US$370 per metric tonne. This data has been provided by the US Department of Agriculture.

INDONESIAN FISHERIES NEED MORE INVESTMENT

By Andi Abdussalam

Jakarta, Dec 4 (ANTARA) - Indonesia's maritime and fishery potentials are not yet fully exploited as investors so far are still lacking attention to these sectors which actually offer profitable resources. The Ministry of Maritime and Fisheries Affairs (KKP) has set an investment target of Rp23.67 trillion in the maritime and fishery sectors this year, yet this amount is viewed as very small if compared with the richness of fisheries resources.          If investment in other sectors is taken into account, the Rp23.67 trillion is relatively small, accounting for only 0.4 percent of the total investment made in the primary sectors.          The same is true to foreign investment whose value in the maritime and fisheries sectors accounts for only 0.3 percent of the total foreign investment or about 1.2 percent of the total foreign investment made in the primary sectors.

WORKERS REJECT 15 PCT WAGE INCREASE PROPOSAL

By Andi Abdussalam

Jakarta, Dec 1 (ANTARA) - Industry Minister MS Hidayat's idea to raise regional minimum wages by 15 percent for labor-intensive and small industries was rejected by a workers association on Saturday.          The minister proposed the idea to raise regional minimum wages by 15 percent following the outcries of business officials, particularly small businesses, over the newly raised Jakarta minimum wage, setting the minimum wage at Rp2.2 million by Jakarta Governor Joko Widodo.          Chairman of the Indonesian Labor Workers Association (MPBI), Said Iqbal, said his organization was opposed to the minister's proposal for a 15 percent wage increase, as well as the opportunity for industries to file a request for a postponement of the new Jakarta minimum wage hike for next year.