POLICE QUESTION ARIEL, LUNA OVER SEX VIDEO SCANDAL

By Andi Abdussalam

Jakarta, June 11 (ANTARA) - Popular Peterpan vocalist Nazril Irham alias Ariel and noted presenter and artist Luna Maya finally came to the Police Headquarters on Friday for questioning amid the uproar of the circulation of sex videos on  the internet featuring an actor (looking like Ariel) having sex with two actresses, one resembling Maya and the other one Cut Tari.          Ariel and Maya arrived at 3 pm in an 'Alphard' car at the backside of the building of the Criminal Investigation Department (Bareskrim) of the National Police Headquarters.          However, journalists failed to cover Luna Maya and Ariel who were questioned as witnesses at the police headquarters that evening. Luna and Ariel left through the side door of the police office after questioning deceiving journalists who had been waiting for them since morning.          There was no information on whether the actors in the videos were them or not. Since the beginning, Luna and Ariel who arrived at the police station by car had refused to meet journalists.          The National Police's chief detective, Commissioner General Ito Sumardi, said the police had asked Luna and Ariel about the process of the filming and why the video could spread. Again Ito did not explain who shot and the object of the film.          A steamy sex video believed to involve Ariel and Luna was the first to surface, on June 4, followed a few days later by a video believed to feature Ariel and Cut Tari. There were three sex videos showing persons resembling Ariel and artist Luna Maya having sex with a duration of about two minutes and six minutes, and then with another one looking like Cut Tari with   a duration of about eight minutes.          Deputy Head of Police Headquarters' Public Relations Division, Zainuri Lubis said the persons appearing in the sex videos currently circulating among the public could  face multiple criminal charges.          "The actors in the videos  can  be charged based on  penal clauses in three different laws," Zanuri said at the National Police Headquarters on Friday. He said  the relevant penal clauses were  contained in  Law No. 11 / 2008 on Pornography carrying a penalty of  12 years in jail, Article 27 paragraph 1 of the Law on Information and Electronic Transactions requiring a penalty of up to six years in jail and a fine of Rp1 billion, and Article 282 on immorality in  the Criminal Code.          Zainuri said the actors in the sex videos could be charged based on  those articles because they were aware  their immoral acts were being recorded and because of their negligence in keeping the videos from the public.          "It is quite possible, the videos have circulated widely among the public because of their negligence," the National Police spokesman said. He said that adults should not have committed the acts because they were clearly of immoral nature.          In the meantime, senior lawyer OC Kaligis said artist Luna Maya and singer Ariel were victims in the case of pornographic video purportedly involving the two spread in the community so far.          "We refer the case fully to the police as they are just victims," he said after accompanying Luna and Ariel in the questioning over the case by the police at the National Police Headquarters.          Kaligis said he had received legal authority from Luna Maya and Ariel to accompany them in dealing with the case that had drawn wide attention from the public. The senior lawyer declined to explain if the two were indeed the ones exposed in the video nor whether the hard disc that kept the footage that belonged to Ariel had been lost.          Besides questioning Ariel, police are also investigating the person who first posted the porn video in the internet.          According to Information and Communications Ministry spokesman Gatot S. Dewa Broto, his ministry and the police have already identified the person responsible for  the sex videos' publication. The person was identified  at 3 pm on Thursday.          Gatot said from the Internet Protocol his office knew that the posting was done in Indonesia from different addresses by possibly more than one persons. "In cooperation with the police we have been able to find who has posted the video," Gatot said. His side has been working marathon in the past few days in an effort to uncover the person (s) that have posted the video that have caused public outcry.         Yet, the results of the identification process have yet to be reported to police. Thus, so far, police have not yet received a report on the identification of the persons who spread the sex videos allegedly involving the well-known artists from the Information and Communications Ministry.          Zainuri Lubis, said  the ministry  had not yet submitted the result of its identification of the persons who had disseminated the  sex videos. Investigators will take the identities of the culprits once they have received the result of the identification by the ministry.          The one-star general said that investigators would take authentic evidence on the identities of the persons who had spread the porn videos. Then, the investigators would consult technological and informatics experts. "Investigators will surely take authentic evidence and work in stages," Zainuri said.***1*** (T.A014/A/HAJM/A/S012) 11-06-2010 22:01:

GOVT PLANNING TO ACQUIRE ALUMINUM JOINT VENTURE INALUM

By Andi Abdussalam

Jakarta, June 10 (ANTARA) -  The government is planning to acquire PT Indonesia Asahan Aluminium (Inalum), a joint venture  between Indonesia and Japan  producing aluminum in Asahan, North Sumatra, with an equity ownership ratio of 41 : 59.          State Enterprises (BUMN) Minister Mustafa Abubakar said  Indonesia had the financial capability to  take over Inalum. "We are able to take it over, whatever the price. We have already made the relevant calculations," the minister said after attending a coordination meeting on PT Inalum on Thursday.          He said a state-owned company would be assigned to acquire the Japanese stake in Inalum but he could not yet name the  state enterprise.  So far, state-owned mining firm PT Antam had been active in technical discussions on  the Inalum take-over plan.          The minister did not rule out the possibility that  other state mining companies would  offer themselves, saying his ministry was now drawing up a proposal on how and by which state firm Inalum would be taken over.          "The state enterprises ministry in its capacity as the holder of the government's shares in Inalum wants  the venture to be continued by Indonesia. We will propose that this project be given to a state firm," Mustafa Abubakar said.          The minister said that his side was making preparations on the proposal that would be taken to the Asahan authorities. The proposal contained a request that all  Inalum shares  be handed to the government.           On the possibility that a number of state firms could join in the management of Inalum, the minister said that what was important was preparations in the face of negotiations so that Inalum would fully be owned by the government.          "The problem of whether Inalum is  later  managed by two or three state firms is only a small thing," Minister Abubakar said.          "In essence, the proposal emphasizes the need for Inalum to have the position which benefits the interest of the nation. We will fight for that first," he said. He did not explain when the proposal would be completed, but he indicated that its drafting should not exceed the deadline of October 31, 2010.          "It will not take us that long to finish the proposal on the taking over of the aluminum project,"  Abubakar said.          He said that after it was taken over, Inalum's production would be designed to meet domestic demand. "The remainder will be exported but the volume designed for exports has not yet been decided,' he added.           The planned take-over of the Asahan-Inalum project would enable Indonesia to export aluminum at the going world market price. "We will leave it to  market conditions. Let's just see later on," Abubalar said  on the possibility of higher export prices if Inalum is acquired by the government.          However, it seems that priority would be given to domestic demand. "We will give priority to meeting domestic demand first and then the  remainder can be exported. The export destination could be  Japan," the minister said but admitted that he could not yet provide details on the percentages for the domestic market and for export.          "This will run on a  corporate basis. There will be demand from the domestic and international markets," the minister added.           He said that his ministry would not let itself be trapped in  calculations of  how much could be marketed at home and how much abroad. "We will not say that how many percent will be for this and the remainder for that. What will happen if we say that 70 percent are for the domestic market but demand turns out to be less than 50 percent. That would create a problem. So it is  better not to mention figures in the first place. The mechanism should  be left to the market," the minister.          In the meantime,  Chief Economic Minister Hatta Rajasa said that the government had two options regarding the continuation of the Inalum project in Asahan.          "The first option is that the project would be managed by state-owned firms (BUMN). This means that cooperation contract with Japan would no longer be extended," the minister said.          The second option is that the government and Japan would continue their cooperation but with options that benefit Indonesia. "For instance, the Indonesian government should be the majority share holder. Its production capacity and generators should be increased," he said.          Up to now, Japan with 12 private Japanese firms in the joint venture is the majority share holder, namely 59 percent while Indonesia only owns 41 percent. "If we choose the cooperation option we should be the majority share holder," the chief economic minister said.          According to Hatta, Japan and the government should have submitted a proposal to the Asahan authority. The proposal should be prepared by their respective technical teams. The government itself would continue to sharpen the technical assessment proposal by the establishment of an independent team to assess the value of the whole assets.          In 2013, the number of assets such as power plants with a capacity of 604 megawatts will automatically become Indonesia's possession. "We are ready to pay compensation in accordance with the 2013 booking value. We need to give attention to the booking value to know its values. It should not happen that the values are too high and in this case it should be assessed based on independent judgment," Hatta Rajasa said.          The government wants that the Asahan area would become a special economic zone in the future and for this it has to increase its production capacity, power generators and others.          "The production capacity and the number of power generators need to be increased. New investment is also needed because we have the desire to turn the area into a special economic zone," the minister said.***2*** (T.A014/A/HAJM/22:00/a014) 10-06-2010 22:05:0

GOLKAR THREATENS TO QUIT COALITION'S SECRETARIAT

By Andi Abdussalam

Jakarta, June 10 (ANTARA) - Disappointed by House of Representatives (DPR) members who turned down its pork barrel proposal, the Golkar party is threatening to quit the government's joint coalition secretariat (Setgab).           "If we cannot stay together, if we don't have the same views anymore, what is the use for us to stay in the Setgab," Yamin Tawari, associate chairman of Golkar's Executive Board, said on Wednesday in response to the DPR leadership decision to shelve a Golkar proposal on 'aspiration funds.'       The Golkar has tabled an aspiration funds proposal, where each House member would be given control over Rp15 billion in funds from the state budget to implement development projects considered urgent in the electoral region he or she is representing.On the whole, it would mean an additional state expenditure of Rp8,4 trillion per year.          However, the House of Representatives leadership has decided to shelve the Golkar Party faction's proposal.          The decision was taken at a House leadership meeting on Monday (June 7) after consultations with the finance minister, National Development Planning Board (Bappenas) chief, deputy finance minister and the chairman of the House's Budgetary Affairs Body.          With the decision, Golkar is considering breaking away from the government's joint coalition secretariat (Setgab) if political parties in coalition fail to find common views on its aspiration funds proposal.          "Representatives of parties in coalition have discussed the aspiration funds for members of the House of Representatives  at the Setgab. All have to share common responsibility," Yamin Tawari said Wednesday night.          He said that at a meeting at the Sekgab none of the coalition members had refused the proposal but later their members at the House said they rejected it. While, in fact, the aspiration funds proposal had not yet been discussed formally, yet the DPR members and factions rejected it.          "The DPR, the House Budgetary Body in particular, should have officially deliberated the matter first. At this forum, factions could forward their arguments. So, if they reject or accept it they would have clear grounds," Yamin said.          However, lawmakers of the political parties in coalition had said to the media that they had turned down the proposal, even if it had not yet been officially deliberated by the House.          In this case, Golkar felt it was being left behind by other coalition members. "If we cannot stay together and have no more similar views, what is the use for as to stay in the Setgab," Yamin Tawari said.          He said that he had made the statement not because Golkar was angry or was threatening to quit the secretariat but because it wanted that the coalition members would be consistent with their proposals.           According to House Vice Speaker Promono Anung, the House leadership meeting had discussed the various aspects of the proposal and in the process had questioned the way in which the figure Rp15 billion was arrived at, and how the funds would be channeled and spent. "Since there was no clarity on these points, we rejected the proposal," he said.          If the proposal was approved, it would only create opportunities for the misuse of the funds in the regions, Pramono said.      The more so, he added, because even now many regions were still unable to absorb allocated budget funds properly due to the absence of a transparent and accountable spending mechanism.          "In our view, the proposed aspiration funds may be easily misappropriated by the legislators concerned, or spent to serve their own personal or political interests," he said.          Therefore, although the Golkar Party faction's proposal had already been programmed for further discussion in the House, "the House leadership still has the discretionary power to shelve it," said Pramono, a member  of the Indonesian Democracy Party-Struggle (PDI-P).          "I am sure the aspiration funds proposal has no chance to be approved, and we in the House leadership are of one mind on this matter," he said.          Previously, other Golkar Party associate chairman Priyo Budi Santoso said the Golkar Party would not push its "aspiration"  funds proposal if  all other parties in parliament rejected the idea but instead called for an alternative scheme called "stimulus funds".          "If none of the other party factions in the House supports the aspiration funds proposal, we will move for the allocation of rural development stimulus funds of Rp1 billion per village," he said.           If the proposal to give each House member Rp15 billion in aspiration funds was not approved, Golkar would ask for the provision of special funds to spur rural development at a rate of Rp1 billion for every village in the country, he said.          Priyo denied that the aspiration funds idea was evolved by Golkar alone, saying other parties had once also favored it. "It is quite ironic that people are now saying it is only Golkar that wants it." he said. (T.A014/A/H-NG/a014) 10-06-2010 11:25:

RI'S EMISSION CUTTING PROGRAM NOT TO AFFECT TIMBER ESTATES

 By Andi Abdussalam

          Jakarta, June 4 (ANTARA) - Forest concession holders (HPH) and timber estate businesses (HTI) should not worry about the government's commitment to halt deforestation and reduce emissions made in a Letter of Intent (LoI) signed with Norway recently.

         Based on the agreement, the governments of the two countries  agreed that Indonesia would stop deforestation through the imposition of a moratorium on the conversion of peat land and natural forests.

         According to Forestry Minister Zulkifli Hasan, the agreement between Indonesia and Norway on emission reduction would not affect industrial timber estate (HTI) and forest concession (HPH) development programs.

        "The LoI only calls for a moratorium on forest conversion for plantations or non-forestry activities on peat land throughout Indonesia. HTI and HPH programs can continue," the minister said on the sidelines of the popularization of LoI to forestry businesses here on Friday.

         What the ministry of forestry would be doing was to put in order forest concessions already covered by  permits. So, the forestry development programs already approved by the government would go on.

         The forestry development programs are among others the annual Societal Forest Development (KHm) and Village Forest Development covering 500,000 hectares, Forest and Land Rehabilitation (RHL) in river basin areas (DAS) covering 300,000 hectares, HTI and Small-holders Timber Estate (HTR) covering 540,000 hectares, HPH Restoration (300,000 hectares) and Partnership Forest Development program.

         He said that the development of HTI and HPH would not be affected by activities the forestry ministry would carry out based on the LoI.

         The minister said that the government had set  its forestry development priorities as stipulated in its Medium-Term Development program (RPJM). The RPJM would serve as the basis for the actions to be taken to follow up the LoI.

         "Our efforts to manage our forests are linked to climate change, among others with regard to the Reducing Emission from Deforestation and Forest Degradation - Plus (REDD-Plus) scheme. So, I will  stress here once again that the LoI will not pressure us because it is in line with the RPJM plan," the minister added.

         It was mentioned in the LoI that the moratorium would start in  January 2011 and last two years on all peat land and natural forest conversions. "During the period there will be no licenses for conversions or any licenses for opening of peat land and natural forests," Zulkfli Hasan said.

         The governments of Indonesia and Norway signed in Oslo last month a Letter of Intent (LoI) on forest conservation worth US$1 billion as part of their joint commitment to overcoming climate change.

         The letter was signed by Foreign Affairs Minister Marty Natalegawa and Norwegian Minister of Environmental and International Development Erik Solheim at the guest house of Norwegian  Prime Minister Jens Stoltenberg. The LoI is part of the  REDD-Plus scheme in which Norway will provide up to US$1 billion in grants to  Indonesia to protect its forests.

         Based on the LoI, the Norwegian government will provide the US$1 billion if the Indonesian government is able to fulfill the three stage requirement as contained in the LoI.

         The first stage is capacity building which among others is carried out through the formation of a body with the authority to implement the program. The second stage is the implementation of a pilot project. The two governments will agree on a certain location for the pioneer project in Indonesia.

         The third stage is the implementation of the scheme comprehensively on the national scale. During this stage payments will be made based on the performance. The funds will be provided if Indonesia is able to prove its success in preventing deforestation and forest degradation.

         With the agreement,  Indonesia now has a chance to gain  US$123.75 million from its efforts to preserve its forests and reduce gas emission from deforestation next year, a senior official said.

         Director General for Forest Production Development Hadi Daryanto said here on Friday the funds constituted  payment for Indonesia's efforts to reduce its gas emission (C02e) by 123.75 million tons.

          He said the US$123.75 million could be claimed from Norway based on the Letter of Intent (LoI) signed by the two countries recently.

         "We have calculated that we will be able to reduce our gas emission by 123.75 million tons next year. If the price of CO2e is US$1 per ton, we can claim US$123.75 million. If in 2013, the price of the gas emission increases, we will get more," he said.

          He said that of the country's 130 million hectares of forest, about 1,175 millions hectares were deforested every year. Thus, the country's average deforestation pace is 1.175 million hectares per annum.

          According to the forestry official, Indonesia next year is expected to reduce the pace of its deforestation by 225,000 hectares to about 950,000 hectares only.

          The volume of biomass carbon of non-peat land forest is about 550 tons per hectare. So, with its success to stop the pace of its deforestation (by 225,000 ha x 550 tons CO2e), Indonesia will get a payment of US$123.75 million.

    
(T.A014/A/HAJM/A/S012)04-06-2010 21:22:

NORWAY'S FUNDS CAN HELP RI ACHIEVE ITS GAS EMISSION TARGET

By Andi Abdussalam

Jakarta, May 28 (ANTARA) - The Norwegian commitment to provide Indonesia with S$1 billion for forest conservation will help accelerate the Indonesian government achieve its goals on climate change and cut its gas emissions by 26 percent by 2020.          The significant amount of the fund provided  by Norway through  Reducing Emissions under the Deforestation and Degradation Plus (REDD-Plus) scheme will change the way how forests in Indonesia are managed, Frances Seymour, director general of the Center for International Forestry Research  (CIFOR), said on Friday.          Indonesia is host to the world's third largest tropical rain forests after Brazil and Congo but forest damage in this country is the fastest in the world, reaching 1.1 million hectares a year, according to CIFOR.          The REDD-Plus is an important  scheme for Indonesia to achieve its target of reducing its green-house gas emission by 26 percent in 2020. Thus, the Norway assistance amounting to US$1 billion is instrumental to stopping forest damage in Indonesia.          The governments of Indonesia and Norway signed in Oslo on Wednesday a Letter of Intent (LoI) on forest conservation worth US$1 billion as part of their joint commitment to overcoming climate change.          The letter was signed by Foreign Affairs Minister Marty Natalegawa and Norwegian Minister of Environmental and International Development Erik Solheim at the guest house of Norway Prime Minister Jens Stoltenberg. The LoI is part of the  REDD-Plus scheme in which Norway will provide up to US$1 billion in grant for Indonesia to protect its forests.          Based on the LoI, the Norwegian government will provide the US$1 funds if the Indonesian government is able to fulfill the three stage requirement as contained in the LoI.         The first stage is capacity building which among others is carried out through the formation of a body with the authority to implement the program. The second stage is the implementation of a pilot project. The two governments will agree on a certain location for the pioneer project in Indonesia.          The third stage is the implementation of the scheme comprehensively on the national scale. During this stage payments will be made based on the performance. The funds will be provided if Indonesia is able to prove its success in preventing deforestation and forest degradation.          "We will implement our obligation as specified in the LoI because Indonesia has the obligation to save our forest, environment for our people and for our future," President Susilo Bambang Yudhoyono who witnessed the signing of the document, said.           Indonesia has therefore decided to reduce its emissions by 26 percent before 2020 for the interest of the Indonesian people and the people of the world. At present, Indonesia still faces many challenges and problems in terms of funds to reduce deforestation.          "We have to reduce poverty and increase the people's living conditions, but we also have to protect our environment in facing climate change and global warming. These are twin aims, although we know we have to deal with this with or without international help," he said.          According to Jens Stoltenberg,  under the agreement Norway is committed to support Indonesia's efforts in preserving its forests at a cost of one billion dollars provided in three stages.          "The contribution will be based on reducing forest felling. Therefore, monitoring and verification are a key to make sure that progress is being made in reducing forest felling," he said when underlining the importance of control.          To assure the implementation of the REDD-Plus scheme,  the Indonesian government is sending a team to Brazil to see from close quarters the implementation of the forest conservation cooperation program by way of the REDD+ mechanism there.          Indonesia, the president said, will especially focus on the mechanism of control and measuring the effectiveness of the program, so that Norway will act the same in implementing the program both with Indonesia or Brazil.          Besides sending a team to Brazil, the Indonesian government will also set up a credible verification and monitoring body to ensure that the REDD-Plus cooperation program would be well implemented in a six month period.          "We will establish a credible monitoring body ( to assure the program will run well)," President Yudhoyono said.          According to Forestry Minster Zulkifli Hassan, the Norwegian assistance will be managed by a special institution. "We are now talking about the body and its form. We would like to propose that the body should be in the form of a multinational trust fund which will be chaired by Pak (Mr) Kuntoro Mangkusubroto  (chief of the presidential working unit for acceleration of reforms programs). The body will be charged with tasks of arranging everything and managing the funds," the minister said.          Zulkifli said that he in his capacity as the forestry minister hoped the body would be in that (trust fund) form because it would relatively be easier.          "Its members can be representatives from Indonesia, the World Bank and others, it's up to the consensus. It (the trust fund) will handle the funds from Norway," he said.      (A014/A/H-NG/A/O001)28-05-2010 11:32:

ANAS EXPECTED TO OVERCOME "DYNASTY" POLITICS

By Andi Abdussalam

Jakarta, May 26 (ANTARA) - The election of Anas Urbaningrum to the chairmanship of the Democrat Party (PD) has allayed  fears the party would eventually be controlled by a "dynasty" but to definitively kill these fears the  party's new 'skipper' should be able to free himself from the patronage of the party's chief adviser  Susilo Bambang Yudhoyono, experts say.          "The Democrat Party does not vulgarly apply dynasty politics like the Indonesian Democratic Party of Struggle (PDI-P), so that Anas  has no major problem to develop the PD into a modern political party. He can  do it as long as he does not make Susilo Bambang Yudhoyono the object of a personalized cult," Prof. Dr Ronny Pariela of the Ambon-based Pattimura University (Unatti), said on Wednesday.          After all, Anas is not a special 'prince' or a family member of Yudhoyono. His election to chair the party simply indicates that the perception among the public that the Democrat Party could turn into a dynasty party is losing ground.          "Anas was elected chairman of the Democrat Party not because he is a family or a close relative member or a 'golden boy' of Yudhoyono but because he was elected through a genuine democratic process," political analyst Syaiful of West Sumatra's University of Andalas (Unand) said meanwhile.          Therefore, he said, the public believed that Anas Urbaningrum is able to build the Democrat Party into a modern political party. In this case, Anas should have the courage to free himself from Susilo Bambang Yudhoyono's patronage to develop the party in the future.          "Anas should emerge from Yudhoyono's shadows. It means that he must be  brave enough to make his own decisions and take his own positions, although he should continue to give a place to Yudhoyono," noted historian Anhar Gonggong said.          The noted historian was of the opinion that Anas Urbaningrum should be able to prove that the party was capable of continuing to win the hearts of the people without Susilo Bambang Yudhoyono.          It was undeniable that Yudhoyono was the decisive factor in the  Democrat Party's consecutive wins  in the past two general elections in Indonesia but Anas had  gradually to try to end this dependence, he said.           Pariela even reminded that Anas should not use Yuhoyono who had been named as the general chairman of the party's highest assembly in its second congress recently as the main symbol of the party.          "He should carry out nationalist politics management so that the Democrat Party would not undergo erosion of public confidence like what has been experienced by PDIP which puts Megawati Soekarnoputri as a personalized cult leader," Pariela said.          He said that the discourse on the idea to pick Yudhoyono's son Edhie Baskoro Yudhoyono for the party's secretary general's post in the coming five years, Pariela said it did not reflect dynasty politics.          "It is a kind of caderization with the aim of crowning Baskoro who indeed has the capability and capacity as reflected in his success to organize the congress that proceeded democratically," he said.          What is important is that Anas must improve the party's internal management and build qualified cadres.          According to Anhar Gonggong, besides strengthening the party's internal management, Anas should also find a figure who could emulate  Yudhoyono's success in winning the hearts of both the domestic and international communities.          He added that Anas's efforts to find a figure to replace Yudhoyono would be a key factor for the Democrat Party to win the 2014 presidential election.          "Anas is too little known to be nominated for president in the 2014 election. Therefore, there should be another figure who is able to convince the Indonesian people, and also win the support of the international community," Anhar said.          Syaiful in the meantime said that the Democrat Party would be able to win election if Anas is successful in building the party with his calm, mature and educated leadership style.         "The Democrat Party will win a general election of a presidential election if Anas is able to lead the party with his calm, mature and educated leadership style," Syaiful said.          He added that the Democrat Party would win if Anas could maintain his acceptable profile to all circles, including those in the networks of the Indonesian Muslim Students Association (HMI), nationalists and academicians.          More important is that he should not forget the people interest. Thus, historian Anhar Gonggong expressed hope that Anas Urbaningrum would be able to make the Democrat Party struggle for the people's interest, because there was the impression the  Democrat Party had yet to improve  the "color" of national politics.          "In my view, the Democrat Party is just like the other political parties that have yet to make any significant difference in the country," Anhar said.          Anas Urbaningrum, currently chairman of the party faction in the House of Representatives, was on Sunday elected general chairman of the Democrat Party for the 2010-2015 term after a vote in which he beat two other candidates, Marzuki Alie, the present Speaker of the House of Representatives, and Andi Malarangeng, the current sports and youth affairs minister.      (T.A014/A/HAJM/16:05/a014) 26-05-2010 16:31:1

RI CAREFULLY WATCHING EUROPEAN FINANCIAL CRISIS

By Andi Abdussalam

Jakarta, May 26 (ANTARA) - Indonesia will continue to cautiously watch a possible escalation of the Greek financial crisis although its economic fundamentals are relatively strong.          "The world economy is improving but we have to maintain cautiousness against risks that could arise as a result of the financial crisis in Greece," Chief Economic Minister Hatta Rajasa said.          Basically, Indonesia's good and stable macroeconomic fundamentals are able to protect the country from the impact if the financial crisis in Greece is worsening.          "But we have to keep abreast of the developments of the Greek crisis and be ready to take appropriate steps," the minister said on Tuesday.           The same concern was also expressed by outgoing Finance Minister Sri Mulyani Indrawati last week.          Speaking to the House plenary on the macro economy and fiscal policy for the 2011 budget year, Sri Mulyani said that the government would keep watch of financial crisis that was taking place in European countries. This is a challenge for Indonesia in formulating its fiscal policies in 2011.          "The mixed signs of recovery in on hand and uncertainties on the other in Europe are a challenge Indonesia is facing in formulating its fiscal polices for 2011," Mulynai said.          According to reports, Greece has been facing financial crisis with an overall public debt of about 300 billion euros (399 billion dollars).  The Greek debt drama has mushroomed into the biggest crisis in the euro's 11-year history, sparking concerns that it could spread to other weak members of the single currency area battling runaway deficits and debt.          According to Sri Mulyani, the Greek financial crisis has forced Western European countries to take salvaging policies. Although the economic turmoil has begun to recede, yet corrective steps still needed to be taken amid the difficult struggle that will still last for sometime, including how to reduce budget deficit.          "The European financial crisis still keeps uncertain potentials that burden the recovery of the world economy," Sri Mulyani, who will be assuming her post as a managing director of the World Bank next month, said.          She said the European economic crisis reminded that even though it was able to give solution and create economic growth in short term, bad and unsustainable economic policies such as poorly planned fiscal expansion would in the long run create serious and deep economic crisis.          "Indonesia must continue to ensure that its economic policies would be formulated on the basis of prudential combination where macro economic instruments are aimed at maintaining long term equilibrium and economic stability, while structural constraints must be overcome by comprehensive and sustainable reform polices," she said.          At present, it could be said that the global economic situation is still fragile and full of uncertainties, despite the fact that in general term it is showing a trend of recovery.          "Countries like Portugal, Italy, Spain, Ireland and Greece have the potentials to experience a heavy fiscal condition with the government debt ratio far above the agreed maximum level of 60 percent. This condition could cause the weakening of confidence in these countries' state debentures and in euro currency," she said.          She said that the threat of the global crisis --as a result of the European economic crisis triggered by expansive fiscal policies with high and long term budget deficits-- would lead to a debt crisis for the state.          "The European financial crisis has the potential to create financial crisis escalation as a result of the systemic impact of declining confidence. The weakening of the euro currency and the fall of state debentures have the potentials to affect the financial and banking sectors," Sri Mulyani said.          However, the impact of the Greek financial crisis has so far no  serious effect on Indonesia's economy as reflected in the country's economic growth (5.7 percent), upward investment trend (25 percent) and significant growth of industries (4.01 percent) in the first quarter of 2010.          "The economic turmoil that plagues Greece will be overcome soon so that it would not have serious impact on the global and Indonesia's economies," Senior Deputy Governor of Bank Indonesia (BI) Darmin Nasution said.          The impact of Greek financial crisis was only sligtly felt by the country's stock exchange.          "The stock price index (IHSG) happened to drop as a result of Greece's financial crisis. Indeed there was a downward trend in stock prices. It was the influence of the same trend in Greece, Portugal and Spain," Hatta Rajasa said.          The minister made the comments when last week the composite stock price index (IHSG) fell 112.7 points or 3.18 percent to the 2,846 level and the weakening of the rupiah from Rp9,020 to Rp9,110 per US dollar.          He was sure that the decline in the stock price index would not continue because Indonesia's economic fundamentals were still well maintained.          Therefore, the government is optimistic that Indonesia?s economy will grow 6 percent in the second quarter of 2010. "I am optimistic it will grow 6.0 percent in the second quarter. Many quarters have even predicted our economic growth will exceed 6.0 percent in 2010, or higher than the target of 5.8-6.0 percent," Hatta Rajasa said.          Darmin Nasution also shared Rajasa's optimism, saying that Indonesia's economic growth would reach 6 percent at the end of the year, though there was economic turmoil in Europe.          "We hope it would be more that the targeted 5.8 percent. It is not impossible for the country to reach a growth of 6 percent," Darmin Nasution, who is also acting governor of the Indonesian central bank, said.      (T.A014/A/H-NG/A/O001) 26-05-2010 11:36: