Jumat, 02 Mei 2008

NIKE'S PLAN TO TERMINATE CONTRACTS CREATES PROBLEMS

By Andi Abdussalam

Jakarta, July 20 (ANTARA) - Like a husband who somehow has become tired of being married to his wife of many years, and has therefore decided to divorce her, American apparel and sports equipment company Nike Inc. is to terminate its contracts with PT Hardaya Aneka Shoes Industry (HASI) and PT Nagasaki Paramashoes Industry (NASA) which have been supplying it with shoes for about 20 years.

        Nike Inc. decided to end its long-standing cooperation with the two Indonesian shoe manufacturers after the latter had rejected Nike's new price offer of US$11 per pair of shoes which was so much less than the US$15 per pair it had offered 18 years ago.

        The American company's decision to cut its relationship with PT HASI and PT NASA upset not only the managements of the two Indonesian firms but also their 14,000 workers who fear a stoppage in Nike orders will eventually cause them to be laid off.

        President Director of PT HASI and PT NASA, Hartati Murdaya said her companies could not accept Nike's new price offer because the wages of their workers who had been working with them for over 15 years had reached over Rp1 million plus over-time payment of more than Rp2 million per person.

        "The price offered by Nike is US$11 for the manufacture of a pair of shoes. This is lower than the US$15 price for a pair of shoes it offered 15-18 years ago. Now it is trying to find new factories which could supply it with shoes for US$10 or even US$7 a pair," she said.

        Newly established factories could offer a lower price as their workers' salaries are still below one million rupiah, she added.

        Hartati Murdaya said she had asked Nike Inc not to stop placing orders with her two companies at the same time because they were employing a total of 14,000 workers.

        "We hope Nike will extend its work contract with PT HASI for 18 more months before terminating it. For PT NASA we have asked a 30-month work contract extension," she said.

        She said the two companies had been receiving orders for 20 years from Nike Inc. But Nike unilaterally decided to terminate its work contracts for the production of Nike shoes with the two companies.

        "I have to be resigned to this fate and will accept whatever best decision is to be taken, but to me, workers' lay-offs are not a way out because their severance payments could be invested in another form of business that could reemploy them," she said.

        With Nike Inc's plan to terminate its work contracts, about 14,000 workers of PT NASI and PT HASI are facing the prospect of being laid off.

        On Monday this week, thousands of workers from the two companies held a rally outside the Nike office in Jakarta calling on the American company to continue its work contracts with their companies so that they would not lose their jobs.

        They said if Nike Inc pushed through its plan to end its work contracts, they would boycott the American company's sports shoe products.

        "The workers are making all-out efforts to have Nike Inc continue its cooperation with their companies," Sumardi, chairman of the Apparel and Shoes Unit of the All Indonesian Workers Union (SPSI) at PT NASA, said.

        In response to the problem being faced by the workers at the two companies, President Susilo Bambang Yudhoyono called for an immediate solution to their fate.

        The president said the problem of thousands of factory workers facing the loss of their jobs must be solved soon and in the best possible way.

        "The president has asked that data on the matter be collected and the problem be solved as soon as possible," Industry Minister Fahmi Idris said.

        Fahmi Idris said he had met with Trade Minister Mari Pangestu, Manpower and Transmigration Minister Erman Suparno, Investment Coordinating Board Chairman M Lutfi and the owner of PT Nasa and PT Hasi, Hartati Murdaya.

        BKPM chief Muhammad Lutfi will also meet with Nike Inc.'s management, to get information on its decision to terminate its work contracts with PT Nasa and PT Hasi. After necessary data are collected the government will come up with a formulation for the solution to the problem.

        Now, the government has set up a crisis center with members from the ministries of manpower, trade and industry to mediate in the dispute between Nike Inc and PT HASI and PT NASA.

        Speaking to reporters after receiving representatives of the Confederation of Indonesian Workers' Unions (KSPSI) and the National Workers Union (SPN), Manpower Minister Erman Suparno said as an initial step the ministers concerned would be notified about it.

        Discussions would later be held to determine steps to be taken and the time needed to settle the case. In line with the president's order, the problem between Nike and the two shoe manufacturers will hopefully be immediately settled.

        "We will take steps for its settlement and facilitate a meeting between Nike, NASA and HASI," the minister said.

        At the meeting with the minister, the workers' unions only conveyed a demand for the continued employment of the 14,000 workers in the two companies. Time and conducive situation would be needed for the process to move and in view of that the minister called on workers and activists to cool down so that a good settlement could be reached soon.

        (A014/A/HAJM/13:10/A018) (T.A014/D/A014/A018) 20-07-2007

GOVT FORESEES BETTER ECONOMIC GROWTH IN LATE 2007

By Andi Abdussalam

Jakarta, July 13 (ANTARA) - The government seems upbeat the economy will grow better in the second semester of 2007, though it failed to achieve its growth target in the first half of the year.

        Initially set at 6.3 percent, the economy only grew 6.03 percent in the first half, but there are grounds why the government is optimistic.

        The economic growth hit six-month highs in June, bringing the figure of economic growth in the second quarter at a range of 6-6.11 percent from 5.97 percent in the first quarter.

        "This is very convincing and provides a conducive climate," Anggito Abimanyu, head of the finance ministry's fiscal policy board, said.

        Indonesia's economy is estimated to have grown by 6.04 percent in the first half of 2007 on improving economic conditions in June.

        With the economy expanding in the range of 6-6.1 percent in the second quarter, the government is optimistic about the economy growing by 6.3 percent as projected, he said.

        Looking ahead, the Finance Ministry saw the economy in the third and fourth quarters expanding by 6.3 percent and 6.5 percent respectively. If the third and forth quarters' figures are realized, the economy will grow 6.4 percent in the second semester, or 6.22 percent for 2007.

        Unlike the government, the House of Representatives is less optimistic with the economic growth in the second semester of this year. In a debate on a revised 2007 state budget, the House suggested that the economic growth for 2007 should be set at 6.1 percent, lower than the previous target set by the government at 6.3 percent.

        After five hours of heated debates on Thursday night, however, the government and the House were finally able to agree on the figures of the economic growth assumption in the revised 2007 state budget.

        The heated discussions centered on the economic growth target for this year with Ramson Siagian of the Indonesian Democratic Party-Struggle (PDIP) faction insisting the economy would grow only 6.1 percent and Finance Minister Sri Mulyani Indrawati sticking to the initial government target of 6.3 percent.

        Both the government and the House, however, finally agreed that the economy would expand in the range of 6.1-6.4 percent this year.

        "If the DPR wants a pessimistic growth rate of 6.1 percent, the upper growth rate should be raised to 6.4 percent. The range of 6.1-6.4 percent accommodates both the optimistic and pessimistic growth rates," Sri Mulyani said.

        Ramson said judging by previous records, economic growth in the second semester would not perform better than in the previous one.

        "What is more, the government recently proposed to cut capital expenditure from Rp78 trillion to Rp68 trillion," he said.

        The finance minister said with the economy estimated to have grown in the range of 6-6.11 percent in the second quarter, the economic growth rates in the third and fourth quarters were likely to reach 6.3 percent and 6.5 percent respectively.

        "The third and fourth quarter growth is to be driven by high government spending, investment, export and household consumption -- the prime engine of growth," she said.

        Investment, which is expected to fuel economic growth, will also increase in the second semester. The investment in the second semester of 2007 far exceeds the Investment Coordinating Board (BKPM) target of Rp41.54 trillion, BKPM head Mohammad Lutfi said.

        The Indonesian government licensed foreign and domestic investment projects worth Rp65.27 trillion in the first semester of 2007, up 52.60 percent from the same period last year.

        "Of the total, Rp36.9 trillion (US$4.1 billion) came from foreign investment and the rest from domestic investment," Mohammad Lutfi said.

        The BKPM has set the target of attracting domestic investment worth Rp11.58 trillion and foreign investment worth Rp29.96 for the first half of 2007.

        Convinced with better growth in the second semester of this year, the government has also revised its initial inflation target from 6.5 percent to 6 percent.

        Under the revised 2007 state budget, the inflation rate target for 2007 is set at 6 percent or 0.5 percent lower than the initial projection of 6.5 percent.

        "Though the government is able to provide the needed goods and services, inflation would fluctuate due to psychological effect and prices will rise before Lebaran festivities," Central Bureau of Statistics (BPS) head Rusman Hariawan said.

        He said however that the BPS predicted inflation would remain lower than the 6.5 percent level as set in the 2007 state budget.

        "If we look back to the past, there were fluctuations in September and October during the fasting month and the post-fasting Lebaran festivities," he said.

        Bank Indonesia (BI) Governor Burhanuddin Abdullah believed full-year inflation rates would hit the central bank's inflation target of 6, plus or minus 1, percent for 2007 and of 5, plus or minus 1, percent for 2008.

        The central bank also voiced its optimism over better economic conditions in the second semester of 2007. Burhanuddin Abdullah said BI was optimistic the economy would grow by more than 6 percent this year, citing robust lending growth as a reason.

        "Apart from that, with the state budget realization rate expected to improve in the third and fourth quarters, economic growth is likely to exceed the figure," Burhanuddin said following a meeting of the bank's board of governors this week.

        The meeting agreed that the economy would perform better in the second semester, he said. The economy in the two previous quarters was on the right track and it would continue to expand during the rest of the year, he said. (A014/a/b003/B003). (T.A014/A/A014/B003) 15-07-2007 00:46:35

EU'S FLIGHT BAN BEGINS SHOWING IMPACT ON INDONESIA

By Andi Abdussalam

Jakarta, July 1 (ANTARA) - Indonesia begins to feel the impact of the European Commission's plan to ban Indonesian airline companies from flying in its airspace, though certain circles said that it would not affect domestic flights.

        In less than a week after Thursday's reports that the European Commission would ban 51 Indonesian airline companies from flying to the European Union member countries as of July 6, 2007 due to flight safety concerns, air travel operators in Indonesia began complaining this weekend over a blow to the tourism sector.

        European tourists holidaying in Indonesia are now advised by European travel agents to cancel their domestic flights for scheduled visits to other Indonesian cities.

        "We have received complaints from several travel agents in Bali and Surabaya that their European guests are urged to cancel their flights to other Indonesian cities," Chairman of the Bali office of the Association of Indonesian Tours and Travel Agencies (ASITA), Al Purwa said at the weekend.

        Concerns over a possible impact on Indonesian tourism of the European Commission's action have been raised by several business operators. "The European Commission's decision step to ban Indonesian airline companies from flying to the region will have a serious impact on tourist arrivals," chief of the South Sulawesi chapter of the Indonesian Hotels and Restaurants Association (PHRI) Andi Ilhamsyah Mattalatta said.

        French and German tourists who are traveling from Bali to Surabaya, are now urged to cancel their flights to Manado, North Sulawesi, while other European tourists holidaying in Bali and intending to travel to Makassar, South Sulawesim are also urged to cancel their flight plans.

        "This is serious. While Indonesian airline companies had been banned from flying to Europe, the ban also dealt a major blow to domestic tourism as it would also affect the world's confidence in flights in Indonesia," Al Purwa said, while adding that it would become even worse if major tourist supplier countries such as Japan and Australia followed suit.

        Tourists in European Union countries planning to visit Indonesia are asked by their travel agents in their countries to sign a statement that they would not use Indonesian aircraft.

        "If the European tourists ignore the agreement and use Indonesian aircraft to fly to other domestic destinations, insurance companies would not cover such trips," Purwa said.

        The EU ban could reduce the number of foreign tourists visiting Indonesia. According to Andi Ilhamsyah Mattalatta, the ban on Indonesian airline companies rom flying to Europe would pose difficulties to Indonesia in achieving its projection of six million tourist arrivals in 2007.

        Previously, ASITA Chairman Ben Sukma said the ban would have no direct impact on air transportation in the country. "The ban would have no adverse effect as no Indonesian aircraft is now flying straight to destinations in Europe," he said.

        A similar voice was also aired by Vice President Jusuf Kalla. He said the ban would pose no problem as national airline companies such as the national flag carrier Garuda Indonesia had no scheduled flights to any European destination but the ban should be responded to positively.

        "The positive thing is that it will make us more introspective about flight safety," the vice president said, adding that criticism of flight safety did not come only from the European Union but also from the Indonesian community as well as the press.

        Therefore Indonesian airline companies must continue to improve their flight safety. "For the time being, there is no problem. So, there is no formal effect, only a psychological effect," he said.

        Sukma and Purwa concurred with the vice president. "The ban should prompt the flight regulator, in this case the ministry of transportation, to step up its supervision, which has been rather lacking, of the national airline companies," Sukama said.

        Purwa on the other hand asked the government to urge domestic flight operators to improve the quality of their fleet. "National airline companies should improve their rating, such as from grade three to grade two, and Garuda, the national flag carrier, must raise its grade to grade one," he said.

        In the meantime, The Indonesian National Air Carriers Association (INACA) urged the government to act promptly. "The government could among other things ask for a clarification on the matter or retaliate in the same way if the ban is really implemented," INACA's secretary general, Tengku Baharuddin, said.

        He did not rule out a retaliation because if the EU really implements the ban, the existing aviation agreement between Indonesia and European countries will automatically become invalid.

        Baharuddin said he was surprised by the the EU's decision because the air agreement signed by Indonesia and Europe did not mention safety requirements and assessment including a requirement for certain European airlines to audit an Indonesian airline company.

        The agreement only covers such matters as traffic, flight slots, taxation and seat capacity. If the aviation accord with Europe no longer applies, it is proper for Indonesia as a sovereign country to take a firm stand, he said. (A014/A/HNG/A/E002) (T.A014/A/A014/A/E002) 01-07-2007 23:37:29

INDONESIA'S NUKE REACTOR PROGRAM STILL HANGING IN THE BALANCE

By Andi Abdussalam

Jakarta, June 25 (ANTARA) - Indonesia's 30 year-old effort to build a nuclear power plant in Central Java to increase the declining electricity supplies for its power consumers has continued to face opposition from local people.

        The government has conducted feasibility studies for about 30 years in order to enable it to build a nuclear reactor in Muria peninsula, Jepara district, Central Java, but environmentalists and local residents still doubt the government's ability to provide safe technology.

        "We doubt the ability of the government to operate and manage a nuclear reactor," coordinator of the Jepara Residents Forum Lilo Sunaryo was quoted as saying by Republika daily on Monday.

        In response to the opposition, the government is monitoring people's reactions and trying to explain to them the results of the research it has conducted for about three decades.

        Environment Minister Rachmat Witoelar said the government's plan to set up a nuclear power plant was not yet final. But he said the government appreciated the people's objections to its plan to build a nuclear power plant in the area.

        He said his office was keeping a close watch on what was being done to implement the plan, including the tackling of the project's environmental aspects which normally had to be done by an analysis and assessment of the project's possible impact on the local environment.

        As long as the proposed nuclear power plant had not yet been built, the plan should be considered as just a "discourse" so that there was no need for people to make a fuss about it too often, Witoelar said.

        The peril of a nuclear incident is the main reason behind the people's opposition. The explosion of Chernobyl's nuclear reactor in Russia in 1986 and the leakage at Mihama's nuclear reactor in Japan in 2004 are still fresh in their minds. In Chernobyl, ten years after the leakage, thousands of people died of exposure to discharged radioactive material.

        Indonesia's experience --through its National Atomic Energy Agency (BATAN) which has three nuclear reactors in Yoyakarta, Bandung and Serpong-- to operate nuclear reactors has not erased people's doubts.

        Lilo said the three reactors were of small scale with temperatures ranging between 100 and 150 degrees Celsius. They were normal types of reactors designed purely for research.

        A nuclear power reactor needs 2.5 million litters of water per minute to be used as a coolant for the temperature in the plant which could reach between 400 Celsius degrees to 600 Celsius degrees.

        If it leaks, the water that gushes out can be as hot as 3,000 degres Celsius which is able to melt iron. This is apart from the radioactive material it would discharge to the environment.

        The International Atomic Energy Agency (IAEA) data show that nuclear waste radiation would last for 24 thousand years.

        Yet, BATAN officials assured that the technology to protect people from possible incidents had been prepared.

        BATAN head Hudi Hastowo was quoted by Republika as saying that the nuclear power reactor that would be built in Japara would use internationally standardized technologies.

        Before starting to build a nuclear power reactor, the agency had carried out 30 years of feasibility studies with consultants from the IAEA in 1976, from Italy in 1984, from BECHTEL (US) in 1984 and from the United State-Japan) in 1994.

        Hastowo said the BATAN reactor in Serpong is not of a small scale as claimed by Lilo. It can generate up to 30 megawatt of electricity. Batan technicians already have the experience to operate a nuclear reactor for 20 years.

        The Muria nuclear reactor is being prepared with high security system. BATAN is considering using the pressurized water reactor system. This technology is able to resist chained fusion reaction, which is normally called China syndrome. The reactor would automatically shut down when the syndrome takes place.

        With the technology, the Indonesian people are advised to support the national nuclear energy development program and can rest assured they will be adequately protected from the radiation hazards associated with nuclear power plants.

        "Technology always poses risks, so does the use of nuclear energy. But this should not lead us to consider nuclear technology negatively as Indonesia will need huge energy sources in the future," Sukarman Aminjoyo, head of the Nuclear Energy Supervisory Agency (Bapeten), said.

        Despite people's trauma over the Hiroshima and Nagasaki atomic bombs and the Chernobyl nuclear accident, Indonesia had already been making beneficial use of nuclear technology for years, namely in the application of radiation technology in the food and beverage industries, Sukarman noted.

        Amidst the pros and cons on the nuclear power reactor plan, the government is still collecting inputs from the people. "The people's objections to the development of a nuclear power reactor are a valuable input for the government," Minister Witoelar said.

        After all, nuclear reactor ranked lower than bio-fuel, wind power and geothermal on the list of various alternative energy sources Indonesia intended to develop to reduce its dependence on fossil fuel oils, he said. (A014/A/HAJM/B003) 2. 21:15. (T.A014/A/A014/B003) 25-06-2007 21:36:01

INDONESIA TRYING TO RESTORE JAPANESE INVESTMENTS

By Andi Abdussalam

Jakarta, June 23 (ANTARA) - After five days of marathon meetings, delegations from Indonesia and Japan succeeded in Tokyo on Friday night to sign the final draft of an Indonesia-Japan Economic Partnership Agreement (EPA) designed to promote economic cooperation between the two countries.

        The document will be brought to Jakarta in mid-August for signing by the heads of government of the two countries, namely Prime Minister Shinzo Abe and President Sosilo Bambang Yudhoyono.

        Indonesia and Japan have tried their best to finalize the EPA draft which is expected to facilitate and promote economic cooperation, and increase Japanese investment which has been declining over the past ten years in Indonesia.

        The Indonesian delegation in the negotiations held at the Japanese foreign ministry building in Tokyo, was headed by Soemadi Brotodiningrat, while the Japanese delegation included Japanese deputy foreign minister for economic affairs Masaharu Kohno.

        "With the completion of the final negotiations on the draft of the Economic Partnership Agreement (EPA), direct investment from Japan will hopefully flow again to Indonesia in a significant amount," Soemadi Brotodiningrat said.

        Rachmat Gobel, a member of the Indonesian delegation who is also vice chairman of the Indonesian Chamber of Commerce and Industry (Kadin) hoped that the Indonesia-Japan Economic Partnership Agreement would create balanced and mutually beneficial economic relations.

        "Indonesia needs capital and technology from Japan. We can also ask them to increase their investment and training for the country's human resources in the framework of technology transfer," he said.

        Japan's investment which was leading in Indonesia in the past has been declining in recent years. With the EPA, Indonesia hopes the trend will be reversed.

        "In the past ten years Japanese investment in Indonesia has continued to decline," Rachmat Gobel said.

        He said that Indonesia and Japan would celebrate the 50th anniversary of their diplomatic ties next year, hoping that it would serve as a good momentum to refresh their ties.

        In the past ten years Japanese investment in the country had continued to drop because Indonesia's investment climate was uncompetitive compared to that of other countries, particularly those in the Southeast Asian region.

        "Kadin hopes next year's 50th anniversary of Indonesia-Japan relations will be a momentum for increasing cooperation between the two countries in the social, cultural and economic - particularly investment - fields," Rachmat Gobel said adding the EPA should serve as an anniversary gift.

        Indonesia and Japan actually have complementary economic relations which, if developed maximally, could benefit both countries.

        "Japan has technology and much capital while Indonesia has a lot of natural resources and a large market. If the two potentials are synergized they could become strong capital for increasing balanced and mutually beneficial cooperation," he said.

        With the EPA, Indonesia sets a target to lure a flow of Japanese investment at 140 to 160 billion US dollar or two folds in amount since the past fifty years.

        Masaharu Kohno on a different occasion said that Indonesia is very important to Japan, and the economic cooperation between the two countries needs to be maintained and expanded.

        It was admitted however that Japanese businesses were still harboring doubts about the prospects of investing in Indonesia although they often say Indonesia remains a prospective country for investment.

        "Japan is still harboring doubts and is waiting for the promulgation of the new Investment Law and wants to know how it is implemented in the field. They are also closely monitoring developments in taxation and labor affairs in Indonesia," Halida Mujani, special advisor for international cooperation at Indonesia's Trade Ministry, said.

        But Brotodiningrat was convinced that the EPA could facilitate both sides to eliminate Japanese businesses doubts. As to the opinion that Japan is at present seen as having no sense of speed in implementing its economic reform policies, this senior diplomat said EPA would push Indonesia to be more serious in making it better in the future. "At least EPA is able to deflect Japan's doubts," Brotodiningrat said.

        To this end, one of the important things Indonesia will have to do is to improve Japan's business confidence (in Indonesia), Halida Mujani said meanwhile.

        "Indonesia is expected to launch more active business promotions in Japan in order to increase the confidence of Japanese businesses. This will also serve as an important indicator in assessing the success of the EPA," Halida said.

        She said the problem on the Indonesian side now was to what extent it had prepared itself to be able to seize the opportunities arising from the opening of the Japanese market to Indonesian goods under the EPA.

        According to Halida, Japanese businesses were still harboring doubts about the prospects of investing in Indonesia although they often say Indonesia remains a prospective country for investment.

        She said Indonesia's weaknesses lay in the supply of goods. "We have to work hard to increase our production and supply capabilities," she said.

        The same opinion was expressed by Asianto Sinambela, director of trade, industry and investment at Indonesia's Foreign Ministry, who said the EPA should encourage Indonesia to be more aggressive in seizing the market opportunities the agreement would open.

        He said Indonesia was facing new challenge from Japan. "The problem will lie in our ability to utilize the opportunities. The EPA will encourage bigger exports to Japan," he said.

        Indonesia's agricultural, plantation, fishery and manufacturing products must meet international standards to enter the Japanese market, he said.

        (A014/A/HAJM/b005) 2. 19:40/20:45 (T.A014/A/A014/B005) 23-06-2007 20:46:17

RI, CHINA FOSTERING CLOSER ECONOMIC TIES

By Andi Abdussalam
Jakarta, June 8 (ANTARA) - Indonesia and economic giant China are forging closer economic ties with Beijing moving to realize various investment projects worth a total of US$800 million in Indonesia.

        The realization of the economic cooperation between the two countries which has been running well got an impetus when Indonesian Vice President Jusuf Kalla made a six-day visit to China from June 6 to 11.

        "The vice president's visit to China is expected to increase the two countries' economic cooperation," chief of the Indonesian embassy's economic section in Beijing Andriana Supandy said.

        Kalla's agenda included talks with executives of Chinese state-owned companies which had investment project schemes in Indonesia such as Sino-Hydro and China National Offshore Oil Corporation (CNOOC).

        "China has a lot of opportunities to increase its investment in Indonesia as both nations' economic relations are now increasing," the vice president said at a meeting with Chinese Communist Party Secretary General for Unnan province, Bai Enpei.

        Indonesian Public Works Minister Djoko Kirmanto who accompanied the vice president during his tour of China hoped that the meeting between Kalla and Chinese business officials would expedite the implementation of various Chinese-funded projects in Indonesia.

        Indonesia and Sino-Hydro, for example, signed a work contract on April 30, 2007, for the construction of the Jatigede dam project in West Java. Work on the dam is expected to be begin on June 30, 2007.

        China has made a loan commitment worth US$800 million for different projects in Indonesia, of which US$250 million are designed for construction of the Jatigede dam in Cirebon, West Java.

        The rest of the loan would be used for double-track railway projects, thermal power plants and road construction.

        Minister Djoko Kirmanto hoped that the meeting between the vice president and Sino-Hydro executives would expedite the realization of the Jatigede dam project.

        With the Chinese financial assistance, construction of the Jatigede dam was expected to proceed smoothly in order to contain rain water for irrigation or for generating electricity.

        He said Cirebon district and its surrounding areas were often hit by floods during the rainy season and scarcity of water during the dry spells. That's why, he added, it needed a dam to contain water when rain falls.

        The minister said the design and blueprint of the dam had been made while construction which be started after the Chinese funs had been isursed.

        The other sector of cooperation included investment in railway projects.

        The vice president held a meeting with China Railway Engineering Corporation (CREC) to discuss the company's plan to build a 517-kilometer-long railway track in Central Kalimantan province, she said.

        A memorandum of understanding (MoU) on the project was signed recently by Central Kalimantan Governor Teras Narang and CREC's management while Vice President Jusuf Kalla was slated to talk about the financial scheme for the purpose.

        In the energy sector, the vice president had a meeting with China National Offshore Oil Corporation (CNOOC) to discuss a plan to ship LNG (liquefied natural gas) amounting to 2.6 million metric tons from Papua Province (Indonesia) to Fujian Province (China).

        The LNG supply cooperation would last for 25 years starting in 2009 as demand for LNG in Fujian kept on increasing.

        During his visit, the vice president and Chinese officials also discussed the establishment of a 10,000-megawatt power plant as many Chinese companies had won tenders in the project.

        In terms of investment, China is now the fifth biggest investor country in Indonesia with an investment worth US$7.4 billion.

        Chinese investment in Indonesia, excluding those in the gas and oil sectors, reached US$170 million (38 projects) in 2003, and it rose to US$205 million (80 projects) in 2005.

        Indonesia's investment in China was recorded at US$100.8 million with 115 projects in 2006.

        The vice president also focused his attention on increasing trade between the two nations.

        Kalla said the aim of his meeting with executives of Chinese companies was to increase the trade volume and investment of both countries.

        According to the chairman of the Indonesian Commerce and Industry (Kadin), MS Hidayat, the vice president's visit was part of Indonesia's efforts to achieve the target of US$30 billion two-trade between Jakarta and Beijing launched by Indonesian President Susilo Bambang Yudhoyono and his Chinese counterpart, Hu Jinato, in April 2005 in Jakarta.

        The trade target was inseparable from the frame of strategic cooperation which basically calls for the two countries to expand cooperation in all fields, he said.

        Two-way trade between Indonesia and China tripled to US$19.06 billion in 2006 from US$6.7 billion in 2001. (A014/A/HAJM/20:50)

        (T.A014/A/A014/H-AJM) 08-06-2007 21:18:29

RI, NZ FOSTERING CLOSER TIES

By Andi Abdussalam

Jakarta, May 8 (ANTARA) - Indonesia and New Zealand are moving closer to mending their ties one year after the latter resumed its military cooperation with Jakarta which Wellington had severed over alleged gross human rights violations before, during and after the referendum for independence in Timor Leste in 1999.

        In order to increase their bilateral ties, Jakarta hosted an Indonesia-New Zealand Joint Ministerial Commission forum on Tuesday to discuss issues of mutual concern, among others in police work, immigration, education, counter-terrorism and interfaith dialogs.

        Besides by senior officials of both nations, the joint commission forum was also attended by Indonesian Foreign Minister Hassan Wirajuda and his New Zealand Counterpart Winston Raymond Peters.

        "The joint ministerial forum was preceded by a senior officials' meeting which was held on Monday, May 7, 2007," Foreign Minister Hassan Wirajuda said on Tuesday.

        To enable broader perspective of discussion, the Joint Ministerial Commission forum included relevant agencies of both nations so that this time the forum was more solid in developing bilateral relations and cooperation between Indonesia and New Zealand, the minister said.

        The Indonesia-Zealand Joint Ministerial Commission was set up as a follow up to the visit of Indonesian President Susilo Bambang Yudhoyono to New Zealand some time ago.

        As democratic countries, Indonesia and New Zealand have strong basic relations to advance their bilateral ties and to strengthen peace, security and prosperity at regional and international levels, he said.

        Besides as a result of President Yudhoyono's visit to New Zealand, strong foundations for cooperation between the two countries had also been laid thanks to the meetings between Yudhoyono and New Zealand's Prime Minister Helen Clark in various forums such as the ASEAN Dialogue Partners' meeting, APEC forum and East Asia Summit, Wirajuda said.

        He said that New Zealand was a dialogue partner of ASEAN and Indonesia was also a dialogue partner of the Pacific Island Forum where New Zealand was an important member.

        "And the two countries were participants of the APEC and the East Asia summits which had been held two times, and this matter had further strengthened the bilateral relations," the foreign minister said.

        In the meantime, New Zealand Foreign Minister Winston Peters said his country was one of the countries which supported and kept abreast of reform developments in Indonesia.

        Therefore, progress and prosperity in Indonesia and in New Zealand were important for regional stability, he said.

        During the forum, Indonesia and New Zealand agreed to step up regional cooperation in various fields such as immigration, counter-terrorism and interfaith dialogues.

        "The process of the interfaith dialogues which was initiated by Indonesia and was begun with the first regional meeting in Yogyakarta on December 7, 2004, has been going on well," Wirayuda said.

        He said the interfaith forum was followed up with the second meeting in Cebu, the Philippines, on March 14-16, 2006 and the third meeting would be held in New Zealand on May 29 - 30, 2007.

        "In my capacity as foreign minister, I will attend the meeting," wirajuda said.

        He said the interfaith dialogues had also given birth to the Muslim Youth Leaders' Exchange Program and exchanges of academicians.

        Indonesia also hailed New Zealand's initiative to hold an Allianze for Civilization forum which was an international cooperation in promoting mutual understanding among civilizations which would be hosted by New Zealand on May 25-27, 2007.

        "Mr Ali Alatas (former Indonesian foreign minister) will attend the meeting," Wirajuda said.

        Apart from the interfaith dialogue, Indonesia and New Zealand would also improve cooperation in the defense and police fields.

        "The two nations also agreed to draft a memorandum of understanding (MoU) Concerning Cooperation on Migration and Border Control Management, which is expected to overcome illegal immigrant problems," the minister said.

        Indonesia hoped that New Zealand would consider issuing seasonal work permits and working holiday schemes for Indonesians.

        The joint commission also recommended the drafting of an MoU on anti-corruption and anti-money laundering efforts in the framework of enforcing the laws in the two countries.

        The forum also discussed economic cooperation, particularly in the trade sector. The trade volume of the two nations which reached 1.3 billion New Zealand dollars continued to increase every year.

        New Zealand also planned to increase its development assistance to Indonesia to 13 million New Zealand dollars in the 2007-2008 period.

        Wellington restored military cooperation with Indonesia last year by inviting Indonesia to join a military training in the New Zealand Defense Force's Staff and Command Academy, a move welcomed by Jakarta. (A014/A/HAJM/b005) 2. 21:10/23:00 (T.A014/A/A014/B005) 08-05-2007 23:02:00