MINISTER BLAMES RAILWAY FIRM FOR TRAIN ACCIDENT

By Andi Abdussalam

Jakarta, Oct 4 (ANTARA) - Transportation Minister Freddy Numberi said on Monday that state-owned railway company PT Kereta Api Indonesia (KAI), as a train operator in the country, was responsible for the train collision that  killed at least 34 people and injured 43 others in Pemalang, Central Java on Saturday.          "The Ministry of Transportation is not responsible for the accident . PT KAI is the operator while the ministry only serves as a regulator.  So, the collision between  Senja Utama and Agro Bromo Anggrek trains in Pemalang, Central Java, is purely the responsibility of PT KAI," the minister said.          Therefore the minister will leave the matter to the investigators and wait for the results before his ministry and the ministry of state enterprises --which overseas PT KAI-- discuss the  sanctions that might be imposed on those responsible in PT KAI.          "In essence we are waiting for the results of the investigation of the National Transportation Safety Committee (KNKT), police and other relevant parties and there will be sanctions," the minister said.

GOVT STILL PLANNING TO RAISE POWER RATES

By Andi Abdussalam

Jakarta, Sept 30 (ANTARA) - The House of Representatives (DPR)'s Commission VII on energy affairs  hoped that the government, based on an agreement reached in hearing recently, would not cancel its plan to increase the basic power rates by an average of 15 percent in January next year .          However, the government is of the view that the agreement has not yet become a decision of the House because it was made at the House's commission level.  So, the decision is not yet final and that a chance for the government to raise the basic power tariffs (TDL) is still open.          The government has planned to increase the TDL in an effort to solve the problem of subsidized electricity.  "We have thought since the beginning how to solve the electricity subsidy problem. If the tariffs are not increased there must be alternatives," Finance Minister Agus Martowardojo said on Wednesday.          However, the House Commission said that the problem could be solved through an efficiency drive. Thus, the commission asked the government to support the efficiency drive of state-owned power firm PLN so that it would not need to raise its power rates in 2011.          "The success of PLN in avoiding a power rate tariff increase will depend on its efficiency," Chairman of House's Commission VII on energy affairs Teuku Riefky Harsya said. He said that the decision taken by the government and Commission VII not to raise the basic power rates would depend on how far PLN carried out its efficiency programs.          The House and the government during a hearing with Commission VII last week agreed not to raise the electricity tariffs in 2011, though it has planned to raise the TDL by an average of 15 percent next January.  For that, PLN was asked to save Rp8.1 trillion on switching the use of fuels to gas, coal and other alternative energies.          According to a senior energy government official, PLN will get a gas supply amounting to 100 million metric standard cubic feet per day (mmscfd) for its power plants in 2011.           "The additional gas supply would be obtained from three locations, namely the Jabung field amounting to 30 mmscfd, Singa field 30 mmscfd and Jambi's Merang field with a volume of 40 mmscfd," Renewable Energy and Energy Conservation Director General Luluk Umiarso said at a hearing with the House Commission VII on energy affairs recently.           Luluk said that with the additional gas supply PLN could reduce its fuel oil consumption. "PLN would be able to save on Rp2.53 trillion with the additional gas supply," he added.          Commission VII chairman Teuku Riefky Harsya said that the government should carry out the decision not to raise the power rates, and that the gas supply to PLN should be supported.           "We appreciate the PLN commitment and that the government should support the allocation of gas to PLN," Riefky said. He said that the decision taken by the government and the House might not be changed, even if  at the deliberation of the House's Budgetary Agency.          "We hope all sides would carry out this decision because the government and the House were not willing to put further burden on the people," he said.          Meanwhile,  Chief Economic Minister Hatta Rajasa said the decision to cancel the planned basic power rate increase was still a decision of a House commission. It has not yet become a decision of the  House. "I received a report from the minister of energy and mineral resources that the decision was taken at the commission level of the House," the coordinating minister for economic affairs said.          He said that the matter would still be taken for deliberation to the Budgetary Body of the House. It still has to be waited what it would decide about it.          Hatta said that the decision to cancel the planned electricity tariff increase would become a House decision if it had been deliberated by the House plenary on the 2011 state budget. The government through the submission of the 2011 draft state budget, has earlier planned to raise the electricity tariff by an average of 15 percent.          The chief economic minister said that he had held talks with PLN over the possibility of the cancellation of the plan. "We talked to PLN about the cost that could be saved if efficiency is carried out by the state electricity company," he said. If the tariff is not raised it would increase the amount subsidy.          "If subsidy is not reduced while the power rates were not cut either, it then would require PLN to lower its basic production cost," he said. Reduction of production cost could be carried out through reducing the use of fuel oils.          The government's insistence to raise the power rates was allegedly influenced by an external intervention, but it quickly denied the allegation. Finance Minister Agus Martowardojo said the government was not influenced by external intervention in its plan to raise the basic electricity tariffs (TDL).          "It was said we want to increase the TDL rates because there is a multilateral agency which asks us to do so. This is not true but we want to expand our fiscal network without being regardless of the people who are in a difficult economic condition," the finance minister said here on Wednesday night.          He said that the government had since the beginning sought for a solutions to the electricity subsidy with looking into various proposed alternatives, including raising the TDL rates.          "We have thought since the beginning how to solve the electricity subsidy problem. If the tariffs are not increased there must be alternatives," the finance minister said.          Earlier, World Bank senior economist for Indonesia Enrique Blanco Armas said that Indonesia was the second country to sell electricity at the lowest price, namely about 7 US dollar cents per Kwh, or lower than that of India which was 6 US dollar cents.          Enrique Blance Armas was quoted as saying that the power rates for household consumers and industry in Indonesia were relatively low.          The World Bank economist said that the government decision to increase the electricity rates by an average of 15 percent last July was a small step towards its goal of fixing the energy subsidy target.          Enrique hoped that the government would therefore increase the power rates in stages so that the subsidy which had been provided so far could be switched to the infrastructure budget.***2*** (T.A014/H-NG/f001  ) 30-09-2010 11:04:

PEOPLE ASKED TO HELP END TARAKAN CLASHES

By Andi Abdussalam

Jakarta, Sept 29 (ANTARA) - The government has called on the people, including security officers, religious leaders, tribal community chiefs, government officials and the media to help calm down emotions and settle the communal clashes that have caused the death of at least five locals in Tarakan city, East Kalimantan.          "I am saddened by  the occurrence of the community violence in East Kalimantan. I have received a report from the police chief and communicated with the Indonesian Defense Forces (TNI) commander and with the East Kalimantan governor," President Susilo Bambang Yudhoyono said on Wednesday.          The president therefore asked that the handling of the case should be carried out seriously to prevent a repetition of the incident that occurred in Sampit, Central Kalimantan, ten years ago, where Dayak natives and ethnic Madurese were involved in a conflict that claimed many lives.          "I hope it will not happen again. The efforts made to handle the incident should be concerted, officers should make concrete efforts by getting down into the field," the president said.          The president asked for concerted efforts by the central government, local government, the TNI and Police. He called on the local communities which were involved in the brawls to restrain. Apart from that the president also asked the media to help the government in settling the conflict by providing balanced reports and avoiding reports that could incite widespread escalations.          Five people were reportedly killed in clashes between two groups of Tarakan (East Kalimantan) residents that began last Sunday night and continued until Wednesday morning.  "Four were killed in the brawls that have been going on from last Sunday until early this Wednesday. So the  death toll of the incident since it broke out on Sunday night has reached five," a police officer who refused to be named said here on Wednesday.           According to several residents, the brawls had quickly spread to other parts of the city.  On Tuesday morning, the clashes occurred in certain  areas in Tarakan city. "At the beginning, the clash took place in a suburb, namely on Jalan Gajah Mada and Jalan Yos Sudarso. But this morning the fighting had spread to Selimut Dalam, closer the city center," Nanda, a resident of  the Selimut Dalam area, said.          One of the rival groups has since Tuesday morning also blocked access to the airport and Juwata seaport.          East Kalimantan Governor Awang Faroek Ishak said the community clashes in Tarakan City were not related to rivals between two certain ethnic groups.  "The residents' clashes were not related to conflict between certain ethnic groups. This is a pure crime," Governor Awang Faroek Ishak said at Samarinda airport when he was to fly to Tarakan Wednesday afternoon.          He was flying to Tarakan together with the chief of Resort Military Command 0901, Aji Suranata Kesuma. "Together with the Resort Military Command 0901 chief and the East Kalimantan Police chief, I will coordinate with the Tarakan local government officials, religious leaders, tribal chiefs and other community figures to prevent the clashes from escalating," the governor said.          The governor said that the community conflict in Tarakan must be settled soon so that the people would return to their daily activities. "I hope this problem would be solved as soon as possible so that the people would regain their normal life and the economy which happened to be disturbed could be revived," he said.          The governor said that he also hoped leaders of the two rival groups would restrain and leave the matter to police. After all, police have held actors in this case so that there was no need to continue the conflict.          Awang also admitted that security officers had taken control of the situation in the Tarakan City. "Security officers, both from police and the military, have taken control of the situation and localized or isolated the two rival groups in two separate locations, one in the Selimut area and the other in Simpang Empat zone," he said.          In the meantime, the National Police Headquarters under the deputy to the police chief for operational affairs (Deops) Insp. Gen. Soenarko, is directly supervising military operations to control the situation in the conflict areas.          "Insp. Gen. Soenarko flew directly to Tarakan today to control the operations in the field," Police Deputy Spokesman Brig. Gen. I Ketut Untung Yoga Ana said.  Soenarko flew with the chairman of the South Sulawesi Family Association (IKSS) to Tarakan in an effort to coordinate efforts to control  situation there,"  he said.          Yoga said that the clashes should be stopped or calmed down because otherwise it would escalate. "The departure (of Soenarko to Tarakan) is to prevent possible further incident ahead and (to collect facts) he would report to the Police chief and the president," he said.           Home Affairs Minister Gamawan Fauzi had earlier reported to President Susilo Bambang Yudhoyono over the latest developments of the communal clashes.          The home affairs told reporters before he met with the president on Wednesday that his ministry had sent its Conflict Management director to Tarakan. "I am concerned over the incident. I have called three times the East Kalimantan governor on the phone asking him to make serious efforts," the home minister said.          He said that the condition in Tarakan had actually returned to normal on Tuesday noon but it worsened again and the incident was repeated Tuesday night.          "We were there yesterday when the situation was already calm but it turned out that in some locations which were difficult to control, potential incidents still existed," he said.***1*** (T.A014/A/HAJM/17:58/a014) 29-09-2010 18:04:3

BUSINESSES WANT BETTER INFRASTRUCTURAL FACILITIES

By Andi Abdussalam

Jakarta, Sept. 28 (ANTARA) - Businesses urge the government to focus on the development of infrastructure such as roads, seaports, airports, electricity and other facilities that support the activities of domestic industries so that they would improve the competitive edge of the country's products and boost economic growth.          "Last year we were the biggest low calorie coal exporter, had the largest agricultural land and highest volume of crude palm oil (CPO) production. These are assets for us to build sustainable economic growth. However,  this all would have weak contribution to the economic growth if they were not supported by enough infrastructural facilities such as roads,  electricity, seaports and airports," Vice President of PT Indika Energy Wishnu Wardana said here on Tuesday.          So far, businesses considered that the development of infrastructure in the country has not yet been done maximally. Thus, the competitive edge of the country's products could not yet be improved.          "There is no significant improvement in industrial competitiveness because the government fails to focus on infrastructure. The government can only meet 30 percent of the economic budget and the rest is for the business sector, but it should be supported by infrastructure and the budget should be focused on infrastructure," Andi Putra of the Indonesian Chamber of Commerce and Industry (Kadin) said  recently.          According to Andi, the government should start to focus 2011 budget on infrastructure development in agriculture sector in an effort to step up domestic industrial competitiveness.      "It is for agriculture infrastructure in wider sense. If the infrastructure for production and industrial products derivation in this sector is good, we will certainly be more competitive," he said.          Meanwhile Kadin deputy chairman for  fiscal policy and monetary Haryadi Sukamdani said that in making the policy the government should also consider the capability in business and industrial sector to maintain competitive power.          "Do not make a policy which systematically weaken the competitive power by raising basic electricity rate tariff and plans to raise it again next year," Haryadi said.  He said it's better for the government to improve energy policy so that industrial and business players were not burdened by high energy cost.         Indonesian Young Businessmen Association (Hipmi) chairman Erwin Aksa said meawhile that domestic business players so far were less competitive with overseas producers because infrastructure had yet to be well developed and the government policy did not support business and industrial activity.          "Industrial development is also slow and only grows by four to five percent per year while in reality it could reach 11 percent in 1998," he said.          President Susilo Bambang Yudhoyono said last month that the government would focus on the development of infrastructure in 2011. "We are going to focus the budget on the development of good quality infrastructure facilities in our effort to improve the pace of economic development," President Susilo Bambang Yudhoyono said in his statement on 2011 draft State Budget (APBN) last month.          The president said the funds would be used among other for construction of 4,551-meter flyovers and underpasses, and  bridges of a total length of 2,119 meters.          "We will also use the funds to preserve 355,961 kilometers of roads, 212 roads, and 212.36 kilometers of bridges in addition to stepping up the capacity of 2,613 kilometers of roads," the president said.          For infrastructure development next year, the government will increase its budget from Rp108 trillion to RP126 trillion.          According to Vice Minister for Financial Affairs Anny Ratnawati the budget for infrastructure in 2011 would increase Rp18 trillion to Rp126 trillion from Rp108 trillion in 2010.          "Investment in the infrastructural sector would be carried out through a government-private sector partnership program. In 2010, the budget for it is set at Rp108 trillion, and it will increase to Rp126 trillion in 2011," the vice minister said on Tuesday.          She said that the budget in the infrastructural sector should be managed as well as possible so that Indonesia's competitiveness could be increased. The increase in the infrastructure funds was expected to boost economic growth because the country's competitive edge would also be raised.          Businesses hailed the increase in the infrastructure budget, as what was said by Vice President of PT Indika Energy, Wishnu Wardana.          "The government cannot do it alone. It needs the private sector's role. But we need legal certainties which at present are being questioned by many quarters," he said.          After all, the government is only able to finance about 30 percent of the needed infrastructure development which reach about Rp280 trillion per year.  According to Finance Minister Agus Martowardojo, investment in the infrastructural sector in the 2010- 2014 period is estimated at Rp1,400 trillion, of which the government is only able to finance 30 percent.          In order to accelerate the development of infrastructure in the country,  the government will begin auctioning the 2011 infrastructure projects next November so that the disbursement of the budget could be realized earlier.          "Our target is that the auction  for infrastructure projects in 2011 would have begun in November this year and contracts would have been concluded in January 2011," director general for road construction of the Public Works Ministry, Djoko Murjanto said.           He said that accelerating the auction of the 2011 infrastructure projects and the finalization of the work contracts was to speed up the project realization and budget absorption so that it would not accumulate at year end.***2*** (T.A014/A/HAJM/22:34/H-YH) 28-09-2010 22:38:3

RI TO HAVE 180 SUKHOIS, 50 KFX WAR PLANES

By Andi Abdussalam

Jakarta, Sept 27 (ANTARA) - Despite its limited military budget, Indonesia is planning to  reinforce its Air Force in stages and in the coming 15 years, it will have a new generation of 50 war planes from South Korea in addition to ten squadrons of 180 Russian-made Sukhoi jet fighters.          "In 2020, Indonesia will have a new generation of warplanes  which will be produced under a cooperation scheme with South Korea,"  Defense Minister Purnomo Yusgiantoro said on Monday.          Under the cooperation scheme with South Korea, Indonesia will get a total of 50 war planes designed by South Korea with a fighting capability not second to that of F16 jet fighter planes.       He said Indonesia and South Korea had signed a memorandum of understanding about the cooperation in Seoul, South Korea, on July 15, 2010.  Under the cooperation, Indonesia will be involved in the production of Korean Fighter Experimental (KFX) war planes, a fighter jet designed by South Korea.          According to Secretary General of the Ministry of Defense and Security Vice Marshal Erris Herryanto,  in carrying out the cooperation Indonesia would do its best so that the KFX planes would be produced in Indonesia, particularly by the Indonesian aircraft industry PT Dirgantara Indonesia (DI).          "We hope that the war planes will be made here in Indonesia. We will discuss this matter with South Korea," he said.           He said that in the contract of cooperation between South Korea and Indonesia, five prototypes of the planes were expected to be made together.           One of the five prototypes will be made in Indonesia and four others in South Korea.           After the conclusion of the working contract, there will be a phase of war plane production to be made at home. "There will be a phase in which the war planes will be produced at home after the work contract is concluded," he said.           In the agreement which was signed between the commissioner of South Korea's Ministry of Defense and the Secretary General of the Indonesian Defense Ministry Vice Marshal Erris Herryanto, Indonesia will bear 20 percent of the cost and will get 50 war planes which have a fighting capability exceeding that of F-16s.          In the meantime, by 2024, Indonesia also hopes to have ten squadrons of 180 Sukhoi jet fighters to guard the country.  "To defend our country's sovereignty, we have set a target to have 180 Sukhoi jet fighters by developing 10 squadrons," Minister Purnomo, who was accompanied Chief of the Air Force Marshall Imam Sufaat,  said in Makassar Monday.          Each squadron will have 18 Sukhois, he said. The defense ministry in its strategic working plan has also to buy F-16 Fighting Falcons to replace Australia-made Hawks.          Russia has expressed its readiness to supply as many Sukhois as Indonesia needs. "With the improving national economic condition, it will help the government in acquiring weapons to strengthen the national defense," he said.          Now Indonesia already has ten Sukhoi war planes.  In 2003, Indonesia purchased two Sukhois of the SU-30 MK type and two of the SU-27SK type.  Later, the Defense Ministry bought six more Sukhois in 2007 worth US$300 million, or Rp2.85 trillion.          The six purchased Sukhois consisted of three SU-30MK2s and three SU-30SKM. Three SU-30MK2s arrived in Makassar in 2008 and 2009. The other three arrived this month (Sept. 2010) and were officially handed over to the defense minister on Monday (Sept 27, 2010).           The purchase of the six Russian made Sukhois has been planned based on the Air Force's Fleet Development Program for 2005-2009.  In the 2005 budget year, funds totalling US$310 million were allocated for the procurement of six Sukhois.          The Russian Sukhoi producing company on August 21, 2007, announced the sale of the six jet fighters to Indonesia worth US$300 million.  The procurement was to be conducted in stages in the  2007-2009 period.  However three others were realized in 2010.          The plan to reinforce the Air Force is being made amid a tight military budget.  Therefore, the government is urged to increase the amount of military budget. After all, many military equipment needs maintenance.          The shrinking military budget is being taken while about 70 percent of the country's military armaments are aging and the Indonesian Defense Forces (TNI) is putting to rest a number of its obsolete main armaments, including planes, ships and helicopters aged more than 30 years.           It is predicted that in the coming ten years the maintenance of TNI's armaments would cost Rp93.87 trillion (US$10.203 billion), of which Rp41.9 trillion (US$4.5 billion) for the air force's armaments.          So far, the government has provided only one third of the needed budget to maintain and preserve the military equipment.          According to the House of Representatives, the ideal budget for the military is about Rp100 trillion.          However the government last for example was only able to provide one third of it, or about Rp33 trillion.  In the coming budget, the government has allocated Rp45.2 trillion.          According to Fayakhun Andriadi, a member of the House of Representatives (DPR)'s Commission I on defense affairs,  the government has to find a quick solution to the National Defense Forces (TNI)'s problem of inadequate military hardware and needs to improve servicemen's welfare.           He said that the solution lays in implementing a Minimum Essential Force (MEF) buildup program or providing the TNI with minimum standard defense hardware and improving soldiers' welfare.           As regards, Golkar Party Chairman Aburizal Bakrie ordered the Gokar faction (FPG) in the House of Representatives (DPR) to fight for increase in defense budget.          "If we talk about state's security we cannot take it lightly. We should not be hampered by shortage of funds," the Golkar chairman told a press conference here on Monday. He said that Indonesia should not be weakened by shortage of funds so that it should raise its defense budget.          "In term of defending sovereignty we should not be weak. I ask the Golkar faction in the House to fight for increased budget based on the need," he said.  He did not mention how much increased budget was needed for the defense system.          In his address on the 2011 draft state budget and financial notes at the House Plenary session last August, President Susilo Bambang Yudhoyono said that the Defense Ministry got a budget allocation of Rp45.2 trillion.          Aburizal Bakari said that a budget of that amount for maintaining the country's sovereignty was too small. ***1*** (T.A014/A/HAJM/20:39/a014)  27-09-2010 21:00:

EXPORTS WEAKENED AS RUPIAH APPRECIATING

By Andi Abdussalam

Jakarta, Sept 22 (ANTARA) -  The rupiah's appreciation since last week  strengthening to below Rp8,950 against the green-back at the Jakarta interbank spot market on Wednesday evening has caused  concern among exporters .          Head of the Financial Division of PT Bank OCBC NISP, Suriyanto Chang said on Wednesday that the rupiah continued to appreciate and edge closer to a level below Rp8,950 per US dollar. He said the appreciation worried exporters because it could cause a problem for their products in the export market.          On Wednesday, the rupiah in the Jakarta interbank spot market traded at a range of Rp8,960-Rp8,970 against the US dollar but at the closing in the evening it strengthened further and rose to a level below Rp8,850 over active rupiah buy-ups.          Suriyanto Chang said that the rupiah inclined to appreciating due to strong incoming flow of foreign funds into the domestic market.          The rupiah on Wednesday evening rose 17 points to Rp8,943-Rp9,953 per US dollars compared to the previous day's closing at Rp8,960-Rp8,970.          Retail Banking Director of PT Bank Mega Kostaman Thayib said meanwhile that market players continued to purchase the rupiah so that it continue to appreciate and reached a level below the Rp8,950 per US dollar.          Seeing the strengthening trend of  the rupiah against the green-back,  financial market analyst Irfan Kurniawan predicted that the rupiah value would continue to remain at a stable range of Rp8,950-Rp9,000 until the year-end.          "The rupiah value at the Rp8,950 - Rp9,000 is an ideal one because it would still enable both exporters and importers to carry out their activities well, though exports at present are showing a downward trend," Irfan said on Wednesday.           Irfan who is also financial analyst of PT First Asia Capital said the value of rupiah at Rp8,945-Rp8,955 range was not too far from the Rp9,000 range. That is why the government still lets the rupiah  fluctuate within that range.          He said that the government actually wanted the rupiah value to be above the Rp9,000 level but due to the decline of its exports it let the rupiah stay below the Rp9,000 level. The present level of rupiah value only had a thin margin with the Rp9,000 level  and it did not pose too much problem to the export activities.          Exporters still could carry out their activities even if the rupiah is below Rp9,000 per US dollar. Exporters would complain and ask the government to stop the strengthening of the country's currency if it reached the Rp8,700 - Rp8,800 level.          Irfan said a value of  rupiah at that level would reduce exporters' profit as it would reduce their competitiveness in the world market.          Last week, when the rupiah appreciated and almost reached Rp8,800 per US dollar the government was forced to consult Bank Indonesia (BI/the central bank) to overcome the rupiah appreciation. The government even asked BI to maintain the rupiah value at the Rp9,000 level.          But the strong inflow of foreign capital to the domestic market posed difficulties to the central bank to carry  out an intervention to off set the rupiah and rekindle its value back to the Rp9,000 level.          "We predict that the rupiah would remain below the Rp9,000 level until the end of the year," Irfan said.         The rupiah began to show an upward trend when it edged closer to Rp8,950 per dollar at the Jakarta interbank spot market late Tuesday on active rupiah buy-ups last week.          The rupiah traded at Rp8,955-Rp8,965 per dollar compared to Rp8,995-Rp9,005 per dollar earlier at the weekend, up 40 points.          Finan Corpindo Nusa President Director Edwin Sinaga said a number of internal and external positive sentiments had raised demand for the rupiah, causing the Indonesian currency to strengthen significantly against the greenback.          One of the positive sentiments was the fact that Indonesia's global competitiveness rating rose by 10 notches to 44th among 132 countries surveyed, he said.          He said the rupiah was expected to further strengthen to a level of Rp8,900 per dollar due to the strong positive sentiments.          "We are optimistic if Bank Indonesia (BI) does not intervene in the market the rupiah will edge closer to a level of Rp8,900 per dollar," he said last week. He said the rupiah still had a great chance to further appreciate particularly because of the strengthening of Wall Street, fueled by the dollar's weakening against euro and yen.          In response to the appreciation,  BI Governor Darmin Nasution said that the present rupiah exchange rate was still competitive for the national economy compared to  those of  the currencies of neighboring countries.          "The argument that our competitiveness has declined because of the rupiah's appreciation is not valid  because the currencies of other countries have appreciated even more," he said.          He said until Friday last week the exchange rate of the rupiah was Rp8,980 against the US dollar while its yearly average is still at Rp9,130 or it has only appreciated by 4.8 percent since early this year.          "That is the same as that of Philippine Peso but is smaller than Thai Baht which is 7 percent and Malaysian ringgit 8 percent," he said.           Darmin admitted BI had bought US dollars to make the rupiah remain stable and its volatility not to big. The view of some ministers that the rupiah was no longer competitive for trade was not correct because the rupiah was not alone.          Regarding the assumption for the rupiah exchange rate in the 2011 draft budget which is set at Rp9,300 per US dollar Darmin said that  the government did not wish to weaken the rupiah but based upon the results of calculation made along with BI, the high inflation next year could lower the value of the rupiah.          "The fact is if the capital from abroad keeps flowing in certainly the rupiah will not be able to stand at that level (Rp9,300 against the US dollar)," he said.          The huge flow of foreign capital into Indonesia coupled by the depreciation of the US dollar against other currencies recently have made the rupiah value to appreciate to Rp8,900.           Several ministers however felt that the appreciation was too high and therefore could disrupt domestic industrial exports. ***2*** (T.A014/A/HAJM/19:37/a014) 22-09-2010 19:44:0

BANK CENTURY CASE SHOULD NOT BE SOLVED PARTIALLY

By Andi Abdussalam

Jakarta, Sept 21 (ANTARA) - After several months not heard of, the Bank Century case was raised once again by at least two lawmakers on Tuesday where law enforcers were urged to summon officials involved and solve the problem comprehensively.          The lawmakers raised the issue again after President Susilo Bambang Yudhoyono on Monday ordered government officials to make efforts to recover the assets of the bank. However legislators said that the recovery of Bank Century assets was not a priority in solving the problem but its legal case.          "The asset recovery is the fourth point in the recommendation of the House Special Committee on Century," Deputy Chairman of the House Special Committee on Century Mahfud Siddiq said here on Tuesday.          He said that the settlement of the legal aspect of Bank Century case should become a priority.          "The people are waiting for the settlement of the legal case of the bank, not its asset recovery as said by President Susilo Bambang Yudhoyono," Mahfud who is also secretary general of the Prosperous Justice Party (PKS), said.           He said that the bank's assets which were stashed abroad by Robert Tantular (century's owner) had been scheduled to be recovered in two years. Mahfud is of the opinion that Yudhoyono's statement which asked for intensive efforts to return the bank's assets was an effort to cover up the legal case of Bank Century.          "One should not exaggerate the asset recovery problems that could cause the legal process of the bank to sink into oblivion," he said.          The same voice was also aired by legislator Bambang Soesatyo of the Golkar Party. While he appreciated President Susilo Bambang Yudhoyono's statement which ordered the recovery of Bank Century's assets stashed abroad, Bambang Soesatyo hoped that the problem of Bank Century should be solved once for all.          "The settlement of the Bank Century case had better be made comprehensively," Bambang Soesatyo, member of the House of Representatives (DPR)'s Monitoring Team on the Century Case, said.          He said that the case must be settled comprehensively so that his team asked the Indonesian Police to investigate all former officials involved in the case.          Bambang Soesatyo mentioned the names of former Bank Indonesia (BI/the central bank)'s governor and the former finance minister among the officials who must be summoned and examined over the alleged banking crime and money laundering with regard to the Bank Century mega scandal.          "If we are serious about settling the problem it should not be tackled partially but comprehensively and firmly," Soesatyo said. This means that there should be no reluctance to do so because it involves a big case with huge funds amounting to trillions of funds.          "That's why all law enforcing agencies should have the courage to carry out the people's mandate in creating a democratic life which is truly respectable, civilized and smart," he said.          He said that the move by the president to order the recovery of the bank's assets overseas should be coupled with the settlement of other aspects which were more crucial for upholding justice in the country.           On Monday, President Susilo Bambang Yudhoyono said the government would make more effective efforts to regain the assets of the former Bank Century. He said the government would take two-way efforts to deal with the Century Bank case namely improving the performance of the bank which has been renamed Bank Mutiara and making the efforts to return  Bank Century's assets more effectively.          "We will do it simultaneously. On the one hand we will make Bank Mutiara thrive and on the other we will regain the Century Bank assets more effectively," he said at his office in connection with the problem.           He made the statement after receiving a report about the progress in the efforts to regain the assets of the Century Bank taken away by those involved in the case.          "I think efforts must be intensified. Integrated and joint efforts to regain the Bank Century assets abroad should be taken with a hope the results would be parallel with the court's ruling," he said.          President Yudhoyono said although Bank Mutiara had recorded  good growth that was not sufficient yet and therefore the two way efforts were still needed.          The chairman of the board of commissioners of the Deposit Insurance Agency (LPS), Rudjito, said that some local and foreign investors had expressed their interest to buy  Bank Mutiara.           He said the condition of the bank is improving with its total assets reaching Rp8 trillion up from minus Rp7 trillion at the takeover.          Bank  Mutiara, formerly Bank Century, was the only bank bailed out by the LPS at the time of crisis in 2008.          In late 2008,  Bank Century during the crisis faced  liquidity and default problems. It collapsed after its liquidity assets amounting to about Rp11.6 trillion were withdrawn, through its security firm Antaboga Delta Sekuritas, and stashed abroad by its owner Robert Tantular.          The ailing bank was than taken over by the Deposit Insurance Agency (LPS). The government later provided it with a bailout of Rp6.7 trillion through the issuance of  a Short-Term Funding Facility (FPJP) and  Temporary Capital Participation (PMS).          The amount provided was far higher than the Rp1.3 trillion then discussed with the House of Representatives (DPR).  Thus, the bailout sparked public criticism and questions as it was disbursed without approval of the House of Representatives (DPR).          The House of Representatives later set up an inquiry committee  to look into possible violations in the provision of the bailout.          At the end of their inquiry in at plenary session,  seven of the nine factions of the House in the committee,  mentioned that violations had been committed with regard to the issuance of the Short-Term Funding Facility (FPJP) and  Temporary Capital Participation (PMS).***1*** (T.A014/A/HAJM/22:00/H-YH) 21-09-2010 22:07:0