| By Andi Abdussalam |
Jakarta, Dec 31 (ANTARA) - The Indonesian government officially announced on Friday its optimistic target of attracting 7.7 million foreign tourists into the country in 2011, up about 10 percent from 7,000,571 arrivals in 2010. The foreign tourist arrival target was raised by about 10 percent because the world now had a good perception of Indonesia that could attract more visitors. "Indonesia has a positive aura in 2011 so that we set an optimistic target of 7.7 million foreign tourist arrivals in the country," Culture and Tourism Minister Jero Wacik said in his year-end press conference on Friday. Besides the optimistic target, the minister also set a pessimistic target of 7.3 million arrivals as a "performance contract" target of the culture and tourism ministry with the Indonesian President. The minister raised the target for 2011 because his ministry's target to attract seven million foreign tourist arrivals in 2010 was achieved. The number of foreign tourists arriving in Indonesia in 2010 was recorded at 7,000,571, or an increase by 8.5 percent compared with that in 2009 which stood at 6,452,259 arrivals. "The figure of 7,000,571 exceeds the pessimistic target of 6.75 percent which was the performance contract with the President and the optimistic target of seven million," the minister said. According to the minister, with the number of 7,00,571 foreign tourists arriving in 2010, Indonesia was able to collect a foreign exchange of US$7.6 billion. Wacik said that the foreign tourists arriving in Indonesia in 2010 spent about US$1,085.70 per visit per person. Their average length of stay was recorded at about 8.04 days. He said that the average spending of US$1,085.70 per visit per person in 2010 increased by 9 percent if compared with that in 2009 which stood at the average of US$995.93 per visit per person. The length of their stay which is about 8.04 days in 2010 also increased by 5 percent as compared with that in 2009 which was about 7.69 days. "The Central Bureau of Statistics (BPS) has recorded seven million foreign tourist arrivals or more than the target figure for 2010. More detailed information on this matter will be given in early 2011," the minister said earlier when attending a Visit Indonesia Year (VIY) 2010 appraisal night on Monday. Jero said the seven million foreign tourist arrivals constituted a new record because in 2009 the target figure was about 6.45 million. "In my contract with President Susilo Bambang Yudhoyono, I promised to attract 6.75 million tourists. But it turned out to be more than 7 million," Jero said. He also stated tourism in Indonesia during 2010 was hampered by several natural disasters like the Mt. Merapi eruptions in October to November. "I was worried when 14 airlines canceled their flights to Jakarta and Yogyakarta last November. But it did not last long because I met the managements of the airlines," Jero said. The normalization of airline flights had a salutary effect on the target's achievement which was 9.3 percent up from 6.45 million in 2009 , said the minister. The various natural disasters that have happened killing hundreds of people -- such as the flash floods in West Papua's Wasior, Mount Merapi eruptions in Central Java and the earthquake and subsequent tsunami in West Sumatra's Mentawai Islands-- had raised concern that Indonesia would not be able to reach its target of attracting seven million foreign tourists in 2010. Yet, as the year is approaching its end, tourism officials are still upbeat that despite the ordeals the country experienced this year, the target of seven million foreign tourist arrivals can be achieved if arrivals in November and December remain stable. "Indonesia has had to face heavy odds in its tourism sector this year due to the occurrence of a number of natural disasters. But we are still optimistic that the target of 7 million will be achieved," Marketing Director General of the Culture and Tourism Ministry Pasta Nirwandar said recently. According to the Central Statistics Agency (BPS), the number of tourist arrivals in Indonesia in the first nine months of 2010 rose 12.26 percent to 5.19 million from the same period last year. In September 2010 alone, 560,367 foreign tourists visited Indonesia, up 13.48 percent from the same month last year, BPS chief Rusman Heriawan said recently. But the figure represented a 4.46 percent decline compared to August 2010, he said. "The decline in the number of tourist arrivals in September was particularly caused by seasonal factors because September is a low season," he said. Yet, if the first semester of this year is compared with that of last year, there have been positive developments. The positive developments in the country's tourism are reflected in the foreign tourist arrivals in the first half of this year which have increased about 14 percent from that in the corresponding period a year earlier. With the achievements in the first semester, the country's tourism officials are upbeat that Indonesia would be able to meet or even exceed its foreign tourist arrivals target of 7 million this year. Therefore, Tourism officials are planning to raise Indonesia's foreign tourist arrivals target to 7.6 million next year. They made the plan after seeing that in the first half of 2010, a total of 3.38 million had visited Indonesia, while in fact it was a low season during this period. |
Jumat, 31 Desember 2010
GOVT EXPECTS 7.7 MILLION FOREIGN TOURISTS IN 2011
Kamis, 30 Desember 2010
YEAR END SEES DOWN-WARD PORTFOLIO INVESTMENT
| By Andi Abdussalam |
Jakarta, Dec 28 (ANTARA) - Foreign funds in the domestic portfolio investment over the last several weeks in the runup to the end of the year have been declining, yet optimism is still there where foreign funds are expected to return next year due to the country's predicted better economic condition. Although there was an increase in foreign fund investment in the second week of December, yet in the same week the investment again declined. The decline in the foreign investment in domestic market in the last several weeks was due to profit-taking by foreign investors and the increasing trend of unfavorable global economic sentiments. Ahead of the Christmas holidays and year end, Bank Indonesia (BI/the central bank) recorded the declining of foreign funds in the rupiah portfolio investment in the third week of December, as a result of profit-taking and the maturity of BI certificates (SBI). BI Spokesman Deifi A Johansyah said on Wednesday that during a week last week, there were foreign investment outflows amounting to Rp1.10 trillion. Portfolio foreign investments in the SBI and state debentures (SUN) were respectively reduced by Rp1.07 trillion and Rp290 billion. The developments cut foreign investment ceiling in the SBI to 26.95 percent of the total SBI outstanding values, which were lower than the previous ceiling of 27.48 percent. The same is also true to the foreign fund ceiling in the SUN which was reduced to 30.80 percent from the previous 30.83 percent. Apart from its reposition at the year end, the decline of foreign funds in the SBI had been taking place since the middle of October 2010 over the BI policy which obligated investors to hold the SBI at least for one month. On the other hand, foreign ownership in state securities (SBN) remained stable at 29.8 percent while that in the SBI dropped slightly from 27.5 percent to 27.0 percent. Last week, there was a new bond issuance by the banking sector which consisted of two series with a total value of Rp1.1 trillion. Thus, the corporate issuance of bonds in December was recorded at a value of Rp3.9 trillion. On a year to date basis, it has reached Rp36.8 trillion which were far higher than that in the previous year which stood at Rp28.9 trillion. At the beginning of the second week in December, BI noted that foreign investors had began placing their funds in the rupiah financial instrument worth Rp5.19 trillion after they adopted the wait and see attitude in several weeks earlier. The foreign funds invested with the SUN thus increased to Rp1.70 trillion so that it raised the foreign ownership in the SUN from 30.26 percent to 30.58 percent. Yet, the increase in the risk aversion of foreign investors as the global sentiment inclined to experiencing an unfavorable condition reduced foreign funds invested with the domestic financial markets. According to Difi A Johansyah, the decline was a result of the adjustment made by foreign investors on the position of their portfolio investments in the run up the end of the year. He said that the developments had impact on the outflow of foreign funds amounting to Rp3.26 trillion. The increase in the profit-taking in the stock market was reflected in the net sale of foreign shares worth Rp3.15 trillion. This was in line with the increase in the foreign stocks trading activities which reached 44.12 percent of the total stock transactions, exceeding the previous foreign stock trading which was 33.51 percent. During that period, foreign investment portfolio in the SUN declined by Rp854 billion while in the SBI, it increased by Rp737 billion. Thus, the foreign share ceiling at the SBI against the total SBI outstanding values increased to 27.48 percent from the previous 17.11 percent while its ceiling with the SUN against the total SUN outstanding figure went down from 30.96 percent to 30.83 percent. Even though foreign funds in the domestic portfolio investments are showing a downward trend in the runnup to the year end, Indonesia?s better economic performance is expected to attract them back next year. "Indonesia?s better economic performance will stimulate the entry of foreign funds into Indonesia in 2011," Joko Saptono, head of the economic unit of the Indonesian Stock Exchange (BEI) said in a workshop held in Banjarmasin, South Kalimantan, recently. He said that there were four countries which were expected to serve as the pillars of the world economic growth after the United States experienced financial crisis that had created a great number of unemployed people. The four countries are China, India, Brazil and Indonesia, which is viewed as having a good economic growth. Though it has a good economic growth, China has a high rate of inflation which reaches 4.7 percent. "Compared with the inflation rate in Indonesia, the Chinese one looks small but as a country which usually has an inflation rate between 0.5 and 1 percent, the 4.7 percent figure exceeds the normal level," Joko said. The same is true to India whose inflation rate reaches 13 percent, far higher than that of Indonesia. Thus, he said, Indonesia is the only pillar which has no significant problems, and has economic growth reaching 6 percent while its inflation of about 6 percent was still viewed as relatively stable. This economic condition will stimulate foreign funds to enter Indonesia in 2011. "This position gives an advantage position because the trust of foreign investors to invest their money in Indonesia would become high," he said. |
Selasa, 28 Desember 2010
GOVT TO FINISH 93.6 PCT OF ITS 2010 BUDGET-FUNDED PROJECTS
| By Andi Abdussalam |
Jakarta, Dec 28 (ANTARA) - The government is optimistic that it will finish about 93.6 percent of its 2010 budget-funded projects at the end of this year, and is committed to finishing all projects funded by the 2011 state budget next year. Finance Minister Agus Martowadojo said the government targeted to absorb 93.6 percent of the 2010 state budget, which was higher than the budget absorption in the previous year. "We have sometime ago simplified the procedures for the implementation of goods and service projects in order to accelerate budget absorption. Data on project realization until December 23 2010, and payments that are still to be made, indicate that the budget absorption until the end of 2010 would reach 93.6 percent," the finance minister said in a report during a handing over function of 2011 Budget-Funded Project Proposal Lists (DIPA) at the State Palace here on Tuesday. In the 2010 revised state budget, state expenditure was set a Rp1,126 trillion and the state revenues and grant were valued at Rp992.40 trillion, with a deficit set at 2.1 percent from the gross domestic product or amounting to Rp133.75 trillion. The deficit was later revised down to Rp95.1 trillion or about 1.5 percent. The government is convinced to absorb some 93.6 percent of the budget after it took several steps. Up to December 23, 2010, the absorption of DIPA 2010 had reached 83.4 percent of the 2010 revised state budget. The absorption until December 23 this year is actually smaller than that in the same period a year earlier which stood at 86.5 percent. Yet, there are a number of indicators --such as letters of payment orders to projects already implemented -- that make the finance minister confident of budget absorption to reach 93.6 percent. The disbursement of 2010 State Budget funds up to the end of November, for example, reached Rp817.2 trillion or 72.6 percent of the total amount of Rp1,126.1 trillion. The ministry of finance said last week that of the disbursed amount, Rp525.6 trillion or 67.3 percent of the ceiling was spent by the central government. Expenditures by government ministries and state institutions totaled Rp249.6 trillion or 68.2 percent of the ceiling in the 2010 state budget. There was a slight decline in the expenditures compared to 70.7 percent in the 2009 budget. The utilization of state budget funds by government ministries and state institutions had been influenced by among others delays in the issuance of disbursal approvals by the various budget funds utilization authorities. The same tendency was found in almost all working units at central and provincial levels. The delays were said to have had something to do with the more prudent approaches taken by the ministries in light of the more progressive anti-corruption measures in Indonesia. In addition, the slow move on the utilization of state budget has also been influenced by the tighter implementation of procurement processes for goods and services, in particular with the increasingly debated process of tenders as well as the reports by non-governmental organizations to police and prosecutors' office. However, the government is committed to implementing all budget-funded programs next year. President Susilo Bambang Yudhoyono when handing over the DIPA 2011 on Tuesday asked ministers and the heads of all government agencies and state institutions to develop a result-oriented mindset in the spending of state budget funds. The President asked that the budget be used in more innovative, creative, and proactive manner. "Let us change our mindset on the use of State Budget funds from input-based to output- and outcome-based. Stop using budget funds in the 'business as usual' way," the president said. The 2011 State Budget consists of state revenues and grants amounting to Rp1,104.9 trillion, up 11.3 percent from the previous year's budget. Allocation for state revenues is Rp1,229.6 trillion which represents an increase of 9.2 percent from the previous year's budget while the budget deficit is projected to amount to Rp124.66 trillion, or 1.8 percent. The handing over of DIPA 2011 is this year done earlier than in previous budget years. It is implemented at the end of the year so that starting from the first day of the year 2011 all state treasury offices (KPPN) across the country can be ready to serve the disbursement of funds for all work units. Punctuality in fund disbursements was of great importance for the success in the implementation of development programs which have been well and carefully planned. The national priorities to be achieved in 2011 in accordance with the government's plan of action were bureaucratic reform and good governance, education quality improvement, implementation of health improvement efforts and percentage of drug availability, and poverty reduction. Finance Minister Agus Martowadojo said that handing over of the DIPA 2011 at the end of 2010 indicated the government?s commitment to implementing all of its programs both in the central and regional governments. "The early handing over of the DIPA 2011 in done in an effort to enable ministries and other government agencies to carry out their activities as soon as possible in 2011. Actions can be done at the end of 2010 so that the contracts could be concluded early in 2011 and are supported by all sides," the minister said. The minister said that the 2011 state budget was made based on a performance-based budgeting system oriented to output and outcome so that goals that would be achieved could be taken for granted. |
Senin, 27 Desember 2010
OIL, GAS LIFTING SET AT 970 THOUSAND BARRELS PER DAY BEXT YEAR
| By Andi Abdussalam |
Jakarta, Dec 27 (ANTARA) - Indonesia is optimistic that its oil and gas lifting in 2011 will reach 970,000 barrels per day (bpd) based on the target set in its state budget. This is regardless of the fact that the Upstream Oil and Gas Regulatory Agency (BP Migas) has only approved 952,000 bpd under its 2011 work program and budget (WP&B) with cooperation contractors (KKKS). Head of BP Migas R Priyono said the lifting was actually lower from the target in 2011 State Budget set at 970,000 barrels per day. "But we are optimistic the oil lifting target will be reached as set in the State Budget at 970,000 barrels per day," he said. The optimism is based on this year's oil and gas production performance which reaches 956,000 bpd, exceeding the approved 877,000 bpd of the target set at 965,000 bpd in the state budget. He said the lifting figure under the 2011 work program and budget of 952,000 barrels per day was 37,000 barrels per day higher than initially proposed by the cooperation contractors (KKKS) of only 915,000 barrels per day. The WP&B figure is eventually always lower than realization. In 2010, for example, the lifting based on the WP&B amounts to 877,000 barrels per day, but in fact the lifting may reach 954,000 barrels per day or 108.8 pct above the WP&B. "So we are optimistic in facing 2011," he added. Unlike oil, Priyono said, the 2011 gas lifting is according to the WP&B 7,825 billion british thermal units per day (BBTUD), higher than the target in the state budget of 7,768 BBTUD. The gas production rate proposed by KKKS was lower, namely 7,613 BBTUD. Up to December 18, 2010, the 2010 oil lifting had reached 954,000 barrels per day, or 98.99 pct of the target of 965,000 barrels per day. Production was below target because of gas pipeline leaks of PT TGI that reduce production by 6,000 barrels per day. Production decline reached only 0.25 pct or much lower than the planned 12 pct. New oil and gas reserves in 2010 reached nine KKKS with the discovery of 230 million barrels of oil and 2.8 trillion cubic feet of gas. Priyono is optimistic that oil production continued to increase and may reach 1.157 million per barrel in 2014 with a declining rate of 12 pct. Actually, the oil lifting for 2011 increased by 5,000 bpd compared with that of 2010. "In 2010 the oil production target was set at 965,000 bpd, but we could realize only 956.000 bpd. While the target for 2011 slightly increases to 970,000 bpd," Head of Public Relations of BP Migas, Elan Biantoro, said meanwhile. Elan said he was optimistic that the target next year could be achieved through the hard work of all sides, particularly the oil contractor companies or KKKS. He expressed his hope that oil leakage such the pipeline leaks of PT Transportasi Gas Indonesia (TGI) in Raiu province last September would not happen again. Such a leakage would have impact on national oil production. The leakage of TGI gas pipelines in Indragiri Hulu district sometime ago caused a number of oil and gas firms in Riau such as PT Chevron Pacific Indonesia in Duri area of Benkalis district and Bumi Siak Pusako-Pertamina Joint Operation Board (BOB) in Siak District, to face difficulties in operating maximally. According to Priyono, the realized lifting in 2010 was lower than the target of 965,000 bpd. There were a number of constraints that cut production by 19,000 bpd. Virtually, the lifting could reach 976,000 bpd if there were no constraints. The various constraints included the loss of 9,700 bpd production as a result of bad weather, transportation system, electricity, unprepared recipients and decreasing demand during major holidays. The leakage of pipelines cut production by 5,000 bpd. As a result, efforts to reach the oil and gas production target were hampered as gas supply from TGI pipelines was cut off and affect power supply needed to produce oil from the oil fields. "We hope that constraints in the oil and gas production would not repeat themselves in 2011," Elan Biantoro said. Based on data from the BP Migas, of the 956,000 bpd produced in 2010, about 387,000 bpd came from Riau province. It consisted of 380,000 bpd produced by Chevron and 17,000 others by the Bumi Siak Pusako-Pertamina BOB. But BP Migas said it had yet to know how much the oil contribution the Riau province would contribute to national oil and gas lifting target for 2011. "Though the national oil and gas lifting target for 2011 has been set at 970,000 bpd, yet it is not yet known how much Ria province would contribute to it," BP Migas Head for Northern Sumatra Baris Sitorus said. |
Kamis, 23 Desember 2010
RIFT DEVELOPING AMONG GOVT COALITION PARTIES ?
| By Andi Abdussalam |
Jakarta, Dec 23 (ANTARA) - The 2014 presidential race is still about three years away , yet the political parties in the government coalition have begun making certain maneuvers with the smaller ones accusing their two major partners - the ruling Democrat Party (PD) and the Golkar Party - of capitalizing on their dominant position at the expense of their juniors. It was reported that the Prosperous Justice Party (PKS) had asked the other smaller partners in the coalition - the National Mandate Party (PAN), the United Development Party (PPP) and the National Awakening Party (PKB) - to form an axis to countervail the dominance of the PD and Golkar. The PKS said the smaller parties in the coalition would feel the impact of the PD-Golkar dominance, especially in the face of the 2014 general elections. However, PD Chairman Anas Urbaningrum denied there was an internal rift among political parties in the Joint Secretariat of the Government Coalition (Setgab). "I don't think there are frictions within the coalition," Anas Urbaningrum said after speaking at a year-end discussion on recruitment of political party members, law enforcement and corruption eradication here on Thursday. The PD chairman said the initial purpose of the joint secretariat was to form a permanent coalition. "This is our common commitment agreed upon by the Setgab," Anas said. The deputy secretary general of PKS, Mahfudz Siddiq, had earlier said that the smaller parties in the government coalition would feel the impact of the maneuvers and the interests of the PD and Golkar in the face of the general elections in 2014. "The axis parties in the coalition will be hammed in between the maneuvers of the Democrat Party and Golkar which would themselves tightly compete in the 2014 elections capitalizing on the joint secretariat," Mahfudz said. He predicted that in 2014, the Democrat Party and Golkar would nominate their respective presidential candidates. They will use and take the advantage of the secretariat in the remaining three years to consolidate and mobilize their human resources. Mahfudz saw the dynamism in the joint secretariat as being funny. PD and Golkar which underwent a political 'marriage' often experienced political conflict and often 'held hostage' with each other, yet they often collaborate on behalf of the joint secretariat. PKS is of the view that Golkar's and PD's domination within the joint secretariat had weakened the function of the Setgab itself. In response to this, Anas Urabaningrum only said what was needed to be built within the Setgab was to increase communications among the political parties in the government coalition. "Information about the ministerial cabinet meeting should also be received by all political parties in the Setgab," Anas said. Yet, PKS --which put forward the idea of forming an axis force among PKS, PAN, PPP and PKB to face the PD and Golkar-- even created a discourse that the Indonesian Democratic Party of Struggle (PDIP) would be asked to join the axis force, particularly in nominating a presidential candidate in the 2014 presidential elections. Secretary General of PDIP Tjahjo Kumolo said meanwhile that a member of the government coalition which intended to have a strategic talk with PDIP in the face of the 2014 general elections must first break away from the government's coalition. "In principle, we are ready to have a dialog on the 2014 elections with a political party which has a minister in the government cabinet but it has to leave the cabinet in the first place," Tjahjo said. He said that political parties which wanted to have a deal with the PDIP on the 2014 elections should not play a game in two places. "Don't play in two places. It should not happen that one leg is in the government while the other one is with us," he said. The PKS move to establish an axis force is jut another indication of the fragility of the Setgab in the face of the political developments in the country. Last June, Golkar even once threatened to break away from the Setgab when one of its proposals was rejected by coalition partners. Golkar tabled a pork barrel fund, 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. The proposal, which was called aspiration funds, was rejected. "Representatives of parties in coalition have discussed the aspiration funds for members of the House of Representatives (DPR) at the Setgab. But why it is rejected. All have to share common responsibility," Yamin Tawari, associate chairman of the Golkar's Executive Board, said. Yamin Tawari, was reported to have said that Golkar felt abandoned by the other parties in the coalition with regard to its proposal for the allocation of "aspiration" (pork barrel) funds for legislators, and therefore it was no longer necessary for the party to remain in the coalition. However, Golkar vice general chairman Theo Smabuaga was quick to deny the party wished to leave the joint secretariat. "On the contrary, we want to stay in the coalition's joint secretariat to intensify discussions on strategic and fundamental issues affecting the country and the people," he said. Theo said Golkar, the second biggest party after the ruling Democrat Party, had no intention at all of quitting the coalition of parties supporting the government. He said it was not impossible for coalition members to have differences of view. "It is a normal thing in a democracy. But differences do not need to be blown up. We will continue building unity to support the implementation of various strategic programs," he said. (T.A014/A/HAJM/19:50/H-YH) 23-12-2010 20:13 |
Sabtu, 18 Desember 2010
NEXT YEAR LIKELY TO SEE HIGH INFLATION
| By Andi Abdussalam |
Jakarta, Dec 18(ANTARA) - Economic observers have predicted that inflation in 2011 could reach up to 6-7 percent, which is far higher than the government's and Bank Indonesia (BI/the central bank)'s previous assumptions at 5.3 percent. They based their predictions on various possibilities, including policies the government is likely to introduce in 2011 such as sn increases in fuel oil prices, the basic power rate and the threat of global crisis. "The economic growth target of 6.4 percent is likely to be achieved but we are not sure about the inflation target. In a pessimistic scenario . inflation in 2011 could reach 7 percent," A. Prasetyantoko, economic analyst of Atmajaya Catholic University, told a seminar on monetary policy on Thursday. Prasetyantoko said inflation could be estimated at seven percent if the world oil price did not increase. "The story will be different if the world crude rises to US$100 per barrel," he said. He said that the seven percent inflation estimate had not yet included consideration of possible increase in world crude price from US$80 per barrel. A moderate estimate was made by economic observer A Tony Prasetiantono who put the figure for 2011 inflation at 6 percent. "I predict the inflation rate next year at about six percent," Tony Prasetiantono told a seminar on Indonesia's economic outlook 2011. He said that Indonesia at present was still facing three big problems, namely currency wars, global financial crisis and bad infrastructure conditions. Tony, who is head of the Economic and Public Police Study Center of the University of Gadjah Mada, said that an increase in electricity tariff rate and fuel oils as well as global crisis would have impact on Indonesia's economy and boost inflation. However, the inflation in that rate is still classified as reasonable and would not badly disrupt the country's economy. This is because the rupiah exchange rate is inclined to be stable. Although it will be facing internal and external constraints in 2011, Indonesia will still likely be strong to face it as it still has stable and strong domestic currency exchange value. "I predict that the rupiah exchange rate against the US currency in 2011 would be at a range between 9.000 and 9.200 rupiah per dollar. Economic growth and inflation rates will respectively at 6.3 percent and 6 percent respectively," he said. Yet, according to Prasetyantoko, inflation can even exceed 7 percent. He said inflation would pose a challenge for the management of Indonesian economy in 2011. The government's plan to limit subsidized fuel oil consumption in March 2011 will drive up fuel oil prices. In addition, increases in world crude prices and climate change issues are likely to generate inflation and food prices. "This all will create inflationary pressures. If conditions worsen inflation can reach over 7 percent," Prasetiyantoko said. He said that so far there were no indications whether global economic conditions would be improving or not. "If economic conditions in Europe and the United States are improving there is the possibility of capital outflows from Indonesia that would influence inflation in the country," Prasetyantoko said. Legislator Aziz Syamsuddin of the Golkar Party shared Prasetyantoko argument that limitation of fuel oil consumption will also trigger inflationary pressures and has a great impact on the economy because of the burden it will create for large segments of middle class society. "The government should be really careful with its policy to scrap its fuel oil subsidy because it will affect the people's interest and has a direct impact on them," Aziz Syamsuddin, a member of the House of Representatives said. He said the plan to restrict the use of subsidized fuel would affect the prices of basic commodities. These goods reach markets through a transportation process mainly involving vehicles running on fuel oil. If transport operators have to pay higher fuel prices, transportation costs will automatically rise and so will the commodities' prices. "Means of transportation for commodity is usually privately owned, the segment that isn't included in the subsidized vehicle category," Syamsuddin. He added an increase in transportation cost will automatically create an extra financial burden for the people as basic prices move up whereas their income remains stagnant. "Really difficult situations may emerge from this fact. So, the government needs to be very careful in this regard," he added. In the meantime, BI also predicts that inflationary pressure in 2010 will continue to take place in 2011 but it will not exceed the 6 percent level. "The inflationary pressure would continue in 2011 from the beginning of the year but it would not exceed 6.0 percent," BI Governor Darmin Nasution. Nasution said that next year's inflation would not reach 6 percent as far as there was no extraordinary event that would trigger inflation. For this year, BI has since the beginning predicted that the inflation in 2010 would slightly above 6 percent. This is because in July 2010 a number of cases had boosted the inflation such as the increase in the basic electricity tariff and bad weather that caused agricultural product to weaken. However, Darmin refused to mention the exact level of the inflation rate in 2011. In BI's assumptions, inflation was set at 6.5 percent for 2010 and 5.3 percent for 2011. |
Jumat, 17 Desember 2010
BANK CREDITS PREDICTED TO GROW 24 PCT IN 2011
| By Andi Abdussalam |
Jakarta, Dec 17 (ANTARA) - Indonesia's central bank or Bank Indonesia (BI) has predicted that bank credits --which up to the middle of November this year reached Rp1,664.2 trillion-- will increase by about 24 percent in 2011. The increase in bank credits next year is expected to help stimulate economic activities, boost the real sector and fuel economic growth next year. "With the prediction that economic growth in 2011 will be the same as this year, credit growth in 2011 has the potential to reach a level between 20 and 24 percent," BI Deputy Governor Muliaman D Hadad said. With 2010 coming to its conclusion, BI has noted that the banking community's performance in fulfilling its intermediary role - extending credit to business or industry - has continued to improve. In the second week of December, its credits increased by Rp7.06 trillion. He said that third-party funds (DPK) were also expected to increase by about 15 to 20 percent next year as bank credit growth would follow economic growth in 2011 which was expected to be at a range of between 6 and 6.5 percent. In the second week of December 2010, banks collected DPK funds amounting to Rp19.61 trillion. Head of BI's Public Relations Bureau Difi A Johansyah said on Tuesday that this year, banks had provided year-on-year (yoy) credits amounting to Rp316.54 trillion or 22.87 percent. They had also collected yoy DPK funds valued at Rp323.38 or 17.26 percent. Earlier, up to the middle of November, banks in the country provided credits worth Rp234.08 trillion, or an increase by 16.37 percent while in the same period in 2009 credits provided had reached Rp299.32 trillion or 21.93 percent. In the fifth week of November, banks provided credits worth Rp10.47 trillion and collected third party funds (DPK) amounting to Rp18.47 trillion. "Based on year-to-date (ytd) records the credit provision in the third week of November increased by 17.44 percent while based on the year-on-year (yoy) it rose by 22.11 percent," Difi A Johansyah. The same is true to the third party funds collected by banks. They increased 10.91 percent ytd and 17.35 percent yoy up to the middle of November. At the end of November, credits' basic interest rate (SBDK) for rupiah dropped significantly by nine basis points (bps) while the average interest rate of one-month deposit increased by one basis point so that the spread of the rupiah interest rate decreased from 5.54 percent to 5.44 percent. Global uncertainties have led foreign investors at the end of November to take the wait-and-see position triggering outflows of foreign funds again. Foreign funds invested with the rupiah assets decreased by Rp5.11 trillion, namely Rp2.64 trillion in the Bank Indonesia Certificates (SBI), Rp1.22 trillion in the state debentures (SUN) and Rp1.25 trillion in the foreign stake net sales. The latest developments reduced foreign ownership in the SBI from 30.2 percent to 28.78 percent and in the SUN from 30.46 percent to 30.26 percent. The credit provision of Rp10.47 trillion in the fifth week of November consisted of RP3.93 trillion in rupiah and Rp6.54 in foreign currencies. In the report week, credits in rupiah increased at almost all bank categories, except at the mixture bank category, which experienced a drop of Rp0.83 trillion. The biggest increase in rupiah credits took place with banks of the private and partnership categories respectively amounting to Rp2.38 trillion and rp1.75 trillion. In the meantime, the increase in foreign currency credits took place at banks of almost all categories where the highest ones took place with partnership banks worth Rp3.26 trillion and with branches of foreign banks valued at Rp1.97 trillion. In the foreign currency denomination, banks' foreign currency credits increased US$680 billion in the last week of November. Third party funds (DPK) increased by Rp18.47 trillion particularly due to the increase in the DPK in the rupiah currency by Rp16.0 trillion while foreign currency DPK only increased by Rp2.47 trillion. This growth brought the DPK to the amount of Rp214.91 ytd (10.91 percent) and Rp323.06 trillion (17.35 percent) yoy. BI recorded that up the end of November 2010, the credit growth reached 21.8 percent yoy. Capital working credits were increasingly accelerated. Ahead, credits would continue to be directed to the productive sectors. With that developments and based on banks' business plan, the overall banks' credits in 2010 are expected to grow by about 22 to 24 percent. Muliaman D Hadad said that the challenges that would be faced by banks in 2011 included the impact of global economic crisis. In facing this fact, banks should maintain their financial resilience and stability. The central bank itself also has the task of maintaining financial stability because it is related to its responsibility to maintain monetary stability, BI Deputy Governor Halim Alamsyah said meanwhile. As regards, the government is planning to establish a Financial Service Authority (OJK) at the end of this year. The OJK would be the sole agency with the power to supervise all financial institutions in Indonesia. |