THE COORDINATING MINISTRY FOR ECONOMIC AFFAIRS
REPUBLIC OF INDONESIA
Main Building, Ministry of Finance, Jl. Lapangan Banteng Timur No.2-4 Jakarta 10710
Tel: (021) 351-1178 Fax: (021) 351-1186 Website: http://www.ekon.go.id
Trade and Investment News[1], 8 June 2009
Highlights
National
• US President Obama touted Indonesia in a speech directed at the Muslim world
Politics
• Disputes over the result of the April 9 legislative election will conclude this week
Terrorism
• Although JI membership is down, some fugitives may still harbor a violent agenda
Security
• Papua security is stable and additional police not needed for the election
Law & Order
• Presidential approval is no longer required for high-level graft investigations
Economy
• The rupiah strengthened below 10,000 per US dollar for the first time since October
• Indonesia improved from 51st to 42nd place on the 2009 World Competitiveness
Macroeconomy
• Year-on-year Inflation fell more than one percentage point in May
Investment
• PT Kaltim Nitrate Indonesia signed a $173 million contract to build SEA’s largest ammonium nitrate plant
State Concern
• REI, KADIN file report of alleged cement cartel
SOE
• PT Krakatau Steel is set to snap up $381 million in loans this year to boost productivity
Private Sector
• PT Excelcomindo Pratama suffered a $30 million first quarter loss due to the global crisis
Bank
• Indonesian banks recorded an increase of 21.9% or Rp16.091 trillion in profit in first quarter
Oil & Gas
• Medco Energi expects to reach an agreement on a huge LNG project in Central Sulawesi
Mining
• PT Bumi Resources forecast 13% increase in output from 2008
NATIONAL
Obama touts Indonesia in speech to the Muslim world
US President Barack Obama touted Indonesia in a major speech directed at the Muslim world in Cairo, Egypt on Thursday, saying the nation with the largest Muslim population is playing a role in promoting religious tolerance and gender equality, reported The Jakarta Post.
"Islam has a proud tradition of tolerance. I saw it firsthand as a child in Indonesia, where devout Christians worshiped freely in an overwhelmingly Muslim country. That is the spirit we need today. People in every country should be free to choose and live their faith based upon the persuasion of the mind, heart, and soul," Obama said in the speech from at Cairo University.
Obama also highlighted Indonesia's successfully promotion of gender equality.
"Now let me be clear: issues of women's equality are by no means simply an issue for Islam. In Turkey, Pakistan, Bangladesh and Indonesia we have seen Muslim-majority countries elect a woman to lead," he said.
Indonesia has been invoked several times in US foreign policy speeches since Obama assumed the presidency in January.
US Secretary of State Hillary Rodham Clinton mentioned the role played by Indonesia in solving the global crisis during a speech to the US Senate in January.
"Emerging markets like China, India, Brazil, South Africa and Indonesia... are part of the solution and have become partners in maintaining global economic stability,” Clinton said.
Clinton visited Jakarta as part of her Asian tour in February, during which she hailed Indonesia as an example of "a Muslim country where democracy prevails."
Meanwhile, Clinton is scheduled to hold talks with her Indonesian counterpart Foreign Minister Hasan Wirajuda in Washington D.C. on Monday to discuss the two countries’ preparations for more comprehensive partnership cooperation, a Foreign Ministry spokesman said, reported Antara.
"The meeting will be aimed at entering a new stage in bilateral relations," spokesman Teuku Faizasyah said.
During his US trip, Wirajuda is also scheduled to meet members of Congress but the agenda has not been made public, Faizasyah said.
ADB announces $1B govt. loan for social services
The Asian Development Bank (ADB) announced on Thursday it had approved a $1 billion loan for Indonesia to help the government sustain expenditure on poverty alleviation, social protection and infrastructure maintenance, reported Agence France-Presse.
"The global financial crisis has made it expensive for Indonesia to access international debt markets and trade finance, which could constrain spending on essential social services and poverty alleviation programs," Jaseem Ahmed, ADB's Southeast Asia Director said in a statement.
"This loan will enable the government to maintain public expenditures and to respond more effectively to the poverty impacts of the financial crisis."
The loan will enhance Indonesia's financial safety net, better mobilize funds from commercial markets, and maintain financial sector stability, thereby reducing the government's costs for borrowing from the market, the statement said.
The single-tranche loan will have a 15-year term, including a three-year grace period, with an interest rate determined in accordance with ADB's LIBOR-based lending facility.
New air control facilities to improve air safety in eastern Indonesia
New air traffic control facilities at five airports in eastern Indonesia began operations on Tuesday, said Transportation Minister Jusman Syafii Djamal, reported Kompas.
The new facilities, centered at Sultan Hasanuddin airport, Makassar, South Sulawesi, cost the government approximately Rp150 billion ($14.56 million), said Djamal.
The system is reportedly consists of new radars tracking facilities for Sultan Hasanuddin airport, Juanda Airport in Surabaya, Sepinggan Airport in Balikpapan and Syamsuddin Noor Airport in Banjarmasin.
A new air traffic control system was also installed at Ngurah Rai airport in Denpasar, Bali and Juanda airport.
The president director of state-owned airport operator PT Angkasa Pura I, Bambang Darwoto, said the new facilities will help improve air traffic control services and flight safety across the expansive eastern parts of the country.
POLITICS
Constitutional Court to rule on legislative poll disputes this week
Disputes over the result of the April 9 legislative election will conclude next week as the Constitutional Court will start handing down verdicts for almost 600 election-related cases, reported The Jakarta Globe.
“Starting next week, the court will begin reading the verdicts,” Constitutional Court chief Mahfud MD said on Thursday.
He said the court would give its verdicts starting from the simplest cases, but did not elaborate on which ones would be the first.
The reading of the verdicts will take three weeks to complete, from June 8 to June 26, Mahfid said.
Meanwhile, the chairman of the General Elections Commission (KPU), Abdul Hafidz Anshary, said Tuesday poll officials are ready to present evidence in disputes at the Constitutional Court.
He said the state prosecutors representing the KPU were well-trained to face lawsuits filed by political parties and candidates who objected the results of the legislative elections in April.
The Court is hearing a total of 620 cases and is scheduled to issue verdicts next week.
The election law gives the Constitutional Court 30 days to settle the disputes.
176 million voters registered for presidential poll: KPU
The number of registered voters for the July 8 presidential election has reached 176.37 million, the General Elections Commission (KPU) said, reported Antara.
KPU official Andi Nurpati said the number is an increase of five million voters from the list used for the legislative poll on April 9.
“Although the KPU has officially announced the voter list for the presidential election, all Regional Election Commissions should verify their voter lists at the local level,” said Nurpati.
KPU chairman Abdul Hafiz Anshary said there are still problems with the voter list for Papua as not all residential data has been turned in to provincial election officials.
“Despite some minor issues, the KPU has done all it can to fix errors that occurred during the legislative election. All voters are advised to double check with local election officials to make sure they are included on the presidential election voter list,” Anshary said.
TERRORISM
JI ranks diminished, now an ‘Indonesian’ group: ICG
The membership of radical group Jemaah Islamiah (JI) has plummeted, but some fugitives may still harbor a violent agenda, says a Jakarta-based terrorism expert, reported The Age.
International Crisis Group senior adviser Sidney Jones said arrests of more than 250 people had weakened the group's structure and sapped its regional strength.
At its height 10 years ago the clandestine organization had about 2000 members, but some have joined an above-ground movement called Jemaah Ansharut Tauhid established last year by spiritual leader Abu Bakr Bay’syir, and the number of "pure" JI members has dropped to about 200, she said.
Its reach through Singapore, Malaysia, Australia and the Philippines had contracted to such an extent that it is now an Indonesian rather than regional organization.
An Indonesian anti-terrorism squad program aimed at de-radicalizing JI prisoners by providing them with better conditions in prison and on release had been effective, Jones said.
JI members were convicted of carrying out the bomb attacks in Bali in 2002 that killed 202 people; members are also suspected of being involved in the second Bali bombing in 2005 and attacks on the Australian embassy and Marriott Hotel in Jakarta.
"There is a very strong consensus within JI that the bombings were counterproductive because they lost public support and ended up getting everybody arrested and really weakening the organization," Jones said.
Fugitives such as Noordin M. Top remain in hiding and are probably under the protection of JI, on the grounds they not take further violent action, she said.
"Violence would not come from JI as an organization, but rather fugitives who have nothing to lose and have the capacity to put together a small group of people who have some element of bomb-making expertise or weapons experience,” she said.
Jones said while you can't rule out the possibility that they would be able to pull something off, their agenda is more against global targets than it is against Western ones.
The US has refused to release JI operations chief Hambali into Indonesian custody, despite permitting the nation's counter-terrorism officials to interview the alleged mastermind of the Bali bombings after more than five years of requests.
JI still has an Emir, a religious and administrative leader, but no longer has the overarching administrative divisions that used to span Australia, Indonesia, Singapore and north-west Indonesia and the Philippines, Jones said.
Its members now focus on “dakwah” - religious outreach - and maintain a strong social network: members intermarry, go into business partnerships and play sport together, she said
SECURITY
No additional officers for presidential poll: Police
The National Police will not station additional personnel in Papua for the presidential election on July 8, a police official said Friday, reported Antara.
“Security for the presidential election will be handled by Papua Police already in the province,” said National Police Operation Deputy Insp. Gen. SY Wenas.
Wenas said the security situation in Papua “is stable with no significant disturbances.”
However, Wenas said, if security deteriorates due the National Police will immediately deploy troops to the affected regions.
A number of security disturbance have plagued Papua since the legislative poll on April 9 and alleged separatists from the Free Papua Organization (OPM) continue to occupy a pioneer airport in Kapeso hamlet, Mamberamo Raya regency.
Incidents of farmers being threatened by armed gunmen have also been reported in Tanah Hitam, Jayapura.
Security forces said they will maintain a persuasive approach in resolving the incidents by involving religious, community figures and local government officials to avoid responding with force.
The legislative election in Papua saw a number of security disturbances, including an attack on the Abepura Police station in Jayapura, an arson attack at Cenderawasih University and an attack targeting police’s Mobile Brigade personnel and at security posts in Puncak Jaya.
On April 9, a bomb also exploded near the Muara Tami Bridge, Jayapura, near border with Papua New Guinea.
LAW & ORDER
Commission probes judges in Munir murder acquittal
A panel of judges that acquitted a former deputy at the State Intelligence Agency (BIN), Muchdi Purwopranjono, of murdering human rights activist Munir Said Thalib in 2004, was questioned by the Judicial Commission on Friday, Detikcom reported.
The probe was led by Judicial Commission chairman Busyro Muqoddas in Central Jakarta, said commission member Chatamarrasjid.
“We questioned Judge Suharto, the head of panel of judges handling the murder case, and two other judges for about four hours,” said Chatamarrasjid.
The court cleared Purwopranjono from all charges and released him from detention on December 31.
The judges declared that none of the statements provided by prosecutors were enough to prove the guilt of Purwopranjono.
On September 7, 2004, prominent activist Thalib on board a Garuda flight from Singapore to Amsterdam.
It was later determined Thalib was poisoned with arsenic on a stopover in Singapore from Jakarta by off-duty pilot Pollycarpus Budihari Priyanto, who was recruited by BIN to carry out the murder, for which Priyanto was convicted and sentenced to 20 years in prison.
Purwopranjono’s acquittal failed to unravel the alleged conspiracy behind the high-profile murder and sparked protests from human rights activists across the globe, who said the verdict disgraced Indonesia’s struggle to uphold human rights and justice.
The Judicial Commission is mandated to make inquiries into cases where there is intense public concern.
The commission cannot charge judges with any irregularities, but can give recommendations to the Supreme Court on their rulings.
KPK imposes travel ban on Natuna regent
The Corruption Eradication Commission (KPK) has slapped a travel ban on the regent of Natuna, Riau Islands, Daeng Rusnadi, and his predecessor Hamid Rizal over their alleged involvement in the embezzlement of oil and gas revenue sharing funds in 2004, reported The Jakarta Post
The travel ban came after a both men were questioned for hours by KPK investigators on Friday.
Head of the Riau Islands Justice and Human Rights Office, Adjat Sudrajat Hafid, confirmed the ban and said the travel ban is a standard procedure and a “policy from the top,” reported Tempo Interactive.
According to the KPK, Rusnadi is accused of disbursing Rp52 billion from oil and gas revenue to 20 members of the Natuna Regional House of Representatives.
The money was allotted to Natuna by the central government to accelerate development in the oil and gas-rich regency.
A local legislator, Mohammad Djamil, admitted to receiving the money, but said he had already turned it over to KPK.
NTT: four arrested over people smuggling