Update News January 06, 2017

In The News

Economic Minister Push for 50 Percent E-commerce Growth per Year
Tempo, 06/01/2017

The Coordinating Minister for Economic Affairs Darmin Nasution said that Indonesian youths must be supported to achieve great things in information technology era.

They must be pushed to become start up business players and therefore the government has prepared its supporting infrastructure. “The infrastructure plan is set forth in an e-commerce roadmap,” Darmin Nasution said in Malang on Thursday, January 5, 2017.

The government is aiming to turn Indonesia into Southeast Asia’s largest digital economy country. The government’s ambition is underpinned by great potential and concrete digital economy development throughout 2016.

Indonesia has met 90 percent information technology infrastructure requirements of the country’s total population with over 126 percent of mobile phone penetration rate and cellphone use of 52 percent of total population.

On the ambitious plan, Darmin has confirmed the government’s commitment to boost entrepreneurship by encouraging the establishment of 1,000 digital economy start-ups in a bid to improve competitiveness.

At such rate of start-up growth, Indonesian e-commerce will be valued at US$10 billion, triggering 50 percent e-commerce growth per year. “E-commerce transactions are projected to reach US$130 billion by 2020,” Darmin said.

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Three Foreign Companies To Go IPO In 2017: BEI
Antara News, 06/01/2017

Three foreign companies operating in Indonesia have announced they will float their shares in an initial public offering (IPO) this year.

"Two of the foreign companies are doing business in the mining sector, while the other is in the property sector," President Director of the Indonesian Stock Exchange (BEI), Tito Sulistio, said after a meeting with Maritime Affairs Coordinating Minister Luhut Binsar Panjaitan in Jakarta on Thursday.

"I have talked to three foreign companies, two in the mining sector and one in property. They said they will float their shares through an IPO this year," said Sulistio.

He noted that the three companies are among the 52 foreign firms the BEI is hoping to go IPO too, and have made significant profits in Indonesia.

The total capitalization of the 52 companies could reach Rp300 trillion to Rp400 trillion.

"The three which will go IPO this year have medium capitalization. It is unfair for them to develop significant assets in Indonesia without being listed on the stock exchange here," the BEI president director said.

He noted that he had submitted the names of the 52 foreign companies to the finance minister so that the government would encourage them to float their shares on the Indonesian stock exchange.

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Infrastructure, Transportation Development Remains Priority This Year: President
Antara News, 06/01/2017

The development of infrastructure and transportation to boost inter-regional connectivity will remain the governments priority in 2017, President Joko Widodo (Jokowi) has said.

"As we enter 2017, I would like to stress, once again, the development of infrastructure and transportation that ensures connectivity between areas, islands and especially, rural regions will remain the governments priority," Jokowi stated, in a closed meeting in the State Palace Complex here Thursday.

It will facilitate balanced development and growth, at the same time, narrowing inequality between cities and villages in Indonesia, the president believed.

"I want to emphasize that building connectivity does not solely mean developing transportation infrastructure, but it is also related to logistic systems and multi-means distribution," he remarked.

People in rural, border and far-flung areas have to pay a high price to buy even the basic necessities. They even find it hard to obtain these goods, the president pointed out.

"I have, therefore, directed the authorities concerned to ensure that toll roads and flyovers are well integrated with industrial areas and logistic centers," he declared.

Besides, sea toll roads and sky bridges should boost the areas economy by facilitating easy movement, the president asserted.

The infrastructure in the country must ensure easy exchange of goods between districts, rather than just allowing goods into a particular area, the president stressed.

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City To Resolve Problem On 26 Land Plots For MRT Through Consignment Scheme
The Jakarta Post, 06/01/2017

The Jakarta administration will use a consignment scheme to resolve the procurement issue of the remaining 26 land plots in South Jakarta that will be used for the Mass Rapid Transit (MRT) elevated lane.

Acting Jakarta Governor Sumarsono said at City Hall on Thursday that by the end of 2016, the city administration had paid most of the 136 land plots that delayed the MRT project.

“The remaining 26 land plots will be resolved at the court as we cannot negotiate with the owners,” he said.

Phase I of the MRT project, which stretches from the Hotel Indonesia Traffic Circle (Bundaran HI) in Central Jakarta to Lebak Bulus in South Jakarta, is divided into two parts – the underground from Bundaran HI to Senayan in South Jakarta and the elevated route from Senayan to Lebak Bulus.

Land procurement is the biggest issue that has hampered the progress of the project, currently already 62.2 percent completed.

Sumarsono said with the consignment, the procurement process could be faster, so the project could be finished in accordance with the new target. "We target the MRT to operate in March 2019,” he said.

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Govt Wants To Resolve Spatial Planning Of Seaport Project Ahead Of Abe Visit
The Jakarta Post, 06/01/2017

The government wants to settle the spatial planning (RTRW) adjustment of the Indonesia-Japan joint megaproject of Patimban Seaport in West Java, ahead of a visit by Japanese Prime Minister Shinzo Abe on Jan. 15.

Transportation Ministry’s director general for sea transportation Antonius Tonny Budiono said the government still had to adjust the spatial planning for the regency, provincial and national level.

“I hope that under the coordination of Pak Luhut, it can be done this month if it is possible,” he said on Thursday, referring to Coordinating Maritime Affairs Minister Luhut Pandjaitan.

The adjustment of the spatial planning is one of the administrative requirements in addition to the detailed engineering design (DED) and environmental impact analysis (Amdal) in the government’s bid to secure the loan from its Japanese counterpart for the Patimban project next year.

The government aimed to get the loan from Japan by May for the project. The Blue Book, composed by the National Development Planning Agency (Bappenas) that contains projects to be funded by foreign loans from 2015 to 2019, shows that as much as US$1.7 billion in foreign loans are expected to be channeled into the deep-sea project.

The future Patimban Port will be located about 70 kilometers from the Karawang Industrial Estate in Bekasi, West Java. It will have a container capacity of 1.5 million 20-foot equivalent units (TEUs) once it is partly completed by 2019.

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Indonesia, Japan to Sign Deal Next Week on Joint Study of High-Speed Railway
The Jakarta Globe, 06/01/2017

President Joko "Jokowi" Widodo and Japanese Prime Minister Shinzo Abe are expected to witness the signing of an agreement on a joint study of the Jakarta-Surabaya semi-high-speed railway next week.

Abe will visit Indonesia next week and the signing will be a step forward to cement a vital role for Japan in several giant infrastructure projects across the archipelago.

The deal on the $7.8 billion railway would be the first of several projects worth billions of dollars, which Japan and Indonesia will undertake under a public-private partnership scheme involving state-owned and private companies from both countries.

Other projects include the $3 billion Patimban deepsea port in West Java, a $487 million project to electrify and double the number of lanes to four on the railway line connecting Manggarai Station in Central Jakarta and Cikarang, an industrialized area in West Java.

"We are expecting that a preliminary agreement will be signed between the Ministry of Transportation and JICA [Japan International Cooperation Agency]," Coordinating Maritime Affairs Minister Luhut Pandjaitan said on Wednesday (04/01).

Japanese Transport Minister Keiichi Ishii visited Patimban Port and met with his Indonesian counterpart Budi Karya Sumadi last week to finalize talks on the projects.

Japan has been keen to secure transportation projects after losing out to the Chinese in 2015 for the contract to build Indonesia's first high-speed railway linking Jakarta and Bandung, West Java.

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Government To Expand Sea Toll Route
Antara News, 06/01/2017

The government will open seven more sea toll roads bringing the total to 13 routes to support logistics distribution.

"Currently we have six sea toll routes and the number would be increased to 13," Transport Minister Budi Karya Sumadi told reporters here on Thursday.

The minister said the new routes include Route T-7 of Tanjung Priok-Enggano-Mentawai- Nias island-Sinabang-Nias island-Mentawai-Enggano-Tanjung Priok.

He said the government will continue to improve all facilities, adding sea transport is not yet up to expectation such as in Natuna.

The Indonesian government has launched a program called the "Sea Toll Road" as part of the maritime ambitions of President Joko Widodo (Jokowi)in boosting the economy by improving connectivity between its islands.

Jokowi has since his presidential campaign vowed to turn Indonesia into a global maritime axis partly by building and modernizing the archipelagos ports, which will in turn improve maritime connectivity and commerce.

The Sea Toll Road program is expected to lower the price gap between the more developed western region of the country and its backward eastern region.

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Next Policy Package to Improve Port Dwelling Time: Chief Economic Minister
The Jakarta Globe, 06/01/2017

The Indonesian government is set to roll out another policy package later this month that will reduce dwelling time duration at ports as part of the government's efforts to improve logistics, attract much-needed investment which, in turn, will propel the economy.

"This month we will prepare and release the 15th policy package which will be about logistics and the practice of single data and information submission through the Indonesia National Single Window portal [known as INSW]," Coordinating Minister for Economic Affairs Darmin Nasution said on Wednesday (04/01).

According to Darmin, the INSW is part of the government's efforts to reduce dwelling time at Tanjung Priok Port to two days, from 2.9 days currently.

Previously, the Coordinating Minister for Maritime Affairs Luhut Binsar Panjaitan sent a team to evaluate the dwelling time at ports. He concluded that the ports need to use an additional crane, have a better operation system and create dry ports – or an inland intermodal terminal that connects directly to a seaport by road or rail.

"If the [state-owned port operator] Pelindo is struggling with it then ask a private party to be more transparent," Luhut said. "We can't afford to be late because dwelling time is is expensive, and we need to [cut costs]."

Meanwhile, a Ministry of Transportation director for sea transport traffic Bay M Hasani said the government has already issued a ministerial regulation in 2015 on the maximum time to store goods, allowing for goods to be stored for up to a maximum of three days at Tanjung Priok Port.

The regulation, however, does not cover other big ports such as Belawan Port in Medan, North Sumatra; Tanjung Perak Port in Surabaya, East Java; and Makassar Port in South Sulawesi.

The new policy package will be part of the government's string of policy packages released since September 2015. Darmin has said that the policy packages will attract domestic and international investment.

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Transportation Minister Prepares Additional Airport Safety Measures
The Jakarta Post, 06/01/2017

Transportation Minister Budi Karya Sumadi said on Thursday that the ministry would prepare additional airport safety measures in wake of the intoxicated former Citilink pilot case.

Budi said, he had instructed the ministry’s director general for air transportation Suprasetyo, as well as the state airport authority to introduce new procedures to monitor safety concerns. Although, no new regulations would need to be implemented, the minister added.

“Among others, is the requirement to monitor via CCTV and to set preventive measures if there are officials or air crew members behaving suspiciously when they pass [security checks],” he said recently.

He stressed that the enforcement of standard operating procedures (SOP) was the obligation of each airline.

Regarding the Citilink case, a viral video on the internet showed pilot Capt. Tekad Purna visibly drunk, walking through the x-ray scanner unsteadily. The airport’s security officers were seen aiding him to pass and helped him gather his belongings.

Meanwhile, Suprasetyo said those officers had warned the station manager, yet the manager did not try to prevent Tekad from piloting his scheduled flight. The pilot was also cited to have skipped the required briefing before the flight. “Are we paying attention to how  [Indonesian airports] are being managed?” he said.

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Jokowi Praised for Returning Land Rights to Indigenous Communities
The Jakarta Globe, 06/01/2017

International environmental group Rainforest Action Network has praised President Joko "Jokowi" Widodo for recognizing customary land rights.

The president has returned more than 13,000 hectares to nine indigenous communities in Sumatra and Sulawesi.

This marks a win for the Tano Batak community in Pandumaan-Sipituhuta, North Sumatra, after decades of encroachment by Toba Pulp Lestari, an affiliate of the country's second largest pulp and paper producer Asia Pacific Resources International Holdings (APRIL) and Royal Golden Eagle Group (RGE).

"When customary rights are recognized, the communities can make the long-term decisions necessary for sustainable forest management," RAN's senior campaigner Brihannala Morgan said in a statement on Thursday (05/01).

Other forests returned to indigenous communities are: Ammatoa Kajang in Bulukumba, South Sulawesi; Wana Posangke in North Morowali, Central Sulawesi; Marga Serampas in Merangin, Jambi; Kasepuhan Karang in Lebak, Banten; and Bukit Sembahyang, Padun Gelanggang, Bukit Tinggai, Tigo Luhah Pementi Yang Berenam, Tigo Luhah Kemantan in Kerinci, Jambi.

The government is assessing 12.7 million hectares more of forest areas that will be given back to their customary owners, in a bid to enhance sustainable forest management and settle conflicts in the forestry sector.

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