Update New February 01, 2017

In The News

Gov`t Sets 10 Programs To Tackle Economic Inequality
Tempo, 01/02/107

Attempts in reducing the economic disparity have been the main focus of President Joko “Jokowi” Widodo and Vice President Jusuf Kalla administration. In the last two months, the Coordinating Minister of Economic Affairs, Darmin Nasution, has been ordered by the President to create a strategic plan that focuses on economic equality.

Darmin stated that the government has prepared 10 policies concerning an equal economy. “This doesn’t have to be implemented all at once. We’ll choose [to implement] a few first,” Darmin said on Monday, January 31, 2017.

The 10 policies include agricultural reform, agricultural land provisions, plantation, urban housing for the poor, seaweed for fishermen, and SME developments.

Other policies include traditional traders adjustments with retail stores, vocational training, and the implementation of progressive tax for multi-land owners. Lastly is the state budget expenditure that is focused on workfare programs.

The former Governor of Bank Indonesia (BI) explained that one of the policies, such as agricultural reform, has been regulated in the mid-term development plan (RPJMN) but the realization has not been implemented systematically. In the future, the government would not only provide equal opportunity but also direct capital funding.

Capital funding would be given to farmers and would prioritize farmers that do not own land or has a minute sized land.

Darmin explained that suppressing the economic inequality is needed even though the government has already implemented a number of deregulation and focuses on infrastructure development.

The Indonesian government continues improving the welfare and equality in order to prevent further economic disparity that is currently plaguing the global economy, Minister Darmin says.

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Jokowi Tells Ministers To Address Socioeconomic Disparity
The Jakarta Post, 01/02/2017

President Joko "Jokowi" Widodo has called on his Cabinet ministers to create a policy to address socioeconomic disparity in the country.

"All citizens should have the same opportunities without exception," he said during the opening of a closed-door Cabinet meeting at the Bogor Palace in West Java on Tuesday.

“In December 2016, I ordered the coordinating economic minister to compile a policy that eradicates the long-standing socioeconomic disparity,” the President added.

Although Jokowi acknowledged that the country's Gini ratio – the most commonly used measure of inequality in which zero reflects perfect equality and 1 reflects perfect inequality -- has decreased significantly since 2015, the government still had a lot of work to do.

According to the Central Statistics Agency (BPS), the country's Gini ratio dropped to 0.387 in March 2016 from 0.402 in September 2015.

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Government Allocates Rp 22.5t For Scholarships
The Jakarta Post, 01/02/2017

The government has allocated Rp 22.5 trillion (US$1.68 billion) for full scholarships managed by the Indonesian Endowment Fund for Education (LPDP) for students pursuing undergraduate and postgraduate degrees this year.

The figure is higher than the Rp 20 trillion allocated last year. When the program was introduced by the Finance Ministry five years ago the government only allocated Rp 1 trillion.

The government continually increases the budget for scholarships because more Indonesian students are eager to continue their education at higher levels, said Finance Minister Sri Mulyani in a speech during the opening of an LPDP education fair on Tuesday.

“This was also my dream back then [when I created the LPDP program] as I saw many neighboring countries were able to send their people and bureaucrats to schools worldwide to make their countries great,” she said.

During her tenure as finance minister under the Susilo Bambang Yudhoyono administration in 2010, Sri Mulyani initiated the allocation of education funds based on a mandate from the 1945 Constitution, which requires the state to allocate a minimum of 20 percent of its budget to education.

The LPDP scholarship has so far been awarded to a total of 16,000 recipients, including 1,500 alumni and 10,000 ongoing students, with European and United States universities being the most popular choices. For this year, the fund is preparing scholarships for 5,000 prospective recipients.

The LPDP held an education fair in a Finance Ministry hall on Monday and is slated to hold similar events in Surabaya, East Java, and Yogyakarta on Feb. 2 and 4, respectively.

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W. Kalimantan Capital Leads In Economic Governance: Survey
The Jakarta Globe, 01/02/2017

Simplified business licensing, enhanced infrastructure and a dedicated administration have contributed to Pontianak in West Kalimantan overtaking all other Indonesian provincial capitals in terms of economic governance, according to a survey released on Tuesday (31/01).

The survey, carried out by Jakarta-based Regional Autonomy Watch (KPPOD) in 2016, shows that Pontianak's economic governance index stood at 79.29, compared with the national average of 63.29. Forty companies in Indonesia's 32 provinces were involved in the survey.

Economic growth in Pontianak stood at 5.97 percent in 2014, compared with 7.86 the previous year. However, this was still higher than West Kalimantan's average of 5.08 percent.

"The region's economy is well-managed," KPPOD coordinating researcher Boedi Rheza said during a press conference in Jakarta.

Meanwhile, business licensing – one of the indicators used in the survey to determine the regional economic governance index – stood at a national average of 74.73, while Pontianak scored 87.27. 

The simplification of business permits and improved complaint mechanisms were among the "regional innovations" in Pontianak, the survey shows.

The Pontianak administration issued a regulation in 2015 to reduce a wide range of permits to only 17 types, while since 2016, company registration certificates (TDP) and permanent business trading licenses (SIUP) can be arranged simultaneously at the Integrated Permits Service Agency, or BP2T.

The survey also shows that the national average for infrastructure – another indicator used to determine economic governance indexes – stood at 60.66, while Pontianak scored 97.96.
One of the infrastructure projects the Pontianak administration has been developing in recent years is a 5-kilometer parallel road, which the survey says "bolsters connectivity among economic hubs."

Another indicator used in the survey is capacity and integrity of regional leaders. This saw Pontianak scoring 96.67, compared with the national average of 63.83.

"All the businesspeople view the mayor of Pontianak as a much-respected figure who is firmly opposed to corruption. Most of them also believe that the mayor does not act in his own interest and understands the business community," the survey says.

In 2016, the Indonesian Ombudsman declared Pontianak as the most compliant city in terms of public service standards. The survey also shows that Medan in North Sumatra had the lowest economic governance index of 45.99.

Pontianak's economic governance performance contrasts with that of Medan, which scored 45.41 on business licensing; 84.54 on infrastructure and 5.82 on capacity and integrity of regional leaders."Medan has yet to implement strategic plans for developing business," Boedi said.

However, Medan's economic growth has largely been above the average for North Sumatra in recent years, with the city recording 5.74 percent economic growth in 2015, compared with the provincial average of 5.1 percent.

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Central Java To Have Toll Roads Soon To Cut Down Traveling Time
The Jakarta Post, 01/02/2017

Central Java will soon have toll roads that cut down traveling time while offering breathtaking views for passing motorists.

Currently under construction, the toll road connecting Central Java’s capital of Semarang with the beautiful town of Salatiga will spoil motorists with scenic landscapes, majestic mountains and lush valleys.

The 22.8 kilometer Semarang-Bawen toll road and the 17.6 km Bawen-Salatiga toll road will take motorists along the slopes of the mountains in Ungaran as well as well as over the rushing streams of Tuntang and Rawa Pening rivers. Moreover, a tall, 360 meter-long bridge that straddles one of these rivers will offer another spectacular vista.

The construction stage of the Bawen-Salatiga toll road is expected to be completed by March.“The construction project is 81.26 percent complete and we hope it will be finished in March. Ideally, the toll road can be used by motorists traveling to their hometowns during the next Ramadhan exodus,” PT Trans Marga Jateng director for operations Ali Zainal Abidin said on Thursday.

PT Trans Marga Jateng is a private company co-owned by state-run toll road operator Jasa Marga and PT Sarana Pembangunan Jawa Tengah, a company owned by the Central Java provincial administration.

At present, the company’s workers are excavating and clearing land in the hilly regions of Kandangan and Polosiri, both in Semarang regency. They are facing the difficult task of clearing an opening on a 30 meter-tall hill in Polosiri.

“Weather conditions have often hampered our work there. When rain falls we have to stop work. Our target is to complete the toll road in one month,” the company’s manager for implementation oversight Togu H. Siringoringo said.

In Kandangan, the workers have to deal with a different problem: unstable ground.
The workers employ bored piling, a technique to drill a deep bore into the ground and fill it in with reinforced concrete, to deal with the problem.

As many as 198 bored piles have been placed at a depth of up to 43 meters in Kandangan and 18 meters in Polosiri.“Bored piling will stabilize the ground,” Togu added.

The Semarang-Bawen and Bawen-Salatiga toll roads are part of a 72.64 km-long network of toll roads connecting Semarang with Solo, the cultural center of the province.The network will be equipped with large rest areas with gas stations, convenience stores, restaurants and mosques.

This network in Central Java is part of a much larger network of planned toll roads that will span 652 km from Cikampek in West Java to Surabaya in East Java.

That network comprises the 321 km Cikampek-Semarang toll road, the 72.6 km Semarang-Solo toll road, the 178 km Solo-Mojokerto toll road and the 78 km Mojokerto-Surabaya toll road.

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China Interested in Establishing Direct Flight to W. Java
Tempo, 01/02/2017

The Executive Director of PT Bandara Internasional Jawa Barat, Virda Dimas Ekaputra, said that the Chengdu administration of China has stated its interest in establishing direct flight to Kertajati Airport of West Java Province.

"They were excited when they knew that the West Java administration was to build a new international airport in Kertajati of Majalengka District," Ekaputra said Tuesday, January 31.According to the director, the Chengdu administration has proposed the direct flight to Soekarno-Hatta Airport, Tangerang.

However, Soekarno-Hatta Airport could not accept their proposal due to the full flight slot. Ekaputra stated that all ASEAN countries, except Indonesia, have maintained the connection of their cities with Chengdu.

He hoped that the establishment of the airport in West Java Province could develop the tourism sector in the area.Thus, the company will cooperate with West Java Cultural and Tourism Department to promote tourism in the region.

"West Java would be one of the tourism destinations. The development would contribute to achieving 20 million foreign tourists," Ekaputra added.

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70 Percent Of Indonesian Villages Have Access To Internet
Antara News, 01/02/2017

The Indonesian Ministry of Village, Disadvantaged Region Development and Transmigration stated that approximately 70 percent of more than 74 thousand villages in the country had access to the Internet.

"Only 30 percent of the total villages in Indonesia have not had access to the Internet. We hope that all villages across Indonesian territory will have access to the Internet this year," Indonesian Minister of Village, Disadvantaged Region Development and Transmigration Eko Putro Sandjojo stated after the launch of an application for discussing ways to develop the village on Tuesday.

The application is android based and can be accessed as a forum of communication between village officials and facilitators for rural development.

The application was created under cooperation between the ministry and the Australian government.Through the application, village officials and facilitators can share information about the management of the village.

As many as four provinces have become models for implementing the application, namely Aceh, West Java, East Java and West Nusa Tenggara, the minister said.

"In future, this application will be accessed by the local community, so that they can also monitor the management of the village," he noted.

Sandjojo added that the application was expected to enable the facilitators to provide support and ideas more efficiently and effectively for rural development.

The application will particularly provide the latest data and information to the ministry."Using the right data, it is expected to establish the right policy anyway," he added.

The ministry can also use the application to monitor and analyze problems faced by every village to be discussed further. Through the application, the ministry can identify villages that require further support in implementing the Village Act.

The ministry can also use the application to provide guidance, regulatory updates and information to the village facilitators and authorities directly.

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Pertamina`s Consortium To Build Largest Gas-Fueled Power Plant In ASEAN
Antara News, 01/02/2017

State-owned oil and gas Pertaminas consortium, Marubeni Corporation and Sojitz Corporation, is ready to develop a gas-fueled electricity plant, the biggest one in Southeast Asia.

It will be developed through the gas-steam fueled power plant (PLTGU) Jawa 1 with a designed capacity of 1,760 megawatts (MW).

The Power Purchase Agreement (PPA) of the project was signed in Jakarta on Tuesday by Ginanjar, President Director of Pt Jawa Satu Power, in his capacity of the developer of PLTGU Jawa 1, and Sofyan Basyir, President Director of state-owned electricity company PLN, It was witnessed by Pertamina President Director Dwi Soetjipto.

During the signing of the agreement, Soetjipto expressed appreciation to PLN for the implementation of the Independent Power Producer (IPP) tender of the PLTGU Jawa 1.

The Pertamina president director appreciated the trust given to the Pertamina consortium to win the tender which was held openly, transparently and in a competitive manner.

"This project is a concrete synergy between two large Indonesian state companies, Pertamina as an energy company and PLN as a national electricity firm," Dwi stated.

Pertamina, along with Marubeni Corporation and Sojitz Corporation, has been successful in having signed and won the PPA of the IPP PLTGU Jawa 1 project with a value of about US$1 billion.

The IPP project constitutes an international collaboration involving 18 international partners (Indonesia, Japan, South Korea, the United States and Europe) and domestic partners.

He noted that the signing of the PPA is an important basis for Pertamina in starting an IPP business and in affirming its position as a world-class energy company.

Pertamina also appreciated the cooperation among all the consortium partners, including creditor consortium, to obtain trust."Close cooperation is needed to realize this project on time and for the correct calculation of cost," he added.

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Bulog Ready To Develop Post-Harvest Infrastructure
Antara News, 01/02/2017

State-owned logistics board (Bulog) is ready to invest to develop post-harvest infrastructure this year in a bid to improve the farmers production quality, notably of rice, maize, and soybean.

Bulog President Director Djarot Kusumayakti stated in Jakarta on Tuesday that the farmers had, so far, faced difficulties in improving the quality of their harvest due to the absence of post-harvest infrastructure facilities in villages.

The infrastructure facilities needed by the farmers include harvesting equipment, rice hullers, drier machines, silos to store unhulled rice, and packing machines.

"This year, Bulog will receive Rp2 trillion in the form of state participation capital (PMN) from the government that will be used as investment for developing post-harvest infrastructure for rice, maize, and soybean," he noted.

Djarot said the PMN funds would be utilized to build a modern integrated rice milling plant, with a capacity to process one million tons of equivalent hulled rice in production centers.

The rice milling facility will use drying technology to be supported by 22 drying centers, 17 milling facilities, and 80 silos. "This is to reduce post-harvest shrinkage, increase the quantity of unhulled rice, and improve the quality of rice yields," he noted.

A rice-to-rice machine facility will also be built, with a capacity of 250 thousand tons per annum, to process rice based on the desired quality.

The logistics board will also build 11 drying centers; 64 maize silos, with a total capacity of 192 thousand tons; and 13 soybean storage warehouses, with a capacity of 45 thousand tons, in the production centers.On the occasion, Djarot denied rumors that Bulog is reluctant to purchase the farmers rice or maize due to inferior quality.

He said whenever a complaint is received that Bulog is reluctant to buy the farmers rice during the harvest period, he directly sends a team to investigate the case.

In fact, the rice offered by the farmers to us was spoiled due to wind or rain and only contained lime while his side had to sell it in the form of rice, he noted."We do not have the courage to buy it because we do not have adequate dryers," he pointed out.

Hence, by installing adequate post-harvest infrastructure facilities, Bulog is optimistic that it would be able to increase its capacity to absorb the farmers rice stocks, he remarked.

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Govt Advised To Set Up 10 Authorities To Promote New Tourist Destinations
The Jakarta Post, 01/02/2017

The government has been advised to immediately establish tourism authority boards for 10 destinations touted by President Joko “Jokowi” Widodo as future hubs for tourism.

The call was made by members of the Regional Representatives Council (DPD) Committee III, which oversees tourism, when they met with Tourism Minister Arief Yahya on Monday.

“The establishment of tourism authority boards across the 10 tourist destinations will help to boost the number of tourists,” the DPD committee stated in its recommendation letter issued during the meeting.Arief admitted that his ministry had not followed up on the planned establishment of the 10 authorities.

The ten destinations are Lake Toba in North Sumatra, Bromo in East Java, Mandalika in West Nusa Tenggara, Tanjung Lesung in Banten, Morotai in Maluku, Thousand Islands regency and Yogyakarta, among others.

This year, Indonesia hopes to welcome 15 million foreign tourists. Last year, tourism generated Rp 172 trillion (US$12.89 billion) in national revenue.

The committee advised the President to issue a presidential decree to make sure that other ministers offered their full support for the development of the tourist industry.

The committee also recommended the establishment of more institutions to help develop human resources in tourism.

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