Update News February 02, 2017


In The News



ADB Projects Indonesian Economy to Grow 5.1% in 2017
Tempo, 02/02/2017

The Asian Development (ADB) projected that Indonesia's economy will grow by 5.1 percent this year, higher than last year's 5.0 percent growth. Indonesia's economy will be supported by improved private investments and strong consumption.

The ADB also estimated that Indonesia's inflation rate in 2017 will increase to 4.0 percent from last year's 3.5 persen."I'm very impressed with the government's commitment to reform policies, which increases the market's trust," ADB president Mr. Takehiko Nakao wrote in a statement on Wednesday, February 1, 2017.

Today, Mr. Nakao met President Joko Widodo. Nakao reiterated ADB's support for the government's commitment to achieve financial inclusion. Mr. Nakao will also meet with Sri Mulyani and National Development Planning Minister Bambang Brodjonegoro during his two-day visit to Indonesia.

In a discussion with President Widodo, Nakao lauded the government's economic policies in facing global uncertainties.
Since September 2015, Indonesia has released 14 policy packages aimed at increasing investment, improving competitiveness, and diversifying the economy.

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Gov`t Targeting Investment Growth of 8 Percent
Tempo, 02/02/2017

The government is targeting investment growth of 8 percent for 2018 in a plenary Cabinet meeting at the Presidential Palace on Wednesday, February 1, 2017.

“We expect to see a higher investment growth. We have seen 5 to 6 percent growth, we are now aiming for 8 percent growth,” the Minister of National Development Planning Bambang Brodjonegoro told reporters at the Presidential Palace.

Bambang said that it would not be easy to achieve investment growth above 6 percent. However, the government is committed to improving the investment climate by developing investment-worthy sectors and deregulation to promote investment, among others.

Bambang went on to say that the government has named three priority industrial sectors for investment: processing, tourism and agriculture.

“Investment will stroke economic growth. Basically, we are prioritizing measures to facilitate and improve investment, including budget allocation,” Bambang said.

The Investment Coordinating Board (BKPM) chairman Thomas Trikasih Lembong said that deregulation is key to boost investment up to 8 percent.

Lembong hints at dangers of future U.S. policies against investment climate in Indonesia. The former Trade Minister said that President Donald Trump will not only issue deregulation policies but also make breakthroughs, such as the America First in a bid to woo investors.

Indonesia Investment realization in 2016 reached Rp612.8 trillion or 103 percent of the target of Rp594.8 trillion. The figure represents a 12.4 percent growth compared to investment realization in 2015 of Rp545.4 trillion.

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Three Companies Received WCO of Merit 2017
Tempo, 02/02/2017

PT Cipta Krida Bahari (CKB Logistics) has received WCO Certificate of Merit 2017 as the recognition of the authorized economic operator (AEO) status to the customs service operator.

Chief Operation Officer (COO) of CKB Logistics Ety Puspitasari said that the company is grateful for the recognition given by the Finance Ministry’s Directorate General of Customs and Excise (DJBC) and the World Customs Organization (WCO).

“The recognition reflects our excellent performance in providing accurate, detailed, credible data, as well as customs compliance,” Ety told a press conference on Wednesday, February 1, 2017.

The WCO also gives the same recognition to two other companies: Toyota Motor Manufacturing Indonesia and Panarub Industri for exporter operator category.

AEO certification is a DJBC’s initiative recognized by the WCO. According to Ety, AEO certification will help CKB Logistics in export-import transactions. The KCB Logistics is among the providers at the bonded logistics center.

Speaking at the International Customs Day on January 30, Finance Minister Sri Mulyani lauded the DJBC’s for its accurate analysis of the data at hand.

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Indonesian Manufacturing Industry Improves, PMI Survey Reveals
The Jakarta Globe, 02/02/2017

Indonesian manufacturers scaled up output in January due to a rebound in new orders, indicating that the health of the industry has improved after months of contraction, the Nikkei Indonesia Manufacturing purchasing managers' index survey revealed.

The PMI — a composite of manufacturing output, new orders, exports and employment measures to give a snapshot of manufacturing business conditions — increased to 50.4 in January, up from 49 in December.

"PMI data showed that the upturn was domestically driven as new export orders dipped again," Pollyanna De Lima, an economist at IHS Markit, said in a note on Wednesday (01/02). A reading above 50 indicates a increase in overall manufacturing activity and, inversely, index of below 50 reflects decline.

The survey participants — which include over 300 industrial companies — said that increased marketing and client confidence resulted in a rise in orders despite a contraction in export orders from international clients for the fourth straight month.

Inventory of manufactured goods remained unchanged according to survey participants. However, pre-production inventory fell as new orders were obtained.

Participants postponed buying input materials due to a sharp increase in costs. The note underlined that average raw materials costs rose in January.

Some companies compensated by passing the cost burden to clients, which resulted in an increase in retail prices.

Employment also slightly fell in January on the back of technological advancement in some factories and a constant outstanding business decreased for the thirty-second consecutive month.

"Looking ahead, the trend for trade will remain challenging given so much uncertainty in the global economy," De Lima said. Still, the economist noted that Bank Indonesia's lower interest rates will be able to "fuel" consumer spending.

Overall, manufacturers' sentiment improved in January, the note said, with 82 percent of the survey participants expecting higher output in the year ahead.

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VP Receives British Member Of Parliament Lord Powell
Antara News, 02/02/2017

Vice President Jusuf Kalla received British Member of Parliament Lord Charles Powell to discuss the investment climate and the global situation in Indonesia.

"In addition to investment, we discussed the developments in Indonesia, Britain and the US.," Kalla said, after the meeting at his office here, on Wednesday.

Besides being an independent member of the Supreme Council of the British parliament, Lord Powell is also one of the executives of Jardine Cycle & Carriage that holds largest shares in Astra International.

Kalla noted that no technical issues had been discussed with Lord Powell regarding business expansion or plans to increase investment value.

"No, there was no such discussion. We did not talk about technical aspects, as Astra has already developed. He praised the current investment situation in Indonesia," Kalla added.

Kalla and Lord Powell also discussed political and economic conditions in Britain following its decision to leave the European Union."Yes, of course. For him, it was an issue that had to be settled, just like technical problems, namely divorce settlement, wealth division and others," he remarked.

Regarding the current world situation following the political developments in the US due to President Donald Trumps policies, Kalla noted that just like in Indonesia, businessmen in Britain could only wait and watch while anticipating the possible impacts of Trumps policies.

"We all can only guess what Trump would likely do. No one in the world knows that except himself," he stated.

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Five MRT Stations To Be Integrated With Transjakarta Bus Stops 
The Jakarta Post, 02/02/2017

PT MRT Jakarta has plans to integrate five of its 13 commuter train stations with the bus stops of city-owned company Transjakarta.

The MRT stations are located at Lebak Bulus, Blok A, Sisingamangaraja and Dukuh Atas in South Jakarta, as well as at the Hotel Indonesia traffic circle in Central Jakarta.

“We have coordinated this with PT Transjakarta and the plan is feasible,” PT MRT Jakarta project manager Heru Nugroho said on Wednesday.

The city's first MRT is expected to carry nearly 200,000 passengers per day.  It is therefore expected to effectively reduce congestion in the capital.

The MRT was initially scheduled to be in operation by 2018 but the project has been hampered by land acquisition issues. The MRT is now expected to open in March 2019.

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Transjakarta To Install Four Elevators On Elevated Corridor
The Jakarta Post, 02/02/2017

City-owned bus operator Transjakarta plans to install four elevators on its corridor 13 elevated route. The route, which is still being constructed, intends to connect Blok M in South Jakarta to Ciledug in Tangerang.

Transjakarta CEO Budi Kaliwono said that the four elevators would be built at the CSW and Velbak shelters, both in South Jakarta.“We are currently taking measurements and procuring the elevators. Later on, the elevators will be operated concurrently with the initial operation of corridor 13 on June 22,” Kaliwono said Tuesday, as quoted by wartakota.tribunnews.com.

The company will also construct a 50-meter-long bridge to connect CSW bus stop to a MRT station. However, the bridge’s construction will only begin in June as the MRT’s operation is set for March 2019.

Meanwhile, Bina Marga road agency's overpass and intersection division head Heru Suwondo said the construction of the corridor 13 route was 99.5 percent complete.Heru expressed that it was hoped construction would be completed by the end of February.

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W. Java Plans Four New Toll Roads
Antara News, 02/02/2017

West Java Provincial government plans the construction of four new toll roads, including those heading to Patimbang harbor, Subang sub-district, the Kertajati Airport route, Geopark Ciletuh route, as well as Cileunyi-Garut-Tasikmalaya route.

"The new toll roads will hopefully connect the strategic projects that are currently being developed in the province," West Java governor Ahmad Heryawan said in Bandung on Wednesday.

He further stated that the toll road linking Patimban harbor will be 20 kilometers in length, and it will be an interchange from the Cipali toll road to Patimban, Subang.

"As for the toll road linking Kertajati Airport in Majalengka, the provincial government is designing an interchange from the Cipali toll road to Kertajati, which will be 7 kilometers in length," he noted.

As for the Jagorawi-Palabuhan Ratu route, the toll road will be 50 kilometers long, and part of the expansion of Geopark Ciletuh recreational center will be connected to the Bogor-Ciawi-Sukabumi toll route, he added.

M Guntoro, Head of the West Java spatial planning office, said that the construction plan for four new toll roads has been included in the list of 14 existing toll roads in the province, and it has been submitted to the Public Works and Public Housing Ministry as a national strategic project.

"Hence, we submitted the plans for selection by the central government in the national strategic toll road project. It is important to have the plans received in the Ministry as an initial step, and this way they can considered," he remarked.

Earlier this month, President Joko Widodo said that the development of infrastructure and transportation to boost inter-regional connectivity will remain the governments priority in 2017.

"As we enter 2017, I would like to once again reiterate that the development of infrastructure and transportation that ensures connectivity between areas, islands and especially rural regions will remain the governments priority," Jokowi stated at a closed-door meeting in the State Palace Complex in Jakarta on Jan 5.

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Indonesia Offers High-Speed Train Project To Japan
Antara News, 02/02/2017

The Indonesian government has offered its Japanese counterpart to review the medium-speed train project to be developed as a high-speed train network on the Jakarta-Surabaya route.

"It is possible for us to develop the high-speed train project if we can construct the elevated railway track," Transportation Minister Budi Karya Sumadi stated here on Wednesday.

According to the minister, the option is offered to Japan, as the construction of a normal railway line will be difficult due to the presence of several railroad crossings that pose a danger to medium-speed trains.

Sumadi noted that there are at least 1,000 railroad crossings on the route between Jakarta and Surabaya.Moreover, the government should construct a double track and displace railroad crossings as well as set up overhead electricity lines.

Hence, the Indonesian government has offered its Japanese counterpart, as the investor, to review the construction plan to upgrade the project to an elevated high-speed train network."President (Joko Widodo) is evaluating the efficiency of both the medium-speed and high-speed train networks," Sumadi added.

Sumadi said Indonesia should conduct a detailed study on both options, as developing transportation infrastructure is a long-term project.

The minister said Indonesia is seeking a private company to fund the high-speed train project, as the cost will be doubled for building an elevated railway network.According to Sumadi, total investment worth Rp80 trillion is needed to develop the medium-speed train project.

The Agency for the Assessment and Application of Technology, along with the Japan International Cooperation Agency, are still reviewing the proposal to convert the medium-speed train network to a high-speed train link
.
Trains on the high-speed network can reach speeds of 350 kilometers per hour, while the medium-speed trains can only reach 160 kilometers per hour. Hence, to ensure safety of the railway network, the train operator needs to avoid railroad crossings.

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Uber Eyeing Cooperation with Local Taxi Companies
Tempo, 02/02/2017

Uber Indonesia is exploring opportunities to establish cooperation with more local taxi firms, having joined forces with local taxi company Taksi Express.

John Colombo, Head of Public Policy and Government Affairs Uber for Indonesia, said that at the end of last year Uber agreed to cooperate with local taxi company PT Express Transindo Utama Tbk or Taksi Express to serve customers using Uber X services. However, John said that UberX the service is still in a trial period.

“Uber is an app company for individuals who have their own cars to join a cooperative providing transportation services. So we are not against cooperating with local taxi [companies],” John Colombo said at Uber office in UOB Plaza on Wednesday, February 1, 2017.

He said that Uber Indonesia is welcome to cooperatives or other legal entities to join its transportation businesses.“We are aiming to cooperate with at least one cooperative in every city, but we could aim for more, the door is wide open,” John said.

Bisnis Indonesia reported that PT Expres Transindo Utama Tbk (TAXI) shares saw a significant gain on 19 December trading. The company’s collaboration with Uber has been responded positively by the market.

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Blue Bird Taxi Becomes Go-Car Partner
The Jakarta Post, 02/02/2017

Publicly listed taxi operator Blue Bird has finally provided its fleet to partner with the Go-Car ride-hailing app, a charter car service from Go-Jek, in the Jakarta area.

The collaboration is a follow-up to the memorandums of understanding (MoU) both companies signed last year."The collaboration [with Blue Bird] will add to the Go-Car fleet in Jakarta," Go-Jek Indonesia CEO Nadiem Makarim said in an official statement.

Users can also pay the Blue Bird taxis working with Go-Car through its cashless transaction service, Go-Pay, Nadiem said, adding that users just had to update their applications from either Appstore for iOS users, or Play Store for Android users to enjoy these services.

Meanwhile, Blue Bird director Andre Djokosoetono said the cooperation was a response to public demand. "This collaboration shows that Blue Bird will keep innovating along with the technological development to better serve customers," he said.

Blue Bird, the country’s biggest taxi company, saw a steep decline of 42.3 percent in its profits to Rp 360.8 billion (US$27 million) from January to September last year, compared to in the corresponding period in 2015.

Revenues were also down 10 percent to Rp 3.6 trillion last year, compared to the 17.6 percent hike in the previous year in the same period. Financial analysts have attributed the dwindling income to the competition from ride-hailing services.

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Fishermen Support Jakarta Reclamation Project: Developer 
Tempo, 02/02/2017

Most residents and fishermen of Muara Angke support the reclamation project in North Jakarta, according to Chief Executive Officer of the project developer PT Muara Wisesa Samudra (MWS) Halim Kumala.

Halim Kumala noted that the residents of Muara Angke had lent their support to the project after the environmental impact analysis (Amdal) was made public by the government and developer PT MWS on Tuesday night (Jan 31).

Kumala said when contacted in Jakarta that in general, the process to raise public awareness on Amdal had run smoothly."The event was successful. There were positive and negative reactions. We have taken a note of them all.

However, about 90 percent of Muara Angkes residents support the reclamation project," Kumala pointed out.However, the residents have urged the government and developer to focus on increasing their prosperity and not evicting them.

According to Kumala, the developer has no plans to evict Muara Angke`s residents.Muara Angke is a well-known fishermens village in North Jakarta, which is believed to be significantly affected by the reclamation project in the North Jakarta coastal area.

He revealed that the campaign to raise awareness on the project was marked by a demonstration staged by several students from the high economic institution, Depok, West Java.

The protestors rejected the North Jakarta reclamation project, but the rally did not hinder the implementation of the awareness program.

MWS Project Manager Andreas Leodra affirmed that the MWS was obligated to raise awareness on the analysis in a bid to complete the Amdal process of the reclaimed Pulau G as necessitated by a government regulation.

Chairman of the Indonesian Fishermens Association for Jakarta Yan Winata Sasmita said he had participated on 18 occasions to raise awareness on Amdal, a program similar to what the MWS had introduced on Tuesday night.

Sasmita finally accepted the Amdal with certain conditions.One of the pre-requisites is that the government and developer would honor the commitment they had made during the awareness program."Hence, we have to supervise it together," he emphasized.

Rais Abdullah, one of the youth leaders who also spoke to the students, said he could accept the explanations given by the developer.He noted that so far, the residents were only concerned if they would eventually be evicted from their village.

Hence, he urged the residents to work hand in hand in supervising the responsibilities undertaken by the developer as part of the commitment.

"If the governments project really benefits the residents of Muara Angke, we must support it. What is important is that all is under control and handled in a fair and just manner," he added.

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Jakarta Launches Mobile Laboratories, Monitor Food Distributions
Tempo, 02/02/2017

Acting Jakarta Governor Sumarsono launched six units of mobile laboratories operated by the Jakarta Maritime, Agriculture and Food Resiliency Agency to watch unhealthy food distributions.

According to Sumarsono, the launch of the mobile laboratories is aimed at detecting food containing toxic and harmful materials."We want to detect illegal food ingredients, such as formalin, borax, and other chemicals through the services provided by the mobile laboratories," Sumarsono said at the City Hall in Jakarta on Wednesday, February 1, 2017.

Sumarsono explained that the mobile laboratories would serve a function to protect consumers, particularly children.

"Children are particularly attracted to colorful foods, which their safety is often questionable," Sumarsono added. Sumarsono revealed that efforts to monitor foods included operations to be conducted at 154 markets this year.

Jakarta Maritime, Agriculture and Food Resiliency Agency head Darjamuni said that the mobile laboratories will operate on a daily basis. "The target is to test 47,740 samples in a year," Darjamuni revealed.

Therefore, Darjamuni said that the mobile laboratories will take 24 samples of agriculture products, 15 samples of meat products, and 23 samples of fish products on a daily basis.

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Gov’t to Issue Temporary Export Permit for Freeport
Tempo, 02/02/2017

Coordinating Minister for Maritime Affairs Luhut Binsar Pandjaitan said that the temporary special mining business permit provided for PT Freeport Indonesia would be the best solution to address mineral export issues.

Luhut provided the comment after receiving explanations from Energy and Mineral Resources Minister Ignasius Jonan."I have asked Minister Jonan. He said that it is the best temporary solution for Freeport," Luhut said at his office in Jakarta on Wednesday, February 1, 2017.

According to Luhut, Freeport would not be able to export mineral concentrates without the temporary permit, since the Freeport's permit change from the contract holder to the special mining business permit would take a long time.

Luhut explained that the temporary permit would only last for six months before the real permit is issued. Luhut also dismissed that the status change could be completed within 14 days.

The Energy and Mineral Resources Ministry will soon issue a temporary special mining business permit for Freeport in order to facilitate the giant mining company to export mineral concentrates during the transition.

Luhut also dismissed a rumor that the temporary permit was issued to accommodate Freeport's interests. Luhut clarified that the move was taken to accommodate general interests.

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Indonesia, Australia To Hold Third MCM On Law And Security
Antara News, 02/02/2017

Indonesia and Australia again committed to enhancing relations in the fields of law and security by organizing the third Ministerial Council Meeting (MCM) on Law and Security in Jakarta on February 2, 2017.

Coordinating Minister for Political, Legal, and Security Affairs Wiranto has been appointed as head of the Indonesian delegation, while Australian Attorney General Senator George Brandis is the head of Australias delegation.

At the meeting, the two countries will hold talks on several issues, including counterterrorism, cybersecurity, and maritime security, as quoted from a statement released by the Coordinating Ministry for Political, Legal and Security Affairs on Wednesday.

In line with strengthening cooperation in the law sector, both countries will review the cooperation among law enforcement personnel.

Through the third MCM meeting, Indonesia and Australia have agreed to enhance mutual understanding on issues relating to law and security, a common concern for both countries.

It is a commitment of both nations to maintain security and stability and create prosperity in the region. Such a commitment will be comprehended at the end of the meeting in the form of a Joint Communiqu.

The meeting will also be attended by Indonesian Attorney General HM Prasetyo, Minister of Communication and Information Rudiantara, Military Chief General Gatot Nurmayanto, Police Chief General Tito Karnavian, Head of the Indonesian Intelligence Agency Budi Gunawan, and Head of the Counter Terrorism Agency Commissioner General Suhardi Alius.

Head of the Financial Transaction Report and Analysis Centre Kiagus Ahmad Badaruddin and Head of the Anti-Drugs Agency Commissioner General Budi Waseso will also attend the meeting.

Australian Minister of Justice Michael Keenan and Australian Minister of Cyber Security Affairs Dan Tehan will attend the meeting as members of the Australian delegation.

Indonesia-Australia MCM on Law and Security is a forum for holding ministerial-level meetings, the first edition of which was held on December 21, 2015, in Jakarta and the second in Sydney on June 8, 2016.

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