Update News February 09, 2017

In The News

Gov't Projects Six Percent Growth for 2018  
Tempo, 09/02/2017

The government has set a target of six percent economic growth for 2018. "[The target] moved to six percent for next year, it makes sense," said Coordinating Minister for Economic Affairs Darmin Nasution at the CSIS office on Wednesday, February 8, 2017.

Darmin said that in an effort to achieve the target, the government will start to push for economic growth. This year, Darmin stated, the government has set a target of 5.2 to 5.4 percent economic growth.

The numbers are higher compared to the target set in the 2017 State Budget, which is only 5.1 percent. Darmin said that he is feeling optimistic because the 5.1 percent target was set without taking into considerations new policies that will be implemented in 2017.

Darmin added that the government will issue several economic policies on infrastructure development, industry upstreaming, and improving human resources quality through education and training. Darmin expected the new policies would help to drive economic growth above the baseline.

In addition, Darmin said that the government will issue policies related to agrarian performance and allocate lands to the public by employing cluster systems. Darmin hoped that those lands can be more productive and help to improve the economy.

Previously, Finance Minister Sri Mulyani said that Indonesia is capable of maintaining steady economic growth compared to other G20 member countries.

"On average, in one decade, compared to other countries, [Indonesia] is relatively capable of maintaining growth level," Sri said during her keynote speech at the CIMB Forum event on Thursday, January 26, 2017.

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Tax Revenue Expected to Grow 16.8 Percent: Finance Minister
Tempo, 09/02/2017

The Minister of Finance Sri Mulyani is targeting 16.8 percent growth in tax revenue from last year. The government has formed the Tax Reform Team to achieve it. The team is tasked with establishing a stronger basis of human capital, information technology and business process.

“As well as the laws and regulations,” Minister Sri Mulyani said yesterday.

According to the former World Bank director, among the challenges faced by the government this year is to increase tax revenue. However, Sri is optimistic that the growth of manufacture and trade sectors this year will become the major drivers of improved tax revenue.

Moreover, service sector will also contribute to tax revenue from financial sector. “The contribution of agriculture, mining and fishery [sectors] is still low. The contribution of property and construction is a long way off to tax [revenue],” Sri added.

In the 2017 state budget (APBN), the government is targeting Rp1,498.87 trillion in tax revenue. The government will mainly focus on maintaining and building on the tax base this year.

“We will study the data and identify the individuals, subjects and objects of tax. In order to expand the tax base,” Sri said.

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Indonesia Seeks To Enhance Trade, Investment With Mozambique
Antara News, 09/02/2017

Indonesia is keen to intensify trade and investment cooperation with Mozambique following Foreign Affairs Minister Retno Marsudi’s visit to the African country on Tuesday (Feb. 7).

"Businessmen from Indonesia and Mozambique should utilize all opportunities to revitalize trade and investment relations, which had weakened last year," Minister Marsudi stated during an Indonesia-Mozambique business forum in Maputo, Mozambique, as quoted by the ministrys official website here on Wednesday.

At the forum, Minister Marsudi highlighted the economic reforms in Indonesia and offered several Indonesian industry products to Mozambique, such as railway carriages, since the latter is developing its railway transportation infrastructure.

Railway carriages made in Indonesia are of good quality and have been exported to several countries, Marsudi remarked.

"Indonesia is ready to support the railway transportation system being built by Mozambique," the minister noted.

Marsudi also offered cooperation to process Mozambiques cotton products in Indonesian textile companies and expected to further enhance cooperation through the transfer of capacity and investment cooperation in the textile industry.

"Mozambique requires several strategic industry products, and I believe Indonesian companies are ready to cooperate," Marsudi stated.

More than 50 business enterprises of Mozambique attended the forum to explore opportunities.The enterprises expressed interest in some products, such as the railway carriages of Indonesian state-owned train manufacturer PT. INKA and cargo ships of state-owned ship builder PT. PAL.

African enterprises also showed interest in the tourism industry to develop tourism islands and travel agencies. One of the challenges faced in the cooperation with Mozambique was financing, Marsudi pointed out.

The representative of Indonesia Eximbank received a warm welcome during the forum by the businessmen and government representatives of Mozambique to offer financing assistance.

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Portugal Interested In Increasing Cooperation With Indonesia
Antara News, 09/02/2017

The government of Portugal is keen to intensify cooperation with Indonesia, particularly in the political, economic, and cultural sectors.

"I made a courtesy call to Vice President Jusuf Kalla to express our interest to increase bilateral cooperation in the political, economic, and cultural sectors, among others," Portugal Ambassador to Indonesia Rui Fernando Sucena do Carmo stated here on Wednesday.

Carmo met Kalla at the Vice Presidents office in Jakarta on Wednesday morning. According to Deputy Secretary for Policy Affairs to the Vice President Dewi Fortuna Anwar, Carmo met Kalla to boost political diplomacy and maintain cultural relations. Anwar pointed out that Indonesia and Portugal have a long-standing history of sound relations. Several Indonesian presidents had visited the country located in Western Europe, such as Soekarno in 1960 and Susilo Bambang Yudhoyono in 2014.

The president of Portugal had also visited Indonesia in 2012 to increase relations and cooperation. Both countries could develop potential opportunities in the investment and trade sectors, Anwar remarked. The Investment Coordinating Board noted that Portugal had invested US$500 thousand in a project in 2015. Additionally, the total trade value between Indonesia and Portugal in October 2016 reached $159.85 million. The value decreased as compared to $187.56 million recorded in 2015.

Some 25,100 Portuguese visited Indonesia in 2015, while 176 Indonesians visited Portugal.

"Hence, they expressed hope that Indonesian businessmen would also invest in Portugal," Anwar pointed out.

Diplomatic relations between both countries were restored on December 28, 1999, after the Timor Leste issue was resolved. Currently, both countries are intensifying relations and supporting each other at the global level, particularly in the European Union.

"Both countries should take further steps, particularly for increasing economic relations," Anwar added.

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Gov't Accelerates Land Certification Program  
Tempo, 09/02/2017

Land and Spatial Planning Minister Sofyan Djalil said that the government is in the process of accelerating the land certification program to allow all lands across Indonesia to be registered and certified in 2025.

"This year, we have set a target to certify 5 million patches of land," Sofyan said to Tempo on Wednesday, February 8, 2017.

Sofyan added that the certification program is free of charge. However, landowners will still have to pay for duty stamps and land measurement fees. Sofyan added that the certification program would help small businesses.

Sofyan said that many small businesses are unable to expand because of a lack of capital. By applying for land certificate, small businesses would be able to use their lands as collateral and apply for a loan in banks.

Sofyan explained that certified lands will be provided with a registration number, which can be accessed through the National Land Agency online portal.

"All you have to do is get to a computer, on what village [is the land], who owns it, what is the topography, all of this information will be available," Sofyan said.

Sofyan added that the certification program will also help to prevent land conflicts and can help in achieving financial inclusion.

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Land Acquisition For Trans-Sumatra Toll Road Project Reaches 75 Percent
Antara News, 09/02/2017

The land acquisition for the Trans-Sumatra Toll Road (JTTS) project, notably the 140-kilometer Bakauheni-Terbanggi Besar Section, has reached only 75 percent.

"We hope that land acquisition for the Lampung section (Bakauheni to Terbanggi Besar) of the JTTS project would be finished in March 2017," Adeham, chairman of the JTTS Acceleration Team, stated here on Wednesday.

He noted that Lampung Province is focusing on completing the land acquisition process for the toll road project by mid-March.

Last month, House Speaker Setya Novanto had expressed hope that the construction of the Lampung section of the JTTS would be completed before the Asian Games in 2018.

"I hope the toll road would be finished on time. I entrust the construction of the project to the consortium of State-owned Enterprises (SOEs)," the house speaker remarked here on Thursday.

He stated that the SOEs forming the consortium include PT Pembangunan Perumahan, PT Waskita Karya, PT Wijaya Karya, and PT Adhi Karya.

Novanto also lauded President Joko Widodo (Jokowi) for directly reviewing the progress of the toll road project.

"The construction of the toll road has been running well, and it seems that the project would be finished on time," he noted.

Synergy among the SOEs, government, and House, in its capacity as the supervisor, has made this possible, he pointed out.

Novanto affirmed that his side will support the progress of the toll road development, including its budget, so that the project will run smoothly in the interest of the people and the state.

"The construction of the toll road aims to boost the peoples prosperity and accelerate development in Sumatra," the house speaker remarked.

Regarding the budget for the development of the toll road, Novanto said some Rp13 trillion of the Rp23 trillion budget had yet to be made available. The government, through the finance minister, is expected to settle and maximize the funding for the toll road project.  The Houses commissions will also discuss the available funds for the project.

"We will, in the near future, discuss it with the finance minister and the Houses budgetary body," he emphasized.

The first phase of the JTTS spans 140.41 kilometers from Bakauheni, South Lampung, to Terbanggi Besar, Central Lampung. It is part of the JTTS project. The groundbreaking for its construction was done by Jokowi on April 30, 2015. It is expected to be completed before the 2018 Asian Games.

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Skytrain to connect terminals at Soekarno-Hatta airport
The Jakarta Post, 09/02/2017

Soekarno-Hatta International Airport in Tangerang, Banten, will be equipped with a driverless train connecting its three terminals. Operation of the so-called skytrain is expected to commence in June.

Initially, two train cars with a capacity of 176 people will connect Terminal 2 and Terminal 3, according to state-owned airport operator PT Angkasa Putra II (AP II).

“Meanwhile, in August, the skytrain will be fully operational, with three trains with a capacity of 528 people connecting Terminal 1, Terminal 2 and Terminal 3,” AP II president director Muhammad Awaluddin said in its press statement on Wednesday.

He added that the headway of the skytrain would be 5 minutes, with 7 minutes needed to get from Terminal 1 to Terminal 3.

Passengers could access the schedule for skytrain arrivals on their smartphones through the Indonesia Airport application, he added.

“As Soekarno-Hatta will be turned into a transit airport, the skytrain [is important to] help passengers move easily between Terminal 1, Terminal 2 and Terminal 3,” he said, adding that the train would move at 60 kilometers per hour and would be equipped with automated guideway transit (AGT) technology.

Investment for the project is estimated at Rp 950 billion (US$71.25 million), which includes the construction of infrastructure and the procurement of moving stock.

The skytrain itself is built by state-owned company PT LEN in cooperation with Woojin from South Korea, while the infrastructure will be handled by state-owned construction company PT Wijaya Karya Tbk and PT Indulexco.

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Pontianak Starts Bus Rapid Transit Trial Period
The Jakarta Post, 09/02/2017

Pontianak, the capital city of West Kalimantan province, has commenced a trial run for its bus rapid transit (BRT), operating five buses to serve the city’s students.

Each of the 30-seat buses is equipped with air conditioners and a sound system. The buses will offer free Wi-Fi in the future. Operating under the Trans Pontianak Khatulistiwa, the BRT service is managed by the local transportation agency.

Agency head Utin Srilena Candramidi said the trial period would run up to three weeks and the five buses were designated to serve students of two junior high schools: SMP 10 and Madrasah Tsanawiyah Negeri 2. The buses operate from 5 a.m. until 12 p.m.

“The bus service is free during this trial period,” she said. “The public could use the service after it completes its task of transporting the students,” she said.

The agency had requested six more buses from the Transportation Ministry in Jakarta. The Pontianak administration has renovated seven bus stops to provide a better experience for passengers. Students living far away from the bus stops are allowed to decide their pick-up and drop-off points.

The introduction of the BRT service is warmly welcomed by parents, particularly because junior high school students are prohibited from riding motorbikes to school. The prohibition was reaffirmed September last year by the local police in an effort to curb traffic accidents.

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Gov't Explore Options to Finance LRT Project  
Tempo, 09/02/2017

Finance Minister Sri Mulyani Indrawati said that the government will find a way to address issues with the financing of the light rail transit (LRT) project in Palembang, Jakarta, Bogor, Depok and Bekasi.

"We will try to find a way so that the project can be completed on time," Sri Mulyani said in Jakarta on Wednesday, February 8, 2017.

According to Sri Mulyani, the LRT project is government's commitment in the form of public service obligation (PSO), insurance and investment.

Sri Mulyani asserted that the government will use all existing instruments and mechanisms "both in and outside the State Budget" to address the financing issues. Therefore, the government would be able to execute the project with proper governance.

"There are fund sources other than the State Budget. The government is willing to provide warranty to spark confidence in important projects," Sri Mulyani explained.

The government is currently working and two LRT projects in Palembang, South Sumatera, and Jakarta, Bogor, Depok and Bekasi in Java. The value for both projects is more than Rp 30 trillion (US$2.2 billion), which is too big to be covered by the State Budget.

Coordinating Maritime Affairs Minister Luhut Binsar Panjaitan claimed that the LRT project in Palembang, which was initiated to support the Asian Games in August 2018, was not hampered by financial issues. Luhut is convinced that the project can be completed before the Asian Games commences.

Meanwhile, Luhut revealed that the government is having difficulties in financing the LRT project in Jakarta, Bogor, Depok and Bekasi. Therefore, the government is looking at options to finance the project that is expected to complete in the first quarter of 2019.

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Minister: Infrastructures for National Cyber Agency are Ready
Tempo, 09/02/2017

Coordinating Minister for Political, Legal, and Security Affairs Wiranto, said that supporting facilities for the upcoming National Cyber Agency (BCN) is currently available.

"The institution appointed as the embryo of the BSN is the State Cipher Institution [for efficiency considerations]. So here is already an office, there are the people, there's the tool, we only need to improve it," Wiranto said at his office on Wednesday, February 8, 2017.

Wiranto underlined that the BCN will be formed in an effort to guard Indonesia against modern threats such as cyber crimes. Wiranto explained that cyber crime can pose serious threats to the country's banking system, business, and development.

"If there is no protection to counter cyber attacks both in national or international scale, we would suffer many losses," Wiranto stated.

Wiranto previously stated that the BCN will be filled by cyber experts.Similarly, the Defense Ministry had stated that dozens of internet and technology experts will help the BCN to run its tasks and duties.

"We have sent 50 people to post-graduate school. They are great information technology experts," said Defense Minister Ryamizard Ryacudu on Sunday, February 5, 2017.

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Govt Prioritizes Communication Infrastructure Development In E. Indonesia
Antara News, 09/02/2017

The government of Indonesia has prioritized the development of communication infrastructure in the eastern part of Indonesia.

"The government is developing communication infrastructure in the eastern part of Indonesia, and it has become our priority," Minister of Communication and Information Rudiantara said in his remarks during the National Press Day (HPN) 2017 held in Ambon here on Wednesday.

Most of the eastern Indonesian region has yet to get access to information technology infrastructure.

"The government hopes that all districts in eastern Indonesia can get access to Internet in 2019," the minister stated.

Therefore, the minister called on the local administrations to support the development of communication infrastructure in relation to licensing documents and provision of land.

Meanwhile, Southeast Sulawesi Communication and Information Agency head Kusnadi noted that the local government was concerned with the permits and the provision of land.

"The Southeast Sulawesi Communication and Information Agency will hold a meeting with district administrations to discuss the development of communications infrastructure," he remarked.

The central government has allocated a budget of around Rp20 billion to the development of communication infrastructure in Southeast Sulawesi, consisting of 17 districts and cities.

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Minister Pandjaitan Urges Mass Media Players To Realize Maritime Development
Antara News, 09/02/2017

Coordinating Minister for Maritime Affairs Luhut Binsar Panjaitan has called on mass media players to

realize the development of the maritime sector.

"The mass media players have an important role in the development of the nation, as Indonesia has abundant natural marine resources," Panjaitan said during the discussion on the sidelines of the National Press Day (HPN) 2017 here on Wednesday.

The senior minister remarked that Indonesia has immense potential in maritime tourism, because the country has extraordinary natural marine resources, including coral reefs and marine life diversity.

"The natural marine resources should be maintained and preserved," he stated.

In addition, Indonesia has the potential in fisheries industry.

"It is important for us to build the nation," he remarked.

The government has integrated the maritime development with other sectors, including communication facilities, harbor, electricity and gas stations in coastal areas, he noted.

The Ministry of Maritime Affairs and Fisheries and the Ministry of Tourism earlier agreed to develop the curriculum of various educational institutions in order to develop maritime tourism in the country.

"We will utilize the existence of educational institutions in the Ministry of Maritime Affairs and Fisheries," Tourism Minister Arief Yahya said here on Tuesday.

The tourism minister hoped that the syllabus would focus on the development of maritime tourism in the country.

He also hoped that the Creative Economy Agency (Bekraf) could be involved in formulating a program of study in terms of innovation and creativity development.

Meanwhile, Minister of Maritime Affairs and Fisheries Susi Pudjiastuti stated that European countries could develop their lands through tourism.

"Such efforts can also be taken by Indonesia to develop maritime tourism," the minister added.

She also highlighted the unhygienic conditions prevailing in fishing harbors. Therefore, the Ministry of Tourism can also help improve the cleanliness of the port.

She also stressed the importance of changing the paradigm and attitudes, as part of the efforts to develop the maritime tourism in Indonesia.

"Domestic and foreign tourists have expressed interest in the maritime tourism in the country," she remarked.

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South Kalimantan to Rehabilitate 59,000 Hectares of Degraded Land
The Jakarta Globe, 09/02/2017

South Kalimantan Governor Sahbirin Noor plans to plant millions of trees on degraded land as part of the province's green revolution.

"We are targeting to plant trees on more than 59,000 hectares of degraded land, which will be done through the implementation of the Green Revolution Movement, beginning this year," Sahbirin told Antara news agency in Banjarbaru on Tuesday (07/02).

The governor said the degraded land is in industrial forests, production forests and forests outside the areas managed by the province's forestry department.

The tree-planting effort aims to reduce the size of degraded land in the province, which currently amounts to around 640,000 hectares.

"We hope that the extensive areas of degraded land can be reduced to create a better environment for our children and future generations," Sahbirin said.

The Green Revolution Movement, spearheaded by the South Kalimantan provincial forestry department, was announced on Friday last week.

With all districts and towns involved, relevant stakeholders are expected to work together for the greater good of the environment and to foster an awareness of the need for nature conservation.

Forestry department head Hanif Faisol Nurrufiq said the Green Revolution Movement aims to plant up to 2.2 million trees of different species.

"The target includes tamarind, jabon, mahogany, false ashoka, dogfruit, bitter bean, albizia chinensis, and royal poinciana trees, while we will also plant 75,000 rambutan and mango trees," Hanif said.

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