Update News February 10, 2017

In The News

Gov`t Plans New Economic Policies to Reduce Poverty
Tempo, 10/02/2017

The Presidential chief of staff Teten Masduki said that the government is preparing new economic policies, which include agriculture reforms, to tackle poverty and social inequality.“Poverty and economic inequality in Indonesia have gone worse and they have become the sources of social tensions.

The Indonesian government therefore will carry out three things, including to provide access to the general public to lands and establishment of social forestry,” Teten told the news agency Antara yesterday at the National Museum in Jakarta.

According to him, the government may impose taxes on vacant lands to tackle economic inequality.“Unused or vacant lands will be subject to taxes, but no details are made yet.

The aim is to bar individuals from collecting lands with no plans to use them. The land is an economic aspect that should not be collected by certain individuals,” Teten Masduki said.

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Company To Construct Factory In Palu Economic Zone
The Jakarta Post, 10/02/2017

One company has received a principle license for foreign investment from the Investment Coordinating Board (BKPM) to open a factory in the Special Economic Zone (KEK) in Palu, Central Sulawesi.

The president director of Bangun Palu Sulteng Ltd, which manages the KEK, confirmed that Sofi Agro Industries Ltd would invest in the Palu KEK.

“The company is ready to build a factory. It has three years to finish the construction,” president director Andi Mulhanan Tombolotutu told The Jakarta Post on Tuesday, adding that the company needed to obtain a license from the BKPM because half of it shares were owned by foreigners.

The principle license was obtained on Jan. 18 and the company is expected to produce 3,000 tons of coconut shell briquettes per year.“About 90 percent of the products will be exported,” Andi said.

The company also plans to produce 1,800 tons of copra per year, 80 percent of which will be exported, and 2,000 tons of coconut oil per year, 70 percent of which will be exported. It will also produce 1,500 tons of desiccated coconut and 800 tons of coconut essence per year.

“The factory will be built on a 19,815-square-meter plot of land and will employ 625 local workers,” he added.Two other companies will be issued principle licenses soon, one of which is Aspal Buton (Asbuton) Ltd, he added.

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Survey: Women More Confident in Establishing Business
Tempo, 10/02/2017

Indonesia score a quite high rank in the start-up. According to the research conducted by the Global Entrepreneurship Monitor (GEM), of the total population, 14 percent of Indonesia’s entrepreneur are women.

This means that there are 14 out of 100 people that have established a 3.5 years old business venture. Women are considered to be more audacious than men in establishing a business.

Head of GEM Indonesia in the period of 2013-2016, Catharina B. Nawangpalupi, stated that the survey has been conducted in Indonesia for the last four years.

“The result shows that Indonesian women are more confident in taking risks in order to start a business venture,” she said on Wednesday, February 8, 2017.

During the Global Entrepreneurship Monitor Annual Meeting held in Kuala Lumpur, Malaysia, the organization reported an increase in global entrepreneurship.

The research uses the Total Early-stage Entrepreneurial Activity (TEA) indicator which is stable from year to year. The indicator measures the percentage of 18-64 years old citizens that have established a business venture in the period of 3.5 years.

Indonesia is placed in the 20th position out of 65 countries. The number of women participating in entrepreneurship dominated the number of men with the ratio of 1.24 or five women out of four men.

Based on the 2013-2016 survey, according to Catharina, Indonesian men consider themselves to have a higher chance and skill in entrepreneurship. “But the number of women who establish a business outweigh the men's,” she stated.

Catharina said the survey result shows the importance of supports for the businesswomen. Therefore, they can develop the businesses and increase the influence to their surroundings.

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Jakarta To Build 20 Hawker Centers This Year
The Jakarta Post, 10/02/2017

The Jakarta Cooperatives, Micro, Small and Medium Enterprises and Trade (KUKMP) Agency plans to build 20 street vendor centers in a bid to accommodate and better manage sellers in the city.

“In 2017, the administration will build 20 street vendor centers in locations across the city using corporate social responsibility (CSR) funds,” Jakarta KUKMP head Irwandi said.

He added that the administration would also build two traditional markets in Kamal Muara, West Jakarta, and at the Islamic Center in North Jakarta, which aimed to host 200 vegetable vendors and 150 Muslim clothing vendors, respectively.

The construction of the two markets would be funded by the city budget, he added.The move, he said, was expected to regulate unruly street vendors, who were considered a disrubtion to public order.

"We hope this will help better manage street vendors in Jakarta, so that we won’t hear about forceful evictions of those selling on the streets anymore. We plan to use CSR funds to build more markets in future,” he said.

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East Jakarta Inches Closer To Inauguration Of 26 Public Spaces
The Jakarta Post, 10/02/2016

East Jakarta residents will soon have more child-friendly public spaces (RPTRA) in the municipality, as the administration has nearly completed the construction of 26 of the parks.

Head of the East Jakarta Public Housing and Settlement Agency Suharyanti said the 26 areas were ready to be officially opened to the public within the next few days.

The agency has planned to build 28 RPTRA using the 2016 city budget. It has completed the construction of two of them so far, she said.

“The construction of the remaining 26 RPTRA have [to be] completed. We only need to make the final touches,” she said as quoted by beritajakarta.com on Thursday.

Some locations of the 26 RPTRA, she said, were on Jl. Kopi in Pasar Rebo, Jl. Raya Pondok Kopi and Taman Arabika, Duren Sawit.“The developer still has the duty to maintain the parks for the next six months,” she said.

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Government Plans Regulation For Subsidized Airfreight
The Jakarta Post, 10/02/2017

The Transportation Ministry’s director general for air transportation, Suprasetyo, has said that the government is revising a presidential regulation on subsidized cargo so that it will also apply to airfreight.

The regulation currently only applies to scheduled sea transportation.The effort is related to the government's so-called “air highway” initiative for aircraft to carry staple goods to remote places, like the Papuan cities of Puncak and Ilaga.

"We will decide on the kind of goods that we will transport and the form of subsidy and other things," Suprasetyo said on Thursday, adding that the subsidy would likely go toward the freight cost.

The ministry reiterated that the airfreight operation would commence this year.Previously, Indonesian National Air Carriers Association (INACA) secretary general Tengku Burhanuddin said the association saw promising potential in the air highway program. “If the government helps with the cost, it is interesting for INACA,” he said.

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Three Foreign Airlines will Open New Routes to Toba Lake
Tempo, 10/02/2017

Foreign airlines Tiger Air, Silk Air and Air Asia will open new routes to Silangit Airport in North Tapanuli, North Sumatra, according to Lake Toba tourism authority director Arie Prasetyo.

The airport is expected to support the development of Lake Toba, which has been named as a new tourist attraction touted to lure 20 million foreign tourists.“As for Air Asia, the owner of the airline Tony Fernandes had met with Tourism Minister Arief Yahya,” Arie told Tempo yesterday.

The three international airlines, Arie said, will add to the list of existing airlines operating at Silangit Airport i.e. Sriwijaya Air with its Boeing 737-500 aircraft and flag carrier Garuda with Bombardier aircraft.

“The introduction of the three airlines will greatly help Toba Lake tourism authority. The target of 1 million tourist arrivals in Lake Toba for 2019 will no longer be a difficult task,” Arie said.

The project to extend Silangit Airport runway to 2,650 meters is underway and expected to complete by September this year. “While waiting for the [runway] extension, Lake Toba tourism authority had met with Singapore Tourism Board. As a result, Tiger Air and Silk Air had promised to operate at Silangit,” Arie said.

Lake Toba tourism authority will manage 600 hectares of land near Sibisa Airport in Toba Samosir. The agency plans to lease the land for a period of 30-80 years.

Foreign investors had vowed to build hotels on it, according to Arie. “In March 2017, we will hold a business appointment with Singapore,” Arie said.

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Special Mining Permit Comforts Investors: Freeport
Tempo, 10/02/2017

PT Freeport Indonesia views that the requirements set by the government in the temporary special mining permit (IUPK) are aimed at providing assurance for investors. Huge investment value was the reason for Freeport to maintain several articles in the contract of works.

“We just want investment stability, so that our investors will feel comfortable in making the investment, since there are differences between the special mining permit and the contract of works,” Freeport Indonesia spokesperson Riza Pratama said after attending a closed hearing with the House of Representatives Commission VII overseeing energy affairs in Jakarta on Thursday, February 9, 2017.

Currently, the Energy and Mineral Resources Ministry (ESDM) is evaluating the temporary special mining permit applied by Freeport.

With such a permit, Freeport will be allowed to export concentrates for the next six months. Riza added that Freeport is committed to switching to the special mining permit.

“We asked for several conditions, and we have several disagreements with the government. There are also requirements that we haven’t met yet, but the transition won’t be so fast.

We are in the process of applying it,” Riza explained. In response to a question related to the closed meeting with the House, Riza refused to provide details of the discussion. “We were discussing challenges to be faced by Freeport in the future, particularly those related to Government Regulation No. 1/2017,” Riza said.

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Mine-Mouth Power Plant Regulation To Be Issued Soon
The Jakarta Post,10/02/2017

The Energy and Mineral Resources Ministry will soon issue a new regulation to help lower costs for mine-mouth power plants.

The new ministerial decree would be similar to another regulation that had capped gas prices at the wellhead to ensure lower costs for electricity producers, said the ministry's electricity director general, Jarman on Friday

"The mine-mouth power plant and non-mine mouth power plant rules will be issued soon to regulate [prices]," he said during a coffee morning at the electricity directorate general in South Jakarta.

Last year, the ministry issued two ministerial decrees on mine-mouth power plants, with the later one being a revision of the one issued earlier in the year.

The most recent ministerial decree stipulated that that the mine-mouth price of coal would be based on business-to-business negotiations between mining and electricity companies, as opposed to the fixed pricing mechanism implemented previously.

The new decree will be a second revision of Ministerial Decree No. 9/2016."Electricity costs must be competitive," Jarman said.Coal is expected to remain a major source of electricity production in the next decade, with about 265,599 megawatts (MW) procured from the national capacity of 527,978 MW by 2025.

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Govt Targets US$20 Billion Revenue From Tourism Sector
Antara News, 10/02/2017

The government has targeted the revenue from the tourism sector to reach US$20 billion by 2019, the Coordinating Minister for Maritime Affairs Luhut Binsar Panjaitan said here on Thursday.

"For the development of Indonesias tourism sector in the future, we have targeted the number of tourists visiting the country to reach 20 million, of which 10 million tourists would come from China," Luhut stated.Chinese tourists on an average spent $2,385 on each trip, higher than Americans, he said.

The minister noted that Indonesia has a huge potential in tourism sector, including Maluku province with its remarkable underwater views, coral reefs and ornamental fish, as well as cultural and historical sites.

However, such potential would require adequate development in infrastructure and human resources. Luhut remarked that the central and regional administrations should have an integrated development program.

"We have developed the Patimban port in West Java worth $3 billion, and it would be functional by the third quarter of this year in cooperation with Japan. It is expected to have significant economic impact on Indonesia," he continued.

The government has prepared Rp387 trillion of fund for infrastructure development in five years, higher than the previous budget of Rp152 trillion.

"I have received a report from Waskita Karya that by 2019, it will finish more than 1.4 thousand kilometers of toll road," he asserted.

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