Update News February 16, 2017

In The News


Rupiah Opens Stronger 4 Points to 13,326 after Peaceful Elections
Tempo, 16/02/2017

Rupiah opened up 4 points or 0.03 percent to Rp13,326 per US dollar. It has further strengthened 13 points or 0.1 percent to Rp13,317 per US dollar.

The market had responded positively to safe, peaceful simultaneous regional elections. Moreover, the US dollar index had weakened.

Bina Artha Securities capital market analyst Reza Priyambada said that the simultaneous regional elections were the acid test of Indonesia’s democracy which could affect investors’ perception, particularly foreign ones, in determining investment risk preference in the country.

“I hope the capital market is not contaminated by the elections and market players are expected to remain rational in their assessment and decision-making,” Reza Priyambada said in a written statement on February 15, 2017.

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Jokowi Wants Development of Bitung Economic Zone Expedited
Tempo, 16/02/2017

President Joko “Jokowi” Widodo expects the development of Bitung Port in North Sulawesi, as part of a Special Economic Zone (SEZ) to be fast-tracked which will see it turned into an international hub port and a gateway into eastern Indonesia.

“We all know that North Sulawesi province has a huge marine and fishery potential that is also one of the supporting factors to help Indonesia become a global maritime axis,” Jokowi said in a limited meeting in Jakarta on Tuesday, February 14, 2017.

Jokowi believes that Bitung SEZ will underpin North Sulawesi economic growth.

“To make concrete contributions and [help] in the efforts to reduce poverty and unemployment, improve the prosperity of people in North Sulawesi,” he said.

The President added that the construction of transportation infrastructure in the province must also be accelerated.

“It is the key to improving access and connectivity, as well as support growth in the tourism sector,” Jokowi said.

Transportation infrastructure would make it easier foreign tourist from, among others, the Philippines, Japan, South Korea and China, to enter the region. Jokowi also expects North Sulawesi to build on its marine tourism potential, adding that the central government will lend a hand to develop not only the famous Bunaken Marine Park, but other tourist attractions as well.

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Government Designs Super Micro Credit Scheme
Antara News, 16/02/2017

Finance Minister Sri Mulyani Indrawati said the government was designing a super micro credit scheme for the poor segment of the people.

"Now, the scheme is in the process of designing, because it is different from the micro business loan (KUR). This scheme is designed for the poorest people or the people who are below the KUR recipients," Mulyani said in Jakarta on Tuesday.

She said the government and the relevant agencies are designing the scheme, which is expected to provide benefit for many people and can be channeled not only through major banks but also through other capital provider agencies.
"If the design has been decided definitely, the credits can be channeled to the peoples group lower than the groups receiving the KUR credits. It is expected that the funds will be able to revolve," the minister stated.

The super micro credits can be channeled by regional government banks, cooperatives, and other financial capital agencies such as the BMT venture capital firm.

The minister noted that one of the constraints in the distribution of credits of this type is the large number of super micro business players that are difficult to be counted compared to the micro, small and medium-sized businesses (UMKM).

"The idea is good, but the problem in its realization is the transformation of the idea into reality, because the number of super micro business players is very large," Mulyani noted.

She remarked that the fund to be provided in this scheme is not a grant, because it should be repayed. Thus, it should be managed based on the existing good governance system.

"In the state financial system, funds provided not in the form of a grant should be maintained as otherwise, as it could be recorded as a state loss. So, introduce it prudently," she said.

She assured that the credits for the poor people do not equalize a subsidy given in the form of direct cash assistance, which is no longer included in the bookkeeping system once it is already spent.

The minister said the extension of the super micro credit can be complementary with the KUR credit scheme, which is now channeled to focus on the productive sectors.

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Palembang To Be Developed Into Key Industrial Area
Antara News, 16/02/2017

South Sumatra province will prioritize the development of Palembang city into an industrial area as a Special Economic Zone is being established in Tanjung Api-Api, Banyuasin, Permana, head of the provinces trade office, said.

The city administration is working to establish the 300-hectare Gandus Industrial Area, he said on Monday.

Besides Palembang, the Trade Office is planning to develop five other districts/cities - Muaraenim, Penukal Abab Lematang Ilir, Lubuklinggau, Banyuasin and Ogan Komering Ilir - as industrial zones.

"The industrial areas are expected to process raw materials from rubber, automotive and other industries into ready-to-use products," he said.

Permana said the Palembang city administration plans to connect Gandus Industrial Area to the Kayuagung-Palembang-Betung Highway. The highway is expected to give Gandus Industrial Area a boost, said Palembangs Mayor Harnojoyo.

The city administration is focusing on developing two industrial zones, Gandus, which is becoming a new city project, and Keramasan. "Currently, we are focusing on Gandus. The administration is working to provide access to this area, which will house factories, warehouses, offices and employee housing, among other things," he said.

The establishment of industrial areas is expected to aid Palembangs economic growth, which has been on the upswing since it hosted the SEA Games in 2011. This year will see a rise in investment in Palembang as the city is to host Asian Games in 2018.

Based on data from the Investment Agency of Palembang, the citys investment realization touched Rp4.1 trillion in November 2016, exceeding the annual target by 200 per cent.

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W Java To Build And Renovate 600 Bridges
Antara News, 16/02/2017

Governor of West Java Ahmad Heryawan has said that his administration plans to build and renovate a total of 600 bridges this year.

"Hopefully, we can build between 500 and 600 bridges in 2017, he said in a statement.

West Java has allocated Rp25 billion in funds in its local budget for the purpose.

"If its not sufficient, we will increase the funds in the amended budget," he noted.

The provincial government will involve NGOs, such as Vertical Rescue Indonesia, to identify the locations of the bridges.

"It happens that they (NGOs) have a program of 1 thousand bridges. So, we integrate their ideas with our program. We will work together with them," he added.

The constructions of bridges are expected to help students living in remote areas go to school without risking their lives by crossing river currents.

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LRT Palembang Contract To Be Signed On Thursday
The Jakarta Post, 16/02/2017

After delays, the Transportation Ministry’s director general for railway transportation, Prasetyo Boeditjahjono, said the government would very likely sign a contract for light rail transit (LRT) in Palembang, South Sumatra, with state-run construction firm Waskita Karya on Thursday.

"There are no problems left," he said on Thursday.

He said the project would be funded by the state budget within three years until 2019, although the funding might last until 2021.

This year, the government will disburse Rp 2 trillion (US$149.9 million) for the project from the state budget.

"It would actually be safer if it was budgeted until 2021," Prasetyo added.

The signing ceremony was initially slated to take place last Friday along with the controversial LRT for Greater Jakarta. However, the ceremony was postponed to wait for Transportation Minister Budi Karya Sumadi’s agreement.

The contract value is estimated to be Rp 10.9 trillion. The project is designed to support the 2018 Asian Games.

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Public Transportation App Readied For Greater Jakarta
The Jakarta Post, 16/02/2017

Residents of Jakarta and neighboring cities can soon check their smartphones for real time reports and timetables on public transportation services, such as Transjakarta buses, commuter trains and public minivans.

The Greater Jakarta Transportation Agency (BPTJ) said the application would give users information on which mode of public transportation they could use to reach a particular destination.

“They won’t get confused anymore, because all information about all types of public transportation are available in the app,” BPTJ head Elly Andriani Sinaga told reporters during the inauguration of the JR Connexion bus service in Jakarta on Wednesday.

She said JR Connexion buses connected people living in some residential areas of Greater Jakarta, such as BSD City in Serpong, Lippo Village Karawaci in Tangerang and Summarecon in Bekasi, with the city’s hubs, including Sudirman in South Jakarta and Gambir in Central Jakarta.

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Gov`t Earmarks Rp7.6tn for Development of Papua
Tempo, 16/02/2017

The Public Works and Public Housing Ministry will gradually step up infrastructure development in Papua. In the National Strategic Project list set forth in the Presidential Regulation No. 3/2016, the government aims to develop trans Papua roads, cross-border roads and state border outposts (PLBN) as well as infrastructure in Skouw, Jayapura.

“Development in Papua Island will not only be done to open isolated regions but also to lower prices,” the Public Works Minister Basuki Hadimuljono said in a press release on Tuesday, February 14, 2017.

According to him, the government has a strong commitment to achieving equitable development in a bid to reduce development gap between western and eastern regions of Indonesia. Some 35 strategic development area (WPS) have been set as the top priority by the Ministry, which includes four WPS in Papua and West Papua: WPS 31 of Sorong-Manokwari, WPS 32 of Manokwari-Bintuni, WPS 33 of Nabire-Enarotiali-Wamena and WPS 34 of Jayapura-Merauke.

“Infrastructure development in borders will reduce social, economic and regional disparities. Construction of roads is basically carried out to make [distribution of goods] quicker, safer and cheaper,” Basuki said.

Papua received Rp5.66 trillion in infrastructure improvements in 2015. In 2016, the government allocated Rp5.06 trillion for the program. In 2017, the budget is set at Rp4.96 trillion, comprising Rp411 billion for water resources budget, of Rp3.72 trillion for roads and bridge construction, Rp132 billion for settlement and Rp85.7 billion for housing.

Basuki explained that West Papua budget allocation for 2017 is Rp2.64 trillion, comprising Rp343 billion for water resources budget, Rp1.51 trillion for roads and bridge construction, Rp129 billion for housing.

“A total of Rp7.6 trillion for public works and public housing infrastructure in Papua,” Basuki said.

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Iperindo Teams Up with S. Korean Firms, Step Up Ship Production
Tempo, 16/02/2017

Indonesia Ship Building and Offshore Association (Iperindo) East Java chapter yesterday signed a memorandum of understanding with Korea Marine Equipment Association (KOMEA) in Surabaya. As many as 15 shipbuilders are involved in the cooperation.

The understanding marks increased cooperation between Busan and Surabaya. Iperindo East Java chairman Romeo Hasan Basri said that the cooperation is justified since Surabaya is the center for the national shipbuilding industry.

Romeo said named major shipbuilders in Surabaya, such as state-owned PT PAL Indonesia and PT Dok Perkapalan Surabaya. A total of 20 shipbuilders have joined the Iperindo East Java.

He expects to see more than just cooperation in the purchase of equipment from Korea but also in the production process, particularly in ship assembly in Indonesia that involve domestic maritime supporting industry.

“Not just to buy components, but also to assemble them here. I expect that 40 percent of domestic contents will be used.”

Komea chairman Chung Chang-Soo expects the two associations to step up interactions. Komea will woo South Korean firms to establish joint ventures in ship building with their Indonesian counterparts.

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Construction Of Kertajati Airport Reaches 64.2%
Antara News, 16/02/2017

Kertajati Airports construction project in Majalengka, West Java, comprising access, drainage, interchange ramp, and parking lots has reached 64.2% on Jan 29, PT. Bandarudara Internasional Jawa Barat Director Virda Dimas Ekaputra stated.

The construction of the Kertajati Airport comprises three working packages, Ekaputra noted.

Package 2 encompasses the construction of the main passenger terminal building in cooperation with PT. Wijaya Karya and PT. PP, with a contract value of Rp1.39 trillion.

Meanwhile, Package 3 comprises the construction of facilities for supporting operations, such as a cargo terminal and regional electrical connection by PT. Waskita, with a contract value of Rp416 billion.

"The work on Package 2 has reached 19.94%, while that on Package 3 has reached 35%," Ekaputra stated.

Hence, he noted that the overall progress of the Kertajati airports construction project has reached 30% on February 5, 2017.

Ekaputra pointed out that the cost for Phase 1 reaches Rp2.1 trillion of the total development investment of Rp4.5 trillion.

He expressed optimism that the infrastructure work would be completed on July 3, 2017; the building to support operations on August 8, 2017; and the terminal building on December 6, 2017; while the initial operations will begin in January 2018 and full operations in March 2018.

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Indonesia Launches Its Telkom 3S Satellite
Antara News, 16/02/2017

PT Telekomunikasi Indonesia successfully launched its Telkom 3S satellite from the Guiana Space Center, Kourou, French Guiana, at 4:39 Western Indonesia Standard Time (WIB) early on Wednesday.

The satellite was launched on schedule at the Jupiter Control Center, Guiana Space Center. Following the count-down at 4:39, the rocket launcher Ariane 5 blasted off of the launch pad, carrying the Telkom 3S satellite to its orbital slot at the 118 degrees eastern longitude.

The launch of the satellite was witnessed by PT Telkomunikasi Indonesias President Director Alex J. Sinaga; a number of members of the board of directors and commissioners of Telkom; representatives of the ministry of informatics and communications; and the ministry of state-owned enterprises.

"Its fantastic, congratulations to Thales and Arianespace for their hard work," Alex said in his remarks after the launch of the satellite.

He said that the Telkom 3S is expected to increase the capacity and quality of the Internet services in Indonesia.

The US$215 million worth satellite carries 24 C-band, eight extended C-band, and 10 Ku-band transponders, which intends to provide high-definition television services, faster mobile communications and Internet applications across the sprawling archipelago of over than 17,000 islands.

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President Jokowi to Launch Social Aid Card
Tempo, 16/02/2017

The government is currently in preparation to launch a non-cash social aid in the form of a card. President Joko “Jokowi” Widodo revealed that the aid distribution will start on February 23, 2017.

“We will distribute rice and sugar through a card,” said President Jokowi on Tuesday, February 14, 2017.

According to Jokowi, the first phase of the non-cash assistance distribution will target 44 cities. The President also showed the type of rice and sugar that would be distributed. The rice which will be called ‘Beras Kita’ is worth Rp8,500 per kilogram. Meanwhile, the sugar named ‘Manis Kita’ is worth Rp12,500 per kilogram.

“The packaging is good, the quality is also good. We’ll try [to distribute] it to 44 cities. If it runs smoothly we’ll then [distribute] it to other cities and districts too,” Jokowi said.

The non-cash government assistance program is under the coordination of the Coordinating Ministry of Human Development and Culture. This aid is targeted to provide assistance to 1.4 million lives or the beneficiary groups (KPM). This program is the realization of President Jokowi’s previous request on having a social assistance that is integrated with a single card. It is meant to ease the process of supervising and reduce deviation. The aid will be distributed through e-warung.

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