Update News February 20, 2017


In The News


Indonesia, Germany Agree G20 For Economic Development
Antara News, 20/02/2017

At a bilateral meeting between Indonesian Foreign Minister Retno Marsudi and her German counterpart Sigmar Gabriel in Bonn on Thursday (Feb 16), both sides agreed that the G20 foreign ministerial meeting can be addressed to create a condition conducive to economic development.

A statement from the Indonesian Ministry of Foreign Affairs received by ANTARA here on Friday mentioned that Minister Retno welcomed the initiative of Germany as the chairman of G20 in 2017 to hold the G20 foreign ministerial meeting.

Although the G20 was set up to discuss issues after the global financial and economic crisis in 2008, the two ministers agreed that G20 meeting can contribute to creating a condition conducive to economic development.

"The focus of the G20 Foreign Ministerial meeting is Maintaining Peace in a Complex World. This topic can help create condition conducive to development, " Minister Retno said.

Both foreign ministers also stressed the importance of international and multilateral cooperation in creating global peace, stability, and prosperity. In recent time, the two ministers noticed the weakening of multilateral cooperation spirit and the rise in nationalism and protectionist policies in various countries.

The G20 Foreign Ministerial meeting is expected to push back the spirit of multilateral cooperation in addressing global challenges."A variety of todays global challenges cannot be solved by individual countries, but they require strong international and multilateral cooperation," Minister Retno asserted.

The G-20 which comprises of 19 countries plus the European Union dominate 75 percent of total world trade. Indonesia is the only ASEAN member country of the G-20. The five Asian countries of the G-20 members are Saudi Arabia, China, India, Japan, and South Korea.

The thirteen other countries are South Africa, United States, Argentina, Australia, Brazil, England, Italy, Germany, Canada, Mexico, France, Russia, and Turkey.

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President Lauds E Nusa Tenggara`s Effort To Achieve High Growth
Antara News, 20/02/2017

President Joko Widodo has praised all the elements of East Nusa Tenggara province for their efforts to achieve higher economic growth in the past few years, Governor Frans Lebu Raya said.

"The economic growth in East Nusa Tenggara during the 2014-2016 period had always been above the national growth. In 2016, East Nusa Tenggaras economy grew 5.18 percent, well above the average national growth," the governor said here on Saturday.

The president lauded the provinces higher growth at a limited meeting to discuss the realization of national strategic projects and priority programs in East Nusa Tenggara and North Sumatra.

Widodo stated that East Nusa Tenggaras economic growth in the past three years had always stayed above the national growth.In 2014, East Nusa Tenggaras economy expanded 5.01 percent and further rose to 5.18 percent in 2016, he remarked.

"The trend suggests that East Nusa Tenggara has begun to catch up with other provinces (in Indonesia). But this is not enough; we must work harder to alleviate poverty, reduce disparities, and create more jobs," he added.

At the meeting, the president stressed the need for East Nusa Tenggara to focus on developing three sectors as an umbrella for the development of other sectors, the governor asserted. The three sectors include infrastructures, border areas, and tourism.

The development of infrastructure is a must, because dams and other infrastructures can be used to meet the publics needs to obtain clean water, irrigation networks, and power plants, he noted.

Since East Nusa Tenggara borders Timor Leste and Australia, the province needs to improve its border cross check points. In addition, it also needs to develop its border areas, including roads, to spur the local peoples economy.

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BUMN Tasked with Building Adequate Infrastructure: President
Tempo, 20/02/2017

State-owned enterprises, especially those operating in the construction and infrastructure sectors, are in charge of building as much infrastructure as possible, President Joko Widodo stated.

"Their duty is to build as much infrastructure as possible rather than simply enjoying profits from the existing ones, and I see that being carried out by Waskita Karya, through its subsidiary and other state-owned enterprises," the president noted in his remarks during the inauguration of the financial closing event for non-government funded investment projects at the State Palace in Jakarta, Friday.
Waskita Karya is an Indonesian state-owned construction development corporation.

Furthermore, the president said he had ordered the National Development Agency to immediately securitize the completed infrastructure projects implemented by state-owned enterprises to raise further funding for other infrastructure development projects.

"I have called on the national development minister to change the status of these completed projects from greenfield to brownfield, so it can soon be released again through securitization and generate more money to be used for development in other areas," he remarked.

From the very beginning, infrastructure development has been identified as a key factor in realizing the governments target to ensure economic equality across Indonesia, he added.

"It will also open several new employment avenues and opportunities for the growth of small and medium enterprises," he noted.

Hence, he lauded the breakthrough measures being undertaken to fund such projects, which include the non-governmental investment funding mechanism (PINA) that complements the infrastructure financing scheme alongside the partnerships between the government and businesses.

When infrastructure development depends solely on the state budget, construction will take a long time due to the limited availability of funds in the budget, he stated.

"Hence, special schemes, including Public-Private Partnership (PPP) and limited mutual funds, need to be continued," he remarked.

The president also cited the example of the Umbulan infrastructure project in Pasuruan, East Java, that is currently up and running again through the non-governmental investment scheme after being idle for a few years.

"Now, I see the Umbulan project, which had come to a standstill for a few years, is now back up again through the implementation of the PPP scheme.

I think these types of breakthroughs need to be continued, and we have to come out of our comfort zones," he added.

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Trans-Java Toll Road Project Boosts Non-State Funding Model
The Jakarta Post, 20/02/2017

The trans-Java toll road has come up as the first project to reach financial closure under the non-state budget infrastructure funding (PINA) model.

National Development Planning Board (Bappenas) head Bambang Brodjonegoro on Friday announced the financial closure for the project run by developer PT Waskita Toll Road, a subsidiary of state-owned construction firm PT Waskita Karya.

"The PINA program has successfully funded the initial phases of nine toll road sections worth Rp 70 trillion [US$525 million], five of which are part of the trans-Jawa toll road," he said at the Presidential Palace.

Bambang added that state-owned infrastructure financing company PT Sarana Multi Infrastruktur (SMI) and state-owned pension insurance firm PT Taspen had distributed early equity of Rp 3.5 trillion, bringing total equity to Rp 9.5 trillion of the Rp 16 trillion needed.

Under the PINA scheme, cash from pension funds, for instance, will be channeled into an intermediary, which will later issue bonds.
Proceeds from bond sales will be used to buy equity in companies executing infrastructure projects. Once the infrastructure becomes operational, the intermediary will sell the equity.

PINA, intended to speed up financing for infrastructure development, complements existing schemes for private-public partnerships (PPPs), such as viability gap funds (VGF) and availability payment (AP).

"The pilot project is not the only one we will facilitate through PINA. We are reviewing several prospective investees that will be facilitated by Bappenas after the trans-Jawa [project]," Bambang said.

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Public Works Ministry To Rehabilitate Slum Houses In Morotai Island
Antara News, 20/02/2017

The Public Works and Housing Ministry will distribute aid for the slum housing rehabilitation program in Morotai Island District, North Maluku, in 2017 to improve the quality of public housing in the forefront area.

Secretary of the district of Morotai Island Rajak Lotar when contacted from Ternate on Saturday stated that his side was unaware of the total budget being disbursed for implementing the housing rehabilitation program, but he confirmed that there are 300 slum houses on Morotai Island that are in need of renovation.

In 2016, the Ministry of Public Works and Housing had provided a similar assistance to renovate 400 slum houses in the Morotai Island District.

The district government of Morotai Island will seek to repair at least 500 slum houses in 2018 by utilizing the ministrys house repair assistance.

He noted that the government of Morotai Island District highly lauded the assistance offered by the Ministry of Public Works and Housing to renovate the houses, as the local government found it difficult to repair the slum houses by using only its regional budget.

The Morotai Island district government expressed hope that such assistance would continue to be offered to the region, as thousands of slum houses in nine sub-districts in Morotai Island District need to be repaired, including improving the quality of the residents environment.

Meanwhile, Irfan Umasugi, a member of the Regional Legislative Council of North Maluku Province, said the provision of social assistance to society, including the distribution and use of the housing rehabilitation aid for slum houses, must be closely monitored to prevent irregularities in its implementation.

During a visit to several areas, Umasugi said he often received reports from the local people who were given the governments social assistance that the housing rehabilitation assistance was not in accordance with the provisions of the aid and their needs.

Hence, the locals complained that the assistance was not sufficient to complete the renovation of their houses to make them habitable."The rehabilitation assistance for slum houses is usually provided in the form of building materials worth Rp15 million.

However, the materials given to the residents have failed to meet their needs. For instance, they needed 10 sacks of cement, but they were only given six," he added.

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Gov`t to Improve Transportation Infrastructures to Wakatobi
Tempo, 20/02/2017

The government will optimize transportation infrastructures to Wakatobi, South East Sulawesi as an effort to support Wakatobi as one of the best tourism destinations in Indonesia.

"Connectivity in Wakatobi is quite limited at the moment,” Transportation Minister Budi Karya Sumadi stataed in Jakarta on Saturday (18/02).

In the effort to optimize the transportation, the government will collaborate with national carrier Garuda Indonesia and state-owned ferry operator PT ASDP to develop air and water transportation systems.

In air transport sector, Budi said that he will initiate a flight route from Bali to Wakatobi. This will realize the concept “crowd attach crowd” in which tourists in Bali will be interested to visit Wakatobi.

For this purpose, Budi said that Wakatobi district will subsidize Garuda to support the flight to Wakatobi.“In April, Garuda is expected to operate twice or three times a week depending on the needs,” he added.

Budi also claimed that he will optimize water transportation to connect four islands in Wakatobi. He asked ASDP to conduct a study on the possibility of ASDP to operate by connecting several ports in Wakatobi, including Wanci port.

Such a research is related to the transportation traffic in existing ports in Wakatobi.“If the traffic is still low, we will find other alternatives. The study will spend 1 to 6 months.”

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Logung Dam in Kudus Expected to Operate in 2018
Tempo, 20/02/2017

The construction of Logung dam in Kudus regency, Central Java, is expected to be completed in 2018.The dam is one of 65 dams built by Public Works and Public Housing Ministry in the period of 2015-2019.

Public Works and Public Housing Minister Basuki Hadimuljono during his visit to the construction site said that land acquisition for the dam has been done and the dam is now under construction.

The budget for the project of the dam, which covers an area of 196 hectares, comes from both Kudus regional budget and the State Budget.

Basuki added that the dam is expected to accommodate around 20.15 million cubic meter of water and to irrigate 5,355 hectares of paddy fields.

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Kendari New Port To Be Soon Constructed
Antara News, 20/02/2017

Kendari New Port will soon be constructed with the investment value of Rp936 billion, after some problems are completely resolved."The construction is still hampered by some problems including the existence of a bridge and shallow sea," Transportation Minister Budi Karya Sumadi said here, Saturday.

To be carried out by state port operator PT Pelindo IV, the project will be funded with funds through state capital injectionGeneral Manager of Pelindo IV, Suparman, said that a license related to environmental impact analysis would be issued next week by the Ministry of Environment and Forestry.

Of the total investment of Rp936 billion, more than half or Rp635 billion is the government assistance while the rest comes from Pelindos internal budget.

Through bidding, Pelindo has decided the winner for the first phase of construction of a pier. The construction of Kendari New Port is expected to finish in 2018.

It is expected to be an upgrade of the current port in Kendari, Bungkutoko, which has yet to meet the standard and as part of the sea toll development.

"Bungkutoko was not designed for large ships and thats why we need to operate small ships to distribute goods and commodities. If the new port is completed it will surely cut operational costs,"Suparman said.

This new port which has a capacity of 250 thousand TEU per year, is also anticipated to serve international export and import trades as well as national distribution.

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Gov`t to Launch `Rumah Kita` Warehouses in March
Tempo, 20/02/2017

Transportation Minister Budi Karya Sumadi said ‘Rumah Kita’, warehouses to store logistics to support the Sea Toll Program were set to operate in March."God willing, the warehouses will be operating this March,” Budi said in Jakarta on Friday (17/2).

However, the minister said that he would still further discuss the project, which involves a number of state-owned enterprises, including PT Pelayaran Nasional Indonesia (Pelni), PT ASDP Indonesia Ferry, PT Pelindo I, II, III and IV.

Budi added that the Rumah Kita wareshoues would be located in 13 regions, namely Nias, Mentawai, Natuna, Sanggate, Dompu, Waingapu, Rote, Kalabahi, Tahuna, Namlea, Saumlaki, Manokwari and Timika.

Rumah Kita warehouses will also be integrated with the Air Toll in order to reduce price disparity in mountainous regions in Papua such as Manokwari and Timika.

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Development Of Geothermal Power Needs To Accelerate: VP
The Jakarta Post, 20/02/2017

Vice President Jusuf Kalla has expressed hope that state-owned energy company PT Geo Dipa Energi will be able to boost the development of geothermal energy to help the government achieve its energy sector target.

“I am happy to hear the progress. I’m still keeping my hopes up that Geo Dipa will continue to help the government develop clean electricity,” said Kalla as reported by tribunnews.com on Friday after a meeting with the company’s management in his office.

The Vice President stressed the importance of immediately expanding geothermal power plants in Dieng, Central Java, and in Patuha, West Java.

Meanwhile, Geo Dipa president director Riki Ibrahim said he had explained to Kalla about the progress in the Dieng and Patuha power plant projects, which would have capacities of 100 megawatts (MW) and 175 MW, respectively, by 2021.

He also expressed the readiness of Geo Dipa to accept new geothermal power plant projects because the company had adequate human resources to develop downstream energy to downstream businesses.

The company’s long-term plan was to develop 1,100 MW of geothermal energy by 2030, Riki added.
During the meeting, Riki also spoke about the company’s legal dispute with PT Bumigas Energi concerning the cancelation for joint development of the two power plants. “The legal problem with Bumigas has disrupted efforts to accelerate the two projects,” He said.

The Attorney General, Corruption Eradication Commission (KPK) and the Development Finance Comptroller (BPKP) are investigating possible state losses from the dispute.

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Indonesia, Sweden To Jointly Develop Renewable Energy To Generate Electricity
Antara News, 20/02/2017

Indonesia and Sweden have agreed to jointly develop renewable energy to generate electricity.By cooperating with Sweden which has more sophisticated technology for new and renewable energy, the domestic electricity tariffs will hopefully become more efficient, Energy and Mineral Resources Minister Ignasius Jonan said here on Friday.

"Hopefully, through this cooperation with Sweden which (has developed renewable energy-based power plants earlier), the tariffs of electricity produced by hydro and wind power plants will be cheaper," he said.

By signing a Memorandum of Understanding with Sweden to that effect, he expressed the hope that the development of new and renewable energy to generate electrical power could be implemented across Indonesia to achieve more efficient electricity tariffs through effective technology.

The development of new and renewable energy-based power plants will be adjusted to the geographical condition by, among others, taking into account large resources found in the locations for the power plants, he said.

"If gas resources are much found there, we will try to develop gas-fueled power plants. If there is no gas resource but rivers or waterfalls are found there, we can build hydro power plants there," he said.

Meanwhile, Swedish Coordinating Minister for Policy and Energy Ibrahim Baylan said both countries will try to develop environmentally friendly power plants.

"The objective of energy policy is to ensure electricity supplies to industries and households with competitive prices and the smallest possible environmental impact," he said.

Indonesia and Sweden can learn from each other to create environmentally friendly energy, moreover, Sweden holds the highest share of renewable energy market and offers the lowest price of new and renewable energy in European Union.

In addition, Sweden has also recorded significant economic growth in the past 30 years by using less electrical power than in the previous 30 years.

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Indonesia To Strengthen Commitments With Iran In Energy Sector
Antara News, 20/02/2017

Indonesia will strengthen its commitment to developing the energy sector with Iran, including investment in an oil field in that country, Deputy Minister of Energy Arcandra Tahar said here on Friday.

"Commitments in the energy sector include Pertaminas plan to invest there as well as gas imports," he said after a coordination meeting to discuss the planned visit of the chief economic minister to Iran.

Coordinating Minister for Economic Affairs Darmin Nasution plans to visit Iran as a follow-up to the visit of President Joko Widodo to the country in December 2016.

Arcandra confirmed that the state-owned energy company, PT Pertamina, is ready to invest in two oil fields in Iran and will submit its proposal soon."Pertamina will enter two fields and the proposal will soon be submitted to Iran," he informed.

Pertaminas director of upstream business, Syamsu Alam, stated that the National Iranian Oil Companys (NIOC) subsidiary, the National Iranian South Oil Company (NISOC) held talks about the planned investment in the Ab-Teymour and Mansouri oil fields."On Feb 11, we held talks with the NIOC. On Sunday, we will talk again," he said.

Syamsu confirmed that the proposal would be submitted during the visit of Darmin Nasution there on February 25.Pertamina and NIOC had earlier signed a commitment to carry out an initial study of two giant oil fields in Iran---Ab Teymour and Mansouri---that have oil reserves of five billion barrels. The NIOC has offered the two oil fields to Pertamina.

The director of procurement of the state electricity company PLN, Supangkat Iwan Santoso, noted that Indonesia has also offered to invest in Irans electricity sector, especially in the development of generators and capacity improvement of industrial equipment, to support domestic production.

"The IPP (Independent Power Producer) investment includes thermal and renewable power generators and capacity building for industrial equipment to support domestic production. The two are important in addition to maintenance service," he observed.

Supangkat reminded that a number of investors from Iran have already expressed an interest to be involved in the US$5 billion worth of electricity energy projects.

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Indonesia, Russia Explore Ways To Cooperate In Tourism Sector
Antara News, 20/02/2017

The Russian government and the Makassar city government in Indonesia are exploring ways to cooperate in the fields of trade, tourism and investment.

"We came here today for further discussions on strengthening the cooperation, as already discussed," Indonesian Ambassador to the Russian Federation, Wahid Supriyadi, said in Makassar city on Friday.

He said the cooperation his country is looking for in the fields of tourism, trade and investment, is part of the sister city development program.
Supriyadi noted that Makassar city will also participate in the Indonesia Festival scheduled for August 4 to 6, 2017 in Moscow city, Russia.

"Makassar will participate in the Indonesia Festival, which will be held from August 4 to 6 in Moscow. We have come here to discuss all things related to the sister city program," he reiterated.

He informed that 90 thousand Russian citizens were expected to visit the Indonesia Festival. The festival will feature business meetings, exhibitions and Indonesian cultural performances.

He pointed out that Russia offers major market opportunities that Indonesian people can benefit from. These are being offered through the second Indonesia Festival.

The Indonesian embassy to Russia in Moscow city has also invited participants from Indonesia to take part in the festival."We hope the festival can deliver real results when it comes to increasing Indonesian exports to Russia and increasing Russian investment in Indonesia, besides enhancing the number of Russian tourists visiting Indonesia," he stressed.

The Mayor of Makassar, Moh Ramdhan Pomanto, who received the Indonesian Ambassador to Russia and his entourage, expressed his happiness and lauded the Indonesian Embassy for implementing the Indonesia Festival.

The event, he added, will allow the Makasar city to introduce its culture and culinary skills to the Russian society."This is a great opportunity for us to introduce various potentials of Makassar city to foreign countries. Makassar has twice been invited to organize cultural and culinary festival in Spain," he recalled.

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RI, Austria To Back Each Other`s Bid For UNSC Non-Permanent Seat
Antara News, 20/02/2017

Indonesia and Austria have agreed to support each others bid for non-permanent membership of the United Nations Security Council (UNSC).

Indonesia will go ahead with its candidacy for the UNSC non-permanent membership for the 2019-2020 term, the minister counsellor/Indonesian permanent representative to international organizations in Vienna, Dewi Kejora said on Sunday.

UN is set to elect five non-permanent members of the UNSC in mid 2018 during the 72nd session of the UN General Assembly at the UN Headquarters in New York.

Indonesia and Austria held the third bilateral consultation forum in Vienna on February 16. The Indonesian delegation, led by Director General of America and Europe at the Foreign Ministry Muhammad Anshor comprised officials of the Foreign Ministry and the Indonesian Embassy/Permanent Mission in Vienna, while the Austrian delegation was led by Director General of Politics at the Ministry of European Affairs, Integration and Foreign Relations Ambassador Alexander Marschik.

The meeting stressed the importance of strengthening the existing good bilateral relations between the two countries based upon the principles of common view and equal position in addressing a wide range of global issues, including disarmament and cross-cultural and interfaith dialogs.

Both countries also agreed to continue political cooperation, particularly in supporting each others bid for UNSC non-permanent membership.

At the meeting, the Indonesian delegation also proposed cooperation between the two countries peacekeeping centers and bilateral cooperation in counter-terrorism.

Indonesia sees Austria is one of its strategic political partners in Europe, the more so because it is chairman of the Organization for Security and Co-operation in Europe.

In this regard, Austria expressed the hope that it could cooperate with Indonesia to encourage cooperation initiatives to fight against terrorism at a global level in view of Indonesias track record in combating terrorism.
At the meeting, the two countries also discussed economic, trade and investment cooperation.

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