Update News February 24, 2017

In The News

Minister Luhut Calls for Environmentally-Friendly Economic Growth
Tempo, 24/02/2017

Coordinating Minister for Maritime Affairs Luhut Binsar Panjaitan said that economic growth must go hand in hand with environment protection.

According to Luhut, the government will continue to maintain a healthy economic growth, while protecting the environment."We're talking about future generations. President Joko 'Jokowi' Widodo always reminds that we must strive for a quality economic growth.

However, we must also be concerned with the environment," Luhut said at the World Ocean Summit 2017 in Nusa Dua, Bali, on Thursday, February 23, 2017.

Luhut promised that the government would welcome cooperation with other countries to mitigate environmental impacts. Luhut viewed that environmental problem is a global issue that must be collectively addressed."Contributions from all countries around the world are important to minimize environmental damage," Luhut said.

Karmenu Vella, European Commissioner for Environment, Maritime Affairs and Fisheries, said that 90 percent of the global economic activities take place ashore, and only 3 percent conducted at sea."There is a huge opportunity. But we can't explore without maintaining the sustainability of our environment," Vella said.

Vella revealed that the European Commission is currently preparing an action plan for a sustainable maritime management. However, Vella added a sustainable maritime economy would be impossible without environment protection efforts.

Portuguese Minister of Sea Ana Paula Vitorino suggested that a country must implement environmentally-friendly policies to fix environmental damage.

According to Minister Vitorino, one of the policies that supports the sustainable maritime economy is to wage war against illegal fishing.

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Sri Mulyani: Indonesian Economic Growth is Good
Tempo, 24/02/2017

Finance Minister Sri Mulyani Indrawati said that as a developing country, Indonesia has a good economic growth rate. Sri Mulyani stated that Indonesia is one of the countries with a high growth rate within the last decade.

Sri Mulyani asserted that within the last ten years, Indonesia's average economic growth rate is still in the level of 5.6 percent despite suffering from the economic crisis in 2008 and 2009. "If there is a country that grows [significantly], it is an achievement," the Minister said on Thursday, February 23, 2017.

However, Sri said that there are certain issues that must be criticized. Sri notified that the quality of economic growth in Indonesia needs to be analyzed. Sri asserted that in Indonesia, the effect of one percent economic growth against poverty was never the same.

For example, Sri said that back in 2011 until 2012, one percent economic growth managed to decrease the number of poverty by 0.106 percent.
On the other hand, in 2013 until 2015, one percent economic growth only decreases the number of poverty by 0.033 percent.

Sri added that high poverty rate areas are still concentrated in villages. In a larger scale, Sri said that poverty remains concentrated in areas outside Java, specifically in Maluku and Papua, where the poverty rate is recorded at 21.9 percent, causing a dilemma for the government in allocating funds in the State Budget.

"It's not about taking sides but this is a challenge on where to put every penny of the State Budget, and in what form. Because it would mean a lot," Sri said.

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SOE Holding Ready to Take-in Freeport Shares
Tempo, 24/02/2017

The State-owned Enterprises (SOE) Ministry prepares to purchase some of Freeport Indonesia's divested shares. The shares will be taken by the holding company of mining SOEs.

The ministry's special staff and chief of the Freeport Divestment Team, Budi Gunadi Sadikin, said on Thursday that the the US miner will likely divest 10.64 percent of their shares.

Budi said the government's 9.36-percent stake in Freeport will also be allocated to the Mining SOEs Holding, which is led by Indonesia Asahan Aluminium (Inalum).The members of the holding are Aneka Tambang or Antam, PT Timah, and Bukit Asam. The companies will be merged in the process.

Government Regulation No. 1/2017 requires Freeport Indonesia (IDX: FTPI) to divest 51 percent of its stake to the state. Energy and Mineral Resources Ignasius Jonan said the shares must first be offered to the central government.

Freeport has so far refused the obligatory divestment, saying that 51 percent is too much and said that their contract (KK) only mandates 30 percent.

There is no agreement share price either. Freeport wants to sell 10.64 percent stake for US$1.7 billion while the Energy Ministry claims that their calculations show a price of just US$630 million.

The ministry's director general for coal and mineral Gatot Ariyono said Freeport's offered price is too high as it includes copper reserves until 2041. Price offers, he said, should only take replacement costs into calculations.

The US-based miner has not agreed to change its contract to a special mining license (IUPK) either."We have already developed underground mines," Freeport spokesman Riza Pratama said last week.

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World Bank Announces Initial Study on Benoa Bay Reclamation

Coordinating Minister for Maritime Affairs Luhut Binsar Pandjaitan has asked the World Bank and Udayana University in Bali to carry out comprehensive studies on the Benoa bay reclamation project. The government also ordered a study on the Bali ring road project and the Benoa cruise terminal.

"The world bank started to prepare the Term of Reference. Data is being collected. I also invited the Udayana University to conduct a study independently," Luhut said on the sidelines of the World Ocean Summit 2017 in Nusa Dua, Bali, on Thursday, February 23, 2017.

Luhut predicted that the World Bank and Udayana University would soon complete their preliminary reports on the Benoa Bay reclamation project."I think, the reports will finish next month," Luhut added.According to Luhut, the project is vital, since Bali needs a terminal for cruise ships and ferries."Bali will suffer losses.

There's also plastic garbage issue on beaches. Let's not have bad prejudice. We're working together to make Bali remains interesting," Luhut explained.

Balinese has voiced their rejection towards the Benoa Bay reclamation project. According to I Wayan Suardana, coordinator of the Balinese Forum Against Reclamation (ForBali), as many as 36 indigenous villages have expressed their rejections toward the reclamation project.

Suardana called on Bali Governor Made Mangku Pastika to stop the reclamation project plan operated by PT Tirta Wahana Bali International (TWBI), a business network owned by conglomerate Tommy Winata.

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Minister Encourages Economic Cooperation With Africa, Eurasia, And Latin America
Antara News, 24/02/2017

Foreign Minister Retno Marsudi has called on the Trade Ministry and the Investment Coordinating Board (BKPM) to optimize economic cooperation with countries in three regions, namely Africa, Eurasia, and Latin America.

"We have yet to optimize the engagement with these three regions. We call on Trade Minister and BKPM chairman to focus on these three groups," Retno said, in a working meeting of the Trade Ministry here, on Wednesday.The countrys trade and investment in the three regions would be prioritized without abandoning its traditional markets, she remarked.

The minister said she was accompanied by delegations from state-run firms, Indonesian Chamber of Commerce (Kadin), and Exim Bank during her recent visit to Egypt, South Africa, and Mozambique.

According to Retno, trade partners have always requested the issue of financing mechanism."When we talk about cooperation enhancement with South Africa, they always ask about financing mechanism. This question must be answered by Exim Bank," Retno stated.

Sharing the same opinion, Trade Minister Enggartiasto Lukita noted that Indonesia has yet to target the three regions because of high import duties.

"In Nigeria and some other countries, Indofood has already built an industry. Why not export? To make (its products) cheaper and with no import duty, we must encourage such industries and there must be cooperation," Enggar stated.The ministry would invite investors and foreign trade attaches to identify commodities that could be prioritized.

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Government Allows Private Investment in Infrastructure Projects
Tempo, 24/02/2017

The Public Works and Public Housing secretary general Anita Firmanti said that the ministry has allowed private investors to be involved in infrastructure projects. She said that the government has also been working closely with Japanese investors.

“Deregulation has taken place to allow permits for private investors in the field of infrastructure,” Anita said in a written statement on Thursday, February 23, 2017.

According to Anita, infrastructure sector has seen significant improvements in the last three years as demonstrated by Indonesia’s Global Competitiveness Index in infrastructure in 2016, climbing from 62 to 62.

Anita sees that the government has taken an important move in allowing private investment in infrastructure industry because the need for infrastructure development in Indonesia is still high.

The government is currently facing financial issues in completing the projects. Out of roughly Rp800 trillion needed to finance infrastructure project in the current 5-year period, only around Rp300 trillion has been allocated to the Public Housing Ministry.

Anita said that the government and state-owned enterprises have been dominant in toll road development. She argued that Indonesia could emulate Japan’s private housing development scheme.

Anita added that a large number of infrastructure cooperation agreement with Japan will allow transfer of technology to Indonesian engineers.

In addition, she has also appreciated scholarship programs offered by Japan Government in the field of infrastructure to Indonesian students.

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President Jokowi: MRT Tunnel Entirely Connected
Tempo, 24/02/2017

President Joko “Jokowi” Widodo announced the progress of the Mass Rapid Transit project. The President stated that Jakarta’s MRT tunnel has been entirely connected per Thursday, February 23, 2017.“Today we announce that all of MRT tunnel has been connected,” said Jokowi during his survey to the location of the project.

President Jokowi said that the MRT will be fully operational by March 2019 but will be prepared as early as 2018 during the Asian Games competition. He hopes that the project could be completed within its planned schedule.

Following the funding, Jokowi emphasized that there are many sources of funding combination that can be used. “There are many sources of its funding, it can be obtained from the State Budget, or from the combination of State Budget (APBN) and Local Budget (APBD), it could come from PPP partnership between the government and business entities. It can also come from investments,” the President said.

Jokowi said the combination of funding needs to be realized in order to accelerate the nation’s infrastructure constructions. “In my opinion, we’ve yet to receive complaints regarding the funding from the ministry or SOEs,” he said.

The President was accompanied by Minister of Public Works and Public Housing (PUPR) Basuki Hadimoeljono, and Jakarta Governor Basuki “Ahok” Tjahaja Purnama.

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Construction Of New Semanggi Overpass To Take Only A Month
The Jakarta Post, 24/02/2017

The planned additional overpass on the side of Jl. Gatot Subroto, as a part of the development of the Semanggi traffic cloverleaf in Central Jakarta, is set to be finished within a month, a contractor has said.

"The overpass to the Jakarta police headquarters has been under construction since yesterday. We estimate that it will be finished within a month," deputy general manager of the Semanggi interchange Dani Widiatmoko was quoted by tribunnews.com on Wednesday.

Dani said that the project was hampered by traffic congestion around the area that meant the contractor was only able to work at night."We only have six hours to lift the segment box girder. We can only lift one segment box girder at a time in a day," he said.

The segment box girders, which is 80 meters long, will be lifted with a special lever while to connect the flyovers, the contractor will use the crane, Dani said.

He added that the elevated road would be decorated with special light to give it the appearance of a cloverleaf or semanggi. The flyover gate will also be designed with a cloverleaf picture while the front side would be decorated with the city's icon, Gigi Balong.

The construction of the Semanggi interchange, which will pass Plaza Semanggi, the Jakarta Police headquarters, Sultan Hotel and Wisma Mulia, is expected to be finished in August this year.

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New Road in North Coast of Papua Will Soon be Built
Tempo, 24/02/2017

Public Works and Public Housing Minister Basuki Hadimuljono said that he will open a 47.66 km-long road on the north coast of Papua Province linking Nabire and Waropen Districts, starting from the city borders of Nabire-Kimibay-Legari.

Moreover, a 411.94km-long strategic road linking Legari, Botawa in Waropen District and Gesa in Membramo District will also be opened.
According to Basuki, 77.99km out of the 441.94km-load road has already been opened, 7 kilometers of which have been covered with asphalt.

Basuki said that construction of new roads in Papua is aimed at opening up isolated regions in the provinces. “The direct impact is smoother logistics distributions and lower prices both in Papua and West Papua,” Basuki said in a press statement on Thursday, February 23, 2017.

Basuki said that the road across the north coast of Papua was not included in Trans Papua road project.According to Basuki, Papuans still rely on sea and air transport. During high tide, they are not keen to travel that leads to increasing logistic prices. There is currently 80km-long road linking Nabire and Legari.

The Public Works Ministry will add 3 kilometers in Nabire-Kimibay-Legari road section this year. It will also build 80m-long bridge over Legari River which will cost Rp15 billion.

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RPTRA Supervision will Use IT Systems
Tempo, 24/02/2017

Due to limited human resources, the information technology (IT) systems will be used to supervise all child-friendly integrated public spaces (RPTRA) in the capital.

This time, Jakarta already has 184 RPTRAs, and will be added up to 200 units this year. In addition, the number of park caretakers is only 1,000 people.

Jakarta Governor, Basuki T. Purnama expressed Jakarta Provincial Government is being focused on an application that functions to monitor and control all activities in RPTRA. Thus it will be monitored for 24 hours every day.

"In future, it will be applied on all RPTRAs. We also prepare management to manage them. To support it, we have trained 1,000 people," he stated, after inauguration of Baung RPTRA, Pasar Minggu, South Jakarta, Thursday (2/23).

If the supervision and management recording is manual, it will make it difficult for officers in finding data. But, using the application, they only push a button thus it will display data about RPTRA.

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Lapan to Build Observatory with Largest Telescope in SE Asia
Tempo, 24/02/2017

A national observatory being built in the mountains of Timau, Amfoang Tengah sub-district, Kupang district, East Nusa Tenggara Province, would be the largest observatory with a 3.8 meters telescope in the Southeast Asian region.

Head of the Center for Space Science of the Indonesian National Institute of Aeronautics and Space (Lapan) Clara Yono Yatini said, during the dissemination of information on the observatory development plan in Amfoang Tengah sub-district, on Monday that the telescope would be the largest in the Southeast Asian region.

According to Yatini, the central government has allocated a budget of Rp500 billion for the observatory construction in the mountains of Timau, Kupang district, to speed up the development in the eastern region of Indonesia.

"The observatorys presence would bring the worlds attention to Kupang district, East Nusa Tenggara Province. Hence, the local residents should support the construction plan of this mega project," she added.

She stated that the telescope would be built at a length of 3.8 meters using technology from abroad in order to help see clearly the conditions of outer space.

"While another telescope of Lapan at the Observatory in Bosca, Lembang, West Java Province, has a length of 60 centimeters only, the telescope being built in East Nusa Tenggara Province would be built at a length of 3.8 meters and will have an enormous capability," she noted.

She added that researchers from all over the world would be allowed to obtain more information by using the telescope to observe the sky and space."It takes three years to build the telescope," she remarked.

The telescope, with a length of 3.8 meters, would be an attraction for astronomers from different countries in the world to do research on the space in Timau mountains from all directions, she stated.

"Moreover, the sky above the mountains of Timau looks very good, so it will be the main attraction for researchers coming to East Nusa Tenggara to conduct research on space," she noted.

She added that the presence of researchers from various countries would become the impetus for the citizens in Amfoang Tengah sub-district to boost local economic activities and develop the areas."The researchers would be in the areas of Timau for doing research on space," she said.

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Indonesia To Reduce Plastic Wastes By 70 Percent
Antara News, 24/02/2017

The Indonesian government is committed to reducing plastic wastes by 70 percent by the end of 2025, initiated with the launch of a national action plan for tackling plastic wastes in oceans.

Indonesia, along with the United Nations Environment Programme (UNEP), has launched a campaign to remove plastic wastes in Nusa Dua, Bali, on Thursday.

"By the end of 2025, we will reduce 70 percent of the plastic wastes. Indonesia has launched a national action plan for tackling marine plastic wastes," Coordinating Minister for Maritime Affairs Luhut Binsar Panjaitan stated in a press release received by ANTARA here, Thursday.

The national action plan contains concrete strategies and measures to handle plastic wastes on land, in coastal areas, and in the sea."The government will provide funding of up to US$1 billion per year to implement the strategy," he noted.

According to Panjaitan, the financial support will significantly contribute to implementing the national program to make Indonesia free of wastes.

He said that marine plastic wastes pose a threat to the existence of fish, mammals, sea birds, and coral reefs in the world."Those negatively affected by the wastes are the locals, as tourists will not visit places that are full of plastic wastes," he remarked.

Panjaitan pointed out that Indonesia has been successful in its campaign against fish poachers and armed pirates. The government is now ready to face the challenge of tackling marine plastic debris.

"We are more than ready to play an active role in handling marine plastic wastes and be at the forefront of the UN global campaign for cleaning the seas," he emphasized.

The launch event was attended by Minister of Environment and Forestry Siti Nurbaya and UNEP Director Erik Solheim

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Indonesia Seeks To Strengthen Cooperation With Australia
Antara News, 24/02/2017

Indonesia is seeking to enhance its cooperation with Australia during President Joko Widodos state visit to the neighboring country on Feb 25-26 over the weekend.

"This will be an important visit, as it is a visit to a close neighbor," spokesperson of the Ministry of Foreign Affairs Arrmanatha Nasir noted during a press briefing here on Thursday.

President Widodo is scheduled to have a state dinner with Prime Minister Malcom Turbull accompanied by their spouses during the visit to Australia, Nasir stated.

President Widodo will discuss several issues and areas of cooperation, such as the acceleration of the Indonesia-Australia Comprehensive Economic Partnership Agreement and the expansion of cooperation in the education, tourism, cybersecurity, maritime, and investment sectors.

Moreover, Indonesia will promote its sustainable products, such as timber, palm oil, and pulp and paper, in the Australian market. In terms of people-to-people cooperation, Indonesia will inaugurate three Indonesian language centers in Canberra, Perth, and Melbourne.
President Widodo will also meet Australian businessmen and enterprises as well as Indonesian citizens residing in Australia, Nasir revealed.

The suspended military cooperation between the two countries is also expected to continue. "It depends on the investigation result delivered to the TNI," Nasir noted.

Minister of Foreign Affairs Retno Marsudi is scheduled to accompany the president along with several high-ranking Indonesian officials.
President Widodo had earlier postponed his plan to visit Australia in November after a protest in Jakarta turned violent.
The volatile situation on the domestic front had required the president to stay in Indonesia.

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Indonesian Hunts For Tourism Funding With New Mutual Funds Scheme
The Jakata Post, 24/02/2017

The government is teaming up with fund management companies to prepare for the launch of a limited participation mutual funds (RDPT) product by March this year.

The government hopes this scheme will support the development of the country’s priority tourist destinations.Tourism Minister Arief Yahya said the RDPT scheme was expected to collect around Rp 1 trillion (US$75 million) from investors this year as an alternative source of funding.

One of fund managers involved in the preparation, Arief said, was state-owned fund manager Bahana TCW Investment Management.
“If we can accelerate the [launch], this mutual funds product will be the [country’s] first in the tourist sector," he said on Wednesday as quoted by Kontan.co.id.

In the long run, the scheme could potentially bring in Rp 57 trillion in alternative funding to support infrastructure development in the tourist sector.

Arief said the RDPT product was designed to have a maturity period of eight years and was convertible to equity.The alternative funding scheme is necessary because of limits in the state budget and minor foreign direct investment (FDI) in the sector.

The government needs at least Rp 200 trillion this year to develop infrastructure at its 10 designated priority destinations. To date, it has only secured Rp 30 trillion for the purpose.

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