Update News February 27, 2017

In The News

Saudi King`s Visit A Positive Signal For Indonesian Economy: Djalal
Antara News, 27/02/2017

The upcoming visit of Saudi King Salman bin Abdulaziz al-Saud is a positive signal that Saudi Arabia wants to strengthen economic cooperation with Indonesia, former deputy foreign minister, Dino Patti Djalal, noted.

"King Salman does not go outside his country too often. Hence, if he is coming to Indonesia and is bringing along so many delegates, it is a positive signal for Indonesia," Djalal said after addressing a seminar on ASEAN, organized by the Foreign Policy Community of Indonesia on Friday.

The visit of King Salman, who will be accompanied by 1,500 delegates including 10 ministers and 25 princes, should be utilized by Indonesia to attract more investment for infrastructure projects initiated by the government."The visit is the perfect occasion to draw in Saudi petro dollars for infrastructure investment," Djalal pointed out.

King Salman is scheduled to visit Indonesia from March 1 to 9. After meeting President Joko Widodo in Jakarta, he will depart for Bali, where he will take some time off. It will be the first visit of a Saudi King in 47 years.

Earlier, Cabinet Secretary Pramono Anung had said that during his visit, King Salman would discuss five cooperation agreements on the promotion of arts and cultural heritages, exchange of the experts for better arrangements during hajj and umrah, promotion of modern Islam through preaching and exchange of religious scholars, increasing the frequency of flights from Indonesia to Saudi Arabia, as well as combating cross-border crimes.

The issue of cooperation regarding the construction of an oil refinery in Cilacap, Central Java, will also be followed up by the state-owned energy company, PT Pertamina, and the Saudi Arabian Oil Company. The refinery involves an investment of US$6 billion.

The Investment Coordinating Board (BKPM) has recorded that investment worth only US$900 thousand for 44 projects in Indonesia was realized from Saudi Arabia in 2016. It placed Saudi Arabia at rank 57, below South Africa which invested US$1 million, and Mali which was able to invest US$1.1 million in Indonesia in the same year.

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French President's Indonesia Visit Is Expected to Boost Investment: Ambassador
The Jakarta Globe, 27/02/2017

Boosting investment is high on the agenda of French President Francois Hollande's visit to Indonesia next month, French ambassador said on Friday (24/02).

The president will be accompanied by 30 top executives of French companies. Prior to the visit, on Feb. 20-21, representatives of Mouvement des Entreprises de France (MEDEF), the largest French business lobby group, arrived to to Indonesia to deepen their knowledge about its investment climate.

President Hollande's visit is scheduled for March 29. According to French Ambassador Jean-Charles Berthonnet, it is going to further boost French investment in Indonesia.

"They have to come to Indonesia to invest. That's why we will have a big delegation," Berthonnet said.
France is currently particularly interested in the renewable energy sector, he added.

Around 200 French companies operate in Indonesia in industries ranging from automotive to tourism services.

"There are a lot of possibilities here. French companies are now becoming aware of the potential," Berthonnet said during his visit to Jakarta Globe newsroom.

In 2015, France invested $131.6 million into 197 projects in Indonesia, according to data from the Ministry of Trade. In the same year, the value of trade between the two countries reached $2.3 billion.

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Introduce National Standard For Business Setup: Jokowi
The Jakarta Post,27/02/2017

President Joko “Jokowi” Widodo has said that Indonesia needs to adopt global business setup standards to encourage investors worldwide to pour their capital into Southeast Asia's biggest economy.

However, before this, the local governments in 560 provinces, regencies and cities across the country needed to adopt national standards first, the President said.Under the Jokowi administration, thousands of business regulations have been annulled to facilitate simpler licensing to do business.

The reforms have largely worked well at the central government level but not at the regional level where businesspeople have reported dozens of different forms and licenses must be completed before starting a business.

“The first step is national standards. If we cannot do that, how are we going to use international standards?” he asked representatives from 560 regional administrations during the National Investment Coordinating Board (BKPM) work meeting at Bali Nusa Dua Convention Center over the weekend.

Jokowi has asked local officials to coordinate with related agencies to annul any unnecessary bylaws that could lead to lengthy and costly business setup.

Should the administrations not cooperate well, staffers could report bothersome bylaws to BKPM to help scrap them, Jokowi noted.

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Australian Firms to Invest US$5bn in Indonesia
Tempo, 27/02/2017
The Investment Coordinating Board (BKPM) noted that 10 Australian companies have shown interest to invest around US$4-5 billion in Indonesia. Executive officers of the companies expressed their interest during a meeting with President Joko “Jokowi” Widodo in Sydney on Saturday.

BKPM chairman Thomas Trikasih Lembong said that the companies are interested in investing in the fields of mining and processing, food and beverages, tourism and hotels, as well as infrastructure.

President Jokowi spoke to each of the COEs attending the business meeting to find out their interest and commitment to expanding their businesses to Indonesia. The meeting was also aimed at receiving inputs from Australian businesses over their investment experience in Indonesia.

Among other things, Australian investors suggested easier halal certification for multivitamin products. Mining companies and mineral processing also made presentations on investment in North Sumatra.

Thomas said that companies have expressed their interest in expanding their business. “One of whom is an investor in hotel sector who has 8,000 hotels across the globe, 1,200 in China and only 10 in Indonesia,” he said. “They have planned to improve their hotel network in Indonesia to 100 in three to four years.”

In the latest survey of Australian business community conducted by Austrade puts Indonesia in the big five of priority countries for investment.

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IA-CEPA Negotiations To Be Completed This Year
Antara News, 27/02/2017

The discussions around Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) is hoped to be completed in 2017, Retno Marsudi, Minister of Foreign Affairs and Thomas Lembong, Head of the Capital Investment Coordinating Board (BKPM), said.

"The Trade minister is also involved. There has just been a discussion between Indonesian and Australian delegations in Canberra," Lembong stated in Sydney on Saturday (Feb. 25).

He further noted that the negotiation team is currently delivering their report regarding the progress of the discussion to Trade Minister Enggartiasto Lukita.

"So far, we are targeting to have it completed by this year. We want the agreement to cover as much sectors as possible, because trade agreements are not being signed very often.

Hence, the negotiation process needs to be maximized, as we might not do it again for another 7, 10, or 14 years to come," he remarked.
He believed that all parties involved need to be progressive in understanding the foundations of the economic partnership agreement.

Meanwhile, Retno stated that the sixth IA-CEPA agreement was held on Feb 24 (Friday)."IA-CEPA is President Joko Widodos main discussion issue in this visit to Australia, and it is one of his priorities.

I had also met Australias Foreign Minister Penny Wong and we also talked about IA-CEPA," she stated.She further stated that each country surely has its own interests in the agreement, as they benefit the country and the people.

"For that reason, we strive to come up with a meeting point in the negotiations, and both countries have agreed to intensify the discussions," she remarked.The minister hoped that the agreement would be completed this year, despite the ambitious targets.

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President Jokowi Meets 13 Major Australian Investors
Antara News, 27/02/2017

President Joko Widodo (Jokowi) held a business meeting here on Saturday (Feb. 25) with 13 major Australian investors during his state visit to Australia.

"Today, the president has begun his state visit and has held a business meeting with 13 major business players in the fields of mining, hospitality, and other fields," Indonesian Foreign Minister Retno LP Marsudi said in Sydney.

She said that during the meeting, the Australian business players expressed their confidence to expand businesses in Indonesia.According to the minister, one of the investors directly conveyed their expression of confidence (in the business climate in Indonesia).

Last year, they conducted a survey and found that Indonesia was among the top five countries which won the trust of investors and was given priority for their business expansion, Retno stated."I think it is very good if we are in the top five position of the Australian business players in Indonesia," the foreign minister added.

In the meeting, the investors expressed their commitment to create business expansion in the coming years. "This is the first agenda, and in a few moments, the president will meet the New South Wales premier," she noted.

New South Wales (NSW) has an important meaning for Indonesia, because in the Australian state, some 41,435 of the 68 thousand people are Indonesian citizens. 

There are 20 thousand Indonesian students of which half of them live in NSW."With NSW, the Indonesia-Australia trade will also be significant ," Retno remarked.

Hence, the president will meet NSWs Premier Gladys Berejiklian to discuss the cooperation that could be established between NSW and Indonesia.

Jokowi will also join for dinner at the residence of Australian Prime Minister Turnbull. "This shows the closeness between the prime minister and the president," she added.

The next day, Jokowi will have a tight agenda, including talks with Turnbull, which will begin as a one-on-one meet followed by a bilateral meeting, and the signing of a MoU on the maritime and creative economy sectors.

There will also be a state reception by the Governor General, which will be followed by a meeting and a lunch hosted by the governor general.  The final agenda includes a meeting between the president and the Indonesian society in Sydney.

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Construction of Airport Rail Link to be Completed in March 2017
Tempo, 27/02/2017

PT Angkasa Pura II (Persero) claimed that the construction of railway station in Soekarno-Hatta International airport will be completed by the end of March 2017.

The 160 billion project has progressed more than 85 percent and it is right on schedule, said PT Angkasa Pura II president director Muhammad Awaluddin on Sunday (26/2).

The capacity of airport rail link can take up to 3.500 passengers. In addition, this rail link offers  number of facilities namely ticketing counter, public hall, tapping gate in, waiting lounge, commercial area, toilet, prayer room, station headroom, connectivity integrated building, Skytrain station, and others.

This rail link will be operated by PT Railink, a subsidary of PT Angkasa Pura II (Persero) and PT Kereta Api Indonesia
This airport train will begin to operate on July 2017 with six trains that can take up to 272 passagers

other words, the train can serve 35.000 passengers. The track spans to 36,3 km in total.Awaluddin estimates that this airport train will cut 20 to 30 percent of public or private vehicles heading to the airport.

This airport train is designed to be connected to Skytrain station, a driverless inter-terminal train. This sophisticated transport with Automated People Mover System (APMS) will be operated on the upcoming June 2017.

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Gov`t to Build New 30 Dams This Year
Tempo, 27/02/2017

Public Works and Public Housing Ministry is planning to build 30 new dams this year. All those dams are now at construction stage.

“The designs of the dams are still waiting for the approval from the Indonesian National Committee for Big Dams (KNI-BB),” said Director General of Water Resoures of the Public Water Resources of the Public Works and Public Housing Ministry Imam Santoso  on Saturday (25/2).

Imam added that budget allocated to build the dams this year reaches Rp7 trillion. Some of those dams to be build are in Aceh, North Sumatera, South Sumatera and Central Java provinces.Imam added that the construction of those dams is part of the government’s plan to build 65 dams all over Indonesia.

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AP I Allocates Rp54 Billion for Development of 6 Airports
Tempo, 27/02/2017

State-owned airport operator PT Angkasa Pura I (Persero) has budgeted up to 54 billion rupiahs to speed up constructions and development of six airports in Indonesia.

Revenues earned from non-aeronautics businesses are also maximized to balance the source of income of the company.“We set three airports as our main priority airports in Kulonprogo, Semarang, and Banjarmasin," PT Angkasa Pura I CEO Danang S. Baskoro said when he attended the 53rd anniversary of the company in Bogor, West Java, on Saturday (25/02). "Our next priority is airports in Bali, Makassar, and Surabaya."

Danang added that it takes three to four years to build and increase the capacity of an airport."But in this momentum of our 53rd anniversary, we will boost such development to only one to two years."

With such acceleration, AP I targets to yield 8 billion revenue in 2017 with 1.2 billion profit."The need of this development and leverage is high due to significant increase of the growth of incoming passengers to Indonesia."

AP I, Danang said, will also reinforce non-aeronautics business in other airports. Five branches of Angkasa Pura is expected to fully run this business in the foreseeable future."I expect from the 8 billion revenue, 45 percent is from non-aeronautics and it will be better if it is 50 percent."

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Indonesia's Telecom Infrastructure to Beat Thailand by 2019: Minister
The Jakarta Globe, 27/02/2017

Minister of Communications and Information Technology Rudiantara has said that Indonesia's telecommunications infrastructure may surpass that of Thailand by 2019.

During his visit to Manokwari, West Papua, on Friday (24/02), the minister said Indonesia ranks fourth in Southeast Asia in terms of the infrastructure of its telecommunications networks.

"Singapore is first, followed by Thailand and Malaysia, the fourth place goes to Indonesia" the minister said, as quoted by Antara news agency.

Rudiantara said the government's Palapa Ring Project to run an undersea fiber optic cable is expected to provide internet access across the archipelago.

The project is divided into three parts: western — covering Sumatra and Riau, central — Bali, West Nusa Tenggara, Kalimantan and Sulawesi — and eastern — East Nusa Tenggara, Maluku, West Papua and Papua.

"We seek to complete this project by 2019 and when it's ready, with our telecommunications infrastructure we'll be second, leaving Thailand behind," the minister added.

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