Update News November 09, 2017

In The News


The Jokowi Administration`s Towering Targets
Temhpo.co ,08 N0vember 2017

TEMPO.CO, Jakarta - Touting the slogan of building up the country starting from the outskirts, the administration of President Joko Widodo (Jokowi) and Vice President Jusuf Kalla has been pushing for the construction of infrastructure projects which reach even the nation’s most remote areas. Their dream is to provide connectivity to all regions and to end economic disparity around the country.

Divided into national strategic projects and priority projects, the total budget needed for the infrastructure work from 2015-2019 comes to Rp4,197 trillion. Of that amount, 42 percent of the financing relies on the State Budget (APBN) and funds from State-Owned Enterprises (SOEs). The government is hoping the rest will come from investment from private companies. Unlike the government, private companies are minutely calculating the feasibility of infrastructure projects.

October of this year marks three years of the Jokowi-Kalla administration. Based on data from the Ministry of Finance, some infrastructure projects in Indonesia have already used Rp994.7 trillion of national budget funds. 

This figure is much higher compared to the five-year infrastructure budget of the previous administration. However, despite this large budget, overall achievement is only at around 10 percent. Most of the projects are still under construction, and some are still being prepared.

• National: two programs and 12 projects

Budget: Rp1,320 trillion

• Sumatra: 61 projects

Budget: Rp638 trillion

• Sumatra

» Five roadways of the Trans-Sumatra toll road

» International Hub Port of Kuala Tanjung, North Sumatra

» Light rail transit in South Sumatra

» Mine to mouth steam power plant

» Revitalization of existing oil refineries in Dumai and Plaju

» Gas and steam power plant projects

» Drinking Water Provision System in Lampung

• Kalimantan: 24 projects

Budget: Rp564 trillion


» Border crossing post and supporting facilities at Nanga Badau, Kapuas Hulu, West Kalimantan

» Border crossing post and supporting facilities at Aruk, Sambas, West Kalimantan

• Kalimantan

» Roadway for the Serang-Balikpapan-Samarinda Toll Road

» Revitalization of existing oil refineries in Balikpapan

» Gas and steam power plant projects

» Mine to mouth steam power plant

» Trains/Railway in East Kalimantan

» Indonesian Deepwater Development

» Bontang Oil Refinery, East Kalimantan


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Bappenas expects more private involvement in infrastructure projects
Antara News, 09 November 2017

Jakarta (ANTARA News) - The National Development Planning Agency (Bappenas) expects more private companies to be involved in financing a number of infrastructure projects under the Non-Budget Investment Financing (PINA) scheme or the Government - Private Companies Cooperation (KPBU) scheme.

"We hope by next year, there will be more investors in infrastructure development priority projects, especially under the schemes of PINA or KPBU," Bappenas Head Bambang Brodjonegoro remarked, when opening Indonesia Infrastructure Week (IIW) 2017 in Jakarta, on Wednesday.

The infrastructure projects need Rp4,769 trillion (about US$352.7 billion), based on the National Medium Term Development Plan 2015-2019.

Out of the total budget, the government budget is estimated to be only Rp1,978.6 trillion (41.3 percent), the state-owned enterprises to be at Rp1,066.2 trillion (22.2 percent), while the rest Rp1,751.5 trillion (36.5 percent) is expected to be from the private sector 

In the PINA scheme, there are 16 projects that have been in the identification stage till now, with a total value of Rp211.3 trillion, and one project in preparation stage, worth Rp13.4 trillion.

Sixteen PINA projects in the identification phase include the construction of the R80 turboprop aircraft by PT RAI, 10 power plant projects by PT PJB, Flores Islands regional development by Flores Prosperindo Ltd, diesel-gas power plant development in Pesanggaran, Bali, airport development in Kulon Progo, Yogyakarta, as well as Kertajati Airport and two aerocity development projects in West Java.

One PINA project in the preparatory stage is the toll road construction by PT Hutama Marga Waskita."In 2017, we are targeting PINA financing of $1.5 billion, while in 2018, we expect $ 3 billion under PINA scheme," Bambang remarked.

Meanwhile, till date, there are 12 projects in construction phase under KPBU scheme, six projects in transaction stage, 27 projects in preparatory stage, as well as one project in financial close phase.

In 2018, the government will offer 10 Quick Win Projects, such as Nambo regional waste management project, Probowangi Toll Road, Bandar Lampung Drinking Water Supply System, Serang Panimbang Toll Road, Jakarta-Cikampek Toll Road, Jatiluhur Drinking Water Supply System, West Semarang Drinking Water Supply System, Suramadu Toll Bridge, Pekanbaru Drinking Water Supply System, and Sidoarjo hospital project.

Bambang hoped that many investors will be involved in those projects."The important thing is there are 10 Quick Win Projects 2018. I hope these projects attract the Indonesian Chamber of Commerce and Industry (Kadin) and the investors," Bambang revealed.


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315 construction firms join infrastructure expo
The Jakarta Post, November 08 2017

The Indonesia Infrastructure Week (IIW) 2017 expo organized by the Chamber of Commerce and Industry (Kadin) and the Public Works and Housing Ministry will see 315 companies present their products and services this year.

Kadin chairman Rosan P. Roeslani called on the government to strengthen cooperation between private companies and state-owned enterprises in developing infrastructure across the country.

“We expect synergy between the government, state-owned enterprises and private companies to help smoothen the process of infrastructure construction,” Rosan said on Wednesday at the opening ceremony of IIW 2017 at the Jakarta Convention Center, as reported by kompas.com.It presents number of infrastructure projects as well as information about investing in Indonesia.

The National Development Planning Minister and head of the National Development Planning Agency (Bapennas), Bambang Brodjonegoro, explained that the event aimed to showcase projects currently in the construction phase as well as those planned for the future.“Infrastructure projects are for the future of this country, not only for current needs,” said Bambang when opening the event.

Apart from displaying the infrastructure projects, the organizers of the IIW 2017 also plan to hold a number of events, including seminars and conferences on issues like investment, transportation and connectivity infrastructure and industrial development in Indonesia. 


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Task forces to be to accelerate ease of doing business
Antara News,09 November 2017

Jakarta (ANTARA News) - Indonesia, which has been able to improve its ease of doing business index from 91 to 72, will establish task forces for ease of doing business in order to further improve its business climate.

The government is now preparing a guideline for the establishment of the task forces for the acceleration of the ease of doing business in Indonesia. 
The task forces will be established as a follow up to the Presidential Regulation No. 91/2017 on the Ease of Doing Business.

The task forces, which are expected to help ease the licensing process, will consist of a national task force, a leading sector task force, and a supporting task force.
"Several ministries and agencies are working together to form the National Task Force," Coordinating Minister for Economic Affairs Darmin Nasution remarked in Jakarta on Friday (Nov 3).

He explained that the National Task Force will be the main body, which is directly under the president, and will oversee two major institutions, namely the Leading Sector Task Force and the Supporting Task Force.

The minister revealed that the Leading Sector Task Force will supervise the investment licensing process, undertake debottlenecking issues, and report regularly to the National Task Force.

The Leading Sector Task Force consists of several ministries, such as the Ministry of Energy and Mineral Resources, the Ministry of Agriculture, the Ministry of Trade, the Ministry of Industry, and the Ministry of Maritime Affairs and Fisheries, which have the authority in business activities.

"Meanwhile, the Supporting Taskforce, such as the Ministry of Law and Human Rights, will form a task force in the ministry, whose job is to support a company that wants to standardize its name," Nasution elaborated.

In addition, the government will also establish supporting task forces at provincial and district/municipality levels, consisting of representatives of local administrations, including the Integrated One Stop Service (PTSP).

In ministries, the task forces will be led by secretary-generals, while in regional administrations, they will be led by regional secretaries. The task forces would address the sluggish pace of the licensing process in all levels of bureaucracy."The task force will record permit requests that have not yet finished. If there is a problem, each task force should settle it," Nasution stated.

He ensured that all these task forces would be formed quickly so that all the investment licenses could be resolved soon. "A lot of investments are actually getting approval, but not yet finished," he pointed out.

Indonesia has taken the biggest step toward ease of doing business among Asia Pacific nations since 2005, the World Bank said in its latest report on Doing Business 2018; Reforming to Create Jobs".

"Indonesia become a country doing the biggest improvement in business regulation since 2005,"Operation Analyst of the World Bank Dorina Georgieva said through a video conference in Jakarta on Wednesday (Nov 1).Indonesia is ranked 72 among 190 economies in the ease of doing business, according to the latest World Bank annual ratings. 

The rank of Indonesia improved to 72 in 2017 from 91 in 2016. Ease of Doing Business in Indonesia averaged 113.10 from 2008 until 2017, reaching an all time high of 129 in 2008 and a record low of 72 in 2017

Indonesia leads followed by Cambodia, the Solomon Islands, Brunei and Malaysia. In four years Indonesia climbed in ranking from the 114th in 2014, to 109th in 2015, to the 91st in 2016, to the 72nd this year, Georgieva said.

In 2016-2017, Indonesia launched seven reforms to increase the level of ease of doing business, or the largest number of reforms made in a year. 
In the East Asian and Pacific region, Indonesia was second only to Brunei Darussalam and Thailand which already took eight steps of reform to ease business.
The seven reforms included lower cost of starting business, down from 19.4 percent to 10.9 percent of per capita income.

According to Rodrigo A Chaves, chief of the World Bank Representative for Indonesia, Indonesia has accelerated the pace of reforms in the past few years, and the effort has been fruitful now. "We praise the government for its determination to improve the business climate in Indonesia. 

Going ahead with the momentum and effort to expand the reform, involving transparency and competition, is key to further stimulate the private sector in this country," Chaves noted meanwhile.

Indonesia has made significant progress in a number of areas, which is measured by the doing business index. Indonesia has become one of the top 10 reformers in the world, by adopting 39 reform indicators of doing business for 15 years.


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Investment has grown in line with business confidence: Finance minister
Antara News,09 November 2017

Jakarta (ANTARA News) - Investment has grown positively in the third quarter owing to business confidence in the countrys economic conditions, Indonesian Finance Minister Sri Mulyani stated.
"Investment has grown seven percent due to the confidence of business players," she remarked here on Wednesday.

She said the realization of the gross fixed capital formation growth, reaching 7.11 percent during the period, had surpassed the expectations of the government that had, in fact, only forecast it at some six percent.

In view of this, she said the government will continue to maintain the momentum, so that the spending component can steadily contribute to the national economy to ensure more optimal growth.

Other spending components that are being prioritized are the exports of goods and services that have also grown positively, so far, this year. In the third quarter of 2017, this sector grew by up to 17.27 percent.

The imports component has also grown during the period to indirectly affect the household consumption sectors performance as well as investment that has, so far, become the biggest contributors to the countrys gross domestic product (GDP).

"Initially, we had predicted that the exports would only increase seven to eight percent, but they have grown by up to 17 percent. Imports of especially raw materials also showed increasing business confidence. This is a very positive sign," Mulyani said.

However, household consumption only grew 4.93 percent in the third quarter, and to this end, the government will direct its efforts to bring about an improvement, as it was related to a change in the pattern of household consumption in the middle and upper classes of the community, she said.

To maintain the purchasing power, she said the government had, so far, offered a social aid program to the low- and middle-income brackets, so that their pattern of consumption would be maintained and would not be affected significantly.

Indonesias economy grew 5.06 percent in the third quarter, driven by exports that grew 17.27 percent and gross fixed capital formation at 7.11 percent, the Central Bureau of Statistics had stated earlier. 

Growth in the period was also contributed by consumption of non-profit institutions serving households that grew 6.01 percent, household consumption that rose 4.93 percent, and government consumption that increased 3.46 percent.

The biggest contributor to the countrys GDP was household consumption, reaching 55.68 percent in the third quarter of 2017; however, its low growth has become the governments main focus.


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Indonesia to push for conclusion of three bilateral negotiations
Antara News,09 November 2017

Jakarta (ANTARA News) - The government is pushing for the conclusion of three negotiations in the Comprehensive Economic Partnership Agreement (CEPA) here to be the basis to boost the countrys exports and economic growth. 

Trade Minister Enggartiasto Lukita said the three negotiations are Indonesia-Chile CEPA (IC-CEPA), Indonesia-European Free Trade Association/EFTA CEPA (IE-CEPA), and Indonesia-Australia CEPA (IA-CEPA). 

"Of 16 negotiations and three reviews to be concluded, three are to be reached this year," Meanwhile, 10-13 other agreement are to be reached next year," Enggartiasto said via telephone on Wednesday. 

The minister said export is to be one of the main drivers of the countrys economic growth . In the third quarter of 2017, the countrys economy grew 5.06 percent in which exports were one of the driving motors. 

The highest growth rate year-on-year was recorded in the exports of goods and services that grew 17.27 percent contributing 20.50 percent to the countrys GDP. 
The main export destination for Indonesian commodities are China, the United States, Japan, India, and Singapore. 

"The economic growth would expand when exports increase. The conclusion of the negotiations would open new markets to increase exports," Enggartiasto said. 
Negotiations between Indonesia and Chile in the 6th session of IC-CEPA is taking place from Nov. 6 to 10 2017.

Indonesia and Chile agree that IC-CEPA will begin by phases first with trade in goods to be followed with agreement in investment , service or other depending on conditions.

Bilateral trade between Indonesia and Chile in five year period of 2012-2016 dropped 12.09 percent. In the period of January-August 2017 trade between the two countries grew 27 percent to US$201.31 million from US$158.36 million in the same period in the previous year.

Meanwhile, the 13th round of negotiations between Indonesia and EFTA (IE-CEPA) is from Nov. 7 to 10 , 2017. The IE-CEPA negotiation is a full negotiation , meaning service trade and investment also become issues to be negotiated. 

Main issues that still need further discussion are market access for goods and service trade and investment. In addition, EFTA also show strong interest in intellectual property protection. Indonesia will push for issue of access of workers and cooperation. 

Meanwhile, the IA-CEPA negotiations will be held from Nov. 13 to 17 , 2017 . The 10th round of talks would be the last round as it would be closed by the heads of state who met in February, 2017. 

Total bilateral trade between Indonesia and Australia reached US$8.5 billion in 2016. Exports by Indonesia were valued at US$3.2 billion and imports worth US$5.3 billion or a deficit of US$2.1 billion for Indonesia.


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Bappenas: Indonesia Can be a Developed Country in 2045
Tempo.co,09 November 2017

TEMPO.CO, Jakarta - National Development Planning Agency (Bappenas) Head Bambang S. Brodjonegoro recently stated that Indonesia would be able to become a developed country by the year 2045 or 100 years post-independence if the economic growth is consistent within 5 percent.

“If Indonesia can be consistent with a 5 percent average growth scenario, Indonesia will become a high-income country by the year 2038 or 2039,” said Bambang during the opening of the ‘Indonesia Infrastructure Week’ event on Wednesday, November 8.

A consistent economic growth of 5 percent can translate into a US$20,000 state revenue per capita. Indonesia’s current revenue is around US$3,600 to US$3,700.“The challenge is will we able to maintain that 5 percent growth annually?” said Bambang. He also underlined the importance of infrastructure development as an asset to improve Indonesia’s economy.

Indonesia’s infrastructure towards the country’s GDP in 2012 has only reached 38 percent. Indonesia is still running behind compared to India (58 percent), China (76 percent), Poland (80 percent), and South Africa (87 percent). Meanwhile, Japan as a developed country has a GDP to infrastructure stock of 178 percent.


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Bogor - Bandung Double Track to Cost Rp1.1 Trillion
Tempo.co,08 November 2017

TEMPO.CO, Sukabumi - Transport Minister Budi Karya Sumadi said construction of double track railway between Bogor and Bandung via Sukabumi and Cianjur is estimated to cost Rp1.1 trillion.
"For the time being fund set aside for the project is Rp200 billion from the state budget," Budi Karya said here on Tuesday on the sidelines of a dialog on connectivity in southern Java.

The fund would be available by phases and construction is to start early 2018, and to be completed in 2019, he said.The first phase would construction of the track between Bogor and Sukabumi to be continued with the Sukabumi-Cianjur section and Cianjur-Bandung.

The rail track would facilitate transport of passengers and goods mainly food commodities in the regions."The operation of the double track would also facilitate transport of tourists visiting Sukabumi," the minister said.


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Jakarta Bay Reclamation Project being Implemented in Two Stages
Tempo.co,09 November 2017

TEMPO.CO, Jakarta - The Coordinating Ministry of Maritime Affairs has explained that the Jakarta Bay reclamation project is being implemented in two stages to protect the state capital from the threat of land subsidence.

Ministry`s Deputy for Infrastructure Coordination Ridwan Djamaluddin remarked here on Tuesday that the project is being carried in two stages: emergency and monitoring.
He said the emergency stage is being implemented by the central government to protect the coastal areas stretching 120 kilometers and are often inundated.According to Djamaluddin, the monitoring stage aims to gauge the extent of land subsidence in order to determine whether a giant embankment project needs to be built.

"If land subsidence can be controlled, we expect that the giant embankment will not need to be built. However, a natural decline in the soil could not be avoided, so we need to consider whether to build the embankment," he pointed out.

Djamaluddin remarked that the reclamation project, whose study was integrated with the National Capital Integrated Coastal Development, has a long-term vision, with the aim of improving the ecological conditions of the north coast of Jakarta as well as developing a new economy in the reclamation area."The reclamation project has a long-term vision and is integrated to improve the ecological conditions and the northern coastal areas of Jakarta," he said.

Hence, Vice President Jusuf Kalla has said the government will go ahead with the reclamation of Jakarta Bay to build two islands, C and D, out of the total 14 islands planned to be constructed earlier.

"The government did not say that the reclamation project would be continued, but it has stated that the ongoing project will be continued, and I think the Jakarta administration has agreed to this," Kalla stated recently.

According to Kalla, the decision to continue the ongoing project had been discussed between the central and Jakarta administrations by taking into account its efficiency.
"We had been discussing about the existing projects, as it is impossible to demolish them. It would be costlier to demolish them than to continue with the construction," he added.

Kalla admitted to Jakarta Governor Anies Baswedan updating him about the decision."I have told Baswedan that the islands must offer more benefits to the public and government," he noted.

Hence, Kalla reiterated that the government will focus on completing the construction of C and D Islands of the Jakarta Bay Reclamation and manage their use to offer benefits to the local people and the Jakarta government.


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Sandiaga Uno: Revoking Motorcycle Ban will not Cause Congestion
Tempo.co,08 November 2017

TEMPO.CO, Jakarta - Deputy Governor of Jakarta Sandiaga Uno guarantees that motorcyclists will not cause severe traffic congestions in Central Jakarta once the motorcycle ban is revoked.

Sandiaga Uno’s statement was a direct response to the Regional People's Legislative Assembly (DPRD) Chairman Prasetio Edi Marsudi who refused to repeal the motorcycle ban regulated under Jakarta Provincial Governor Regulation No 141/2015 on banning motorcycles.

Prasetyo reasoned that Jakarta’s protocol streets are often passed by VVIP State Officials such as the President and Vice President. He reminded that motorcycles must be well-regulated in the vicinity of the State Palace (Ring 1).

The motorcycle ban was introduced by former Jakarta Governor Basuki Tjahaja Purnama or Ahok throughout M.H. Thamrin up to West Merdeka street. The ban was originally supposed to be expanded up to Bunderan Senayan but was canceled following protests from motorcycle users.
Sandiaga Uno did not reveal his specific plan in handling potential uncontrolled congestions once the ban gets lifted. He said that it can be avoided by implementing assertive regulations.


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Personal data protection bill 'priority' for House, ministry claims
The Jakarta Post,08 November 2017

The Communications and Information Ministry will urge the House of Representatives to pass the personal data protection bill as the latter has listed it in its 2018 national priority legislation program (Prolegnas), the ministry’s highest ranking official said.

“The House has confirmed that the bill, which was initiated by the ministry, is prioritized for deliberation and has been included in next year’s Prolegnas,” said the ministry’s director general for post and informatics technology, Ahmad Ramli, on Tuesday.The bill has been in the 2015-2019 Prolegnas since 2016, but there has been no progress in the deliberation of the draft law.

Concerns about personal data security has emerged recently after the government required every prepaid mobile phone subscriber to register their number using their family card (KK) and resident identity number (NIK). Resident IDs hold several sensitive personal data including fingerprints and mothers’ maiden names.

Activists, who criticized the requirement, said Indonesia does not have laws regulating the protection of personal data in the electronic system and the only policy regarding the matter had been a 2016 ministerial regulation.

The government dismissed these concerns and said there were regulations guaranteeing the security of the civil registry data.“Six articles in the 2013 Civil Registry Law have ensured security, with the maximum punishment for any parties convicted of abusing the data being 10 years imprisonment, a Rp 1 billion [US$73,893] fine and termination of cooperation agreement,” the Home Affairs Ministry’s director general of population and civil registration, Zudan Arif Fakrulloh, said. 


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House to revise Civil Administration Law in wake of court ruling
The Jakarta Post,08 November 2017

The House of Representatives has said it will revise the 2013 Civil Administration Law following a Constitutional Court (MK) ruling declaring a provision within the law as unconstitutional.“The MK ruling is final and binding. We have to comply with it,” Zainuddin Amali, chairman of House Commission II overseeing home affairs said on Wednesday as quoted by Antara. 

The court ruled that Article 61 and 64 of the law that required people adopting indigenous faiths to leave the religion column on their ID cards blank were discriminatory.
Justice Saldi Isra said the articles provided no legal certainty and violated principles of equal justice for all citizens.

Zainuddin said a meeting would be held after Nov. 15, the end of the House recess period, to discuss the planned revision.
Commission II lawmaker Ace Hasan Syadzily, meanwhile, called on all parties to respect the court’s ruling.

He said all Indonesians have equal rights to be protected when exercising their beliefs.“Allowing native-faith followers to state their faiths on ID cards is a form of state recognition and protection to any belief outside of the six official religions,” Ace said.

Millions of Indonesians subscribe to indigenous beliefs that the government says could not be considered as "religion". During the New Order era, they were forced to choose one of the six official religions, namely Islam, Protestantism, Catholicism, Buddhism, Hinduism and Confucianism, to obtain ID cards. 


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