Update News November 17, 2017

In The News

President expects education to be relevant to world development
ANTARA News 17 November 2017

Bogor, W Java (ANTARA News) - President Joko Widodo expected the development of education in Indonesia to be relevant to the developments of the world, especially in the field of digital technology.

"The development of human resources is really expected to be able to follow the global developments," he stated during the opening of a limited meeting, under the theme of Vocational Education and Its Implementation, at the Presidential Palace of Bogor, West Java province, on Thursday.

Widodo noted that the development of education can be focused on vocational education and training, as well as polytechnic.

He also suggested the need for a revision of the educational law so that universities from other countries could establish their branches in Indonesia, as foreign colleges would serve as a comparison both in terms of management and educational curriculum of a college.

He stressed the need for universities in Indonesia to establish faculties and majors that teach digital technology and economy.

"Meanwhile, the world has changed so fast, but there are no universities that dare to establish a faculty of digital economy, which is focused on online store; for example, with majors of retail management and logistics management," he explained.

At the limited meeting, Widodo presented two invited guests, namely the founder of PT Gojek Indonesia, Nadiem Makarim, and founder of a startup company of Ruangguru, Adamas Belva Syah.

The two guests shared their views on the world change and utilization of the digital technology system in daily life.

The meeting was also attended by Coordinating Minister for Economic Affairs, Darmin Nasution; Coordinating Minister for Political, Legal and Security Affairs, Minister of Education, Muhadjir Effendy; Minister of Research, Technology and Higher Technology, M Nasir; Minister of Labor, Hanif Dhakiri; Finance Minister, Sri Mulyani; and Minister of Religious Affairs, Lukman Hakim; among others.

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West Java, Morocco officially become sister provinces
ANTARA News 17 November 2017

Bandung, W.Java (ANTARA News) - West Java Province now officially shares a sister province relationship with the Souss Massa Region, Morocco, after West Java Governor Ahmad Heryawan and Souss Massa Region President Brahim Hafidi signed a memorandum of understanding (MoU).

The West Java governor, in a press release received by ANTARA here on Thursday, said the areas of cooperation proposed in the MoU, inked in Souss Massa on Wednesday (Nov 15) afternoon local time, include the development of the capacity of human resources, particularly in imparting education on fisheries through the sharing of knowledge on fishing, cultivation, production, processing, and marketing.

Another area is increasing trade and investment through business matching in order to create trade connections between the two regions and develop markets for potential West Java products and commodities in the Moroccan market.

"In the field of investment, we will open factories or other businesses for which the raw materials will be sourced from Souss Massa," he remarked.

The governor explained that other areas of focus are developing tourism through two-way promotion by involving travel agents from West Java and Souss Massa as well as boosting small businesses through sharing of knowledge to create compliance strategies to meet international export standards for products manufactured by small and medium enterprises.

"In the field of culture, we will organize collaborative cultural events of arts, sports, and youth between the two regions," the governor said. 

According to Heryawan, the initial stage of cooperation will involve a joint working meeting to formulate a work plan containing programs and activities in accordance with the scope of cooperation for the 2017-2022 period as well as drawing up an implementation plan to regulate the activities in detail.

The governor expressed hope that the cooperation between West Java and Souss Massa would be able to offer benefits to the people of both regions.

He lauded the complete support extended by Indonesian Ambassador Extraordinary and Plenipotentiary of the Republic of Morocco and Mauritania E. D. Syarief Syamsuri, who has successfully carried out a consultation and coordination mechanism, so that the relationship between West Java and Souss Massa will grow stronger under the sister province cooperation.

Earlier, on April 18, 2017, the Letter of Intent for the establishment of the sister province cooperation between the Souss Massa region and West Java Province was signed in Agadir City.

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Gov’t Signs Contract Amendments for 13 Coal Miners
Jakarta Globe 16 November 17

Jakarta. Energy and Mineral Resources Minister Ignatius Jonan signed contract amendments for 13 coal miners on Tuesday (14/11), leaving another 18 miners amid negotiations, as required by the 2009 Mining Law, a ministry statement said.

Bumi Resources, Kaltim Prim Coal (KPC), Berau Coal Energy, Kideco Jaya Agung and Arutmin Indonesia agreed to switch their contracts of work (CoWs) to coal contracts of work (PKP2Bs).

"There are 18 [contract amendments] again. I hope before the end of 2017, all will be finalized," Ignatius said.

The Indonesian government began negotiations to change the format of coal miner contracts with 68 operators in 2010. With the signing of the PKP2Bs for the 13 coal miners, the country has succeed in negotiating with 50 coal mine operators.

Those miners agreed to post mining guarantees. From the agreement of those contract amendments, "state income will rise $68 million," Jonan said.

Meanwhile, Bambang Gatoto Ariyono, director general of minerals and coal at the ministry, explained that the forecast of rising state income from the new contracts is based on calculations of state income from the first phase of the PKP2B contracts that will see $4 per hectare in generated taxes, up from a previous $1 per hectare. Miners will contribute 13.5 percent from their total coal production income to the state.

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PLN Signs Rp20tn Deal for Renewable Energy
TEMPO.CO 17 November 2017

TEMPO.CO, Jakarta - State power company (PLN) signed renewable energy sale and purchase agreements with nine independent power producers today, November 16. The agreements cover renewable energy projects with a total capacity of 640 MW and an investment value of Rp20.4 trillion.

Energy and Mineral Resources Minister Ignatius Jonan said this was the third time PLN signed agreements for new renewable energy projects this year. The first signing was on August 2 and the second was on September 8.

With the recently signed deals, the total capacity of renewable energy generation projects that has been contracted is 1,189.22 MW.

"This suggests that the new renewable energy investment climate is still attractive," says Jonan.

From the signed agreements, there will be nine power plant projects running on renewable energy. One is a hydropower, another one a geothermal power plant, and the remaining seven are mini-hydropower plants. The power plants are estimated to generate 640.65 MW.

"The plants are located in the Sumatra, Java, Sulawesi and Nusa Tenggara," Jonan said.

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Gov't to Release New Regulation to Calm Tax Amnesty Participants
Jakarta Globe 16 November 17

Jakarta. The Ministry of Finance will release a new regulation this week to make sure tax amnesty participants are exempted from income tax when transferring ownership of their houses or land as part of the ministry's efforts to maintain taxpayers' trust, Minister Sri Mulyani Indrawati said on Wednesday (15/11).

"We want to offer assurances to those who participate in the tax amnesty program," Sri Mulyani said in a press conference.

Sri Mulyani's comments come after a local news reported cases in which tax amnesty participants' requests for exemption certificates — which will free them from the obligation to pay income tax — are being rejected due to various reasons.

Indonesia's tax amnesty program encouraged taxpayers to come clean about previously unreported assets. In some cases, taxpayers own houses or land that are officially named after their relatives or colleagues.

In declaring their assets, taxpayers are required to transfer the ownership to their own name and the process will be exclude income tax if done no later than Dec. 31 this year.

The Finance Ministry issued a regulation last year that offered detailed guidelines for the tax amnesty program, coded 141/PMK.03/2016. The Ministry of Agrarian Affairs and Spatial Planning also had issued a regulation that ensures ownership transfers are free from income tax, coded 15/2017.

Still, tax offices across the archipelago have rejected about 20 percent of the 29,000 tax exemption applications so far. The tax office expects a total of 151,000 taxpayers to transfer their assets' ownership by the end of this year.

According to Sri Mulyani, the reasons of rejection are valid, owing either to a failure to provide necessary documents from the notary, or the data in the database did not match the actual asset, or the taxpayers did not go to the correct tax office where they are registered. The Finance Ministry and the Directorate General of Taxes will use this opportunity to evaluate their business process and to regain trust from taxpayers.

"For the last reason [of filing at an incorrect tax office], we will try to be more flexible," Sri Mulyani said, promising taxpayers that they will be able to take care of this issue at any tax office branch across the archipelago.

The new Finance Ministry regulation — which is scheduled to be released on Friday — will be a revision of the existing regulation coded 141/PMK.03/2016 and clauses will be added to reassure that tax amnesty participants are free from income tax when transferring their asset ownership. Upon the transfer process at the National Land Agency, showing a copy of the tax amnesty program participation will be enough.

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Batik Air Plans to Expand, Buy Seven Airbus
TEMPO.CO 17 November 2017

TEMPO.CO, Jakarta - Batik Air, a subsidiary of Lion Air Group, is planning to buy seven Airbus next year, President Director Ahmad Luthfi said.

The purchase will be made in a bid to expand Batik Air business. The airline currently has 51 aircraft, serving 38 domestic and international destinations with a frequency of 280 flights a day.

Luthfi added that before the end of the year the company will open three new flight routes, two domestic and one international.

The first route is Soekarno-Hatta Airport to Silangit Airport in North Sumatra on December 1. On December 15, Batik Air will make a maiden flight to Labuan Bajo, East Nusa Tenggara.

Batik Air has long been planning to open a new route to the tourist destinations, according to him. The airline will go ahead with the plan after the airports in the two regions have been upgraded for Airbus 320 landing.

“We plan to open the routes to support tourism. We also predict that the number of passengers, particularly tourists, will increase,” he noted.

As for the international route, Batik Air will fly to Kinabalu, Malaysia, on December 15 from Soekarno-Hatta Airport. The decision was made due to high demand and the number of Indonesian migrant workers in the city.

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President calls for preserving culture in new tourism destinations
ANTARA News 17 November 2017

Bogor, W Java (ANTARA News) - President Joko Widodo has called for preserving traditional culture, including traditional houses, during the development of the 10 new tourism destinations.

"Traditional buildings will not be removed and replaced with other architecture, such as the Spanish and the Mediterranean style. We have to pay attention to the customary buildings," he stated at a limited meeting regarding the Development of 10 New Bali at the Bogor Presidential Palace, West Java province, on Thursday.

He stated that the traditional houses that have artistic and historical value can be used for promoting tourist destinations; for example, Lake Toba in North Sumatra province.

Widodo directed the Ministry of Tourism to collaborate with the Creative Economy Agency to promote and maintain the customary buildings.

In addition to traditional houses, he stated that tree planting can be done to make the environment green in tourism destinations.

"I hope the greening in tourism destinations; for example, Lake Toba or Mandalika, will be implemented well to promote a good environment and to cover up the bare areas," he stated.

He added that the current world consumption trend is changing from shopping for goods and branded objects to culinary tourism.

"People are happy to travel, tour, as well as to try out new restaurants, coffee, and typical foods," he revealed.

Therefore, he revealed that the government and the people of Indonesia can benefit by developing new tourism destinations, in addition to the Island of the Gods, Bali. 

The Ministry of Tourism is offering 10 prioritized tourism destinations known as the "10 New Balis" to boost the national tourism industry.

Minister of Tourism Arief Yahya had earlier stated that the term "new Bali" is an idiomatic expression being used, with the expectation that the new destinations would attract as many tourists as those visiting Bali Island.

The 10 prioritized tourism destinations in 2016 include Lake Toba (North Sumatra), Belitung (Bangka Belitung), Tanjung Lesung (Banten), Seribu Islands ( Jakarta), Borobudur Temple (Central Java), Mount Bromo (East Java), Mandalika Lombok (West Nusa Tenggara), Komodo Island (East Nusa Tenggara), Wakatobi National Park (Southeast Sulawesi), and Morotai (North Maluku).

Meanwhile, Bali is one of Indonesia`s iconic tourism destinations, which attracts some 4 million tourists a year, or 40 percent of the total tourists visiting the country.

"Bali is a destination that already occupies a prestigious spot on the worlds tourism map," Yahya remarked.

However, the 10 prioritized destinations will not be developed to resemble Bali as each of them has distinct characteristics.

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Jokowi Adamant to Get 51 Percent Stake in Freeport
TEMPO.CO 17 November 2017

TEMPO.CO, Jakarta - The government continues to push US-based miner Freeport Indonesia to divest their shares. President Joko Widodo said the Indonesian government will pursue the 51 percent stake ownership.

"Ask for 51 percent, do not back down," Jokowi said while giving a speech at the Indonesian National Student Movement (GMNI) Congress in Manado, North Sulawesi, Wednesday, November 15.  

Jokowi said that even though the negotiation effort has been running for three years, the government should not give up the pursuit of majority ownership of Freeport shares.

The President said he had specifically assigned Finance Minister Sri Mulyani, Energy and Mineral Resources Minister Ignasius Jonan, and State-Owned Enterprises Minister Rini Soemarno to negotiate with Freeport.

Jokowi asserted that the government has no reason to be afraid and hesitate during the negotiation process runs. According to the president, if the government is doubtful and full of hesitation, Indonesia will forever be played by foreign companies.

"There's no need to be afraid and hesitate to ask for the 51 percent," he firmly stated.

In September, Freeport McMoran Inc. CEO Richard Adkerson delivered his objection to the miner's contract with the Indonesian government; including about the 51-percent divestment, contract extension, and due diligence.

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Bank Indonesia Keeps Benchmark Rate at 4.25 Percent
TEMPO.CO 17 November 2017

TEMPO.CO, Jakarta - Bank Indonesia (BI) has decided to keep BI 7-day Reverse Repo Rate unchanged at 4.24 percent, whereas the deposit facility rate and lending facility rate are also kept at 3.50 percent and 5.00 percent, effective from November 17.

“The decision is consistent with the efforts to maintain macroeconomic stability and financial system stability, as well as to boost economic growth while continue to keep an eye on the dynamics of both global and domestic economy,” Bank Indonesia Governor Agus Martowardojo told a press conference yesterday, Nov. 16.

Agus considered the current interest rates adequate to keep inflation target on track. Moreover, he claimed the current account deficit is healthy.

Meanwhile, domestic economy continues to grow with a more balanced economic structure. In addition, Agus explained, BI remains cautious of global risks in relation to the plan for stricter monetary policies in developed countries.

“As for domestic risks such as weak household consumption and bank intermediation, BI will continue to coordinate with the government,” he said.

The Bank Indonesia Governor explained that the coordination is aimed at enhancing policy mix in a bid to maintain macroeconomic stability, financial stability and push for structural reform to strengthen the fundamentals of the Indonesian economy.

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Governor Anies Baswedan to Raise Wage of Orange Team
TEMPO.CO 17 November 2017

TEMPO.CO, Jakarta - Jakarta Governor Anies Baswedan confirmed that there will not be any reduction for the number of freelancers handling infrastructure and public facilities (PPSU) popularly known as “Orange Team”.

Governor Anies Baswedan also said that he will extend the contract and increase the pay of the Orange Team.

“We will continue [to use their services], their pay will also increase. They will receive Rp3.87 million each month in 2018,” said Anies Baswedan on Wednesday, November 15.

His statement is also to deny rumors stating that Anies as the current Governor would non-activate the PPSU or Orange Team that was introduced by former Jakarta Governor Basuki Tjahaja Purnama or Ahok.

The PPSU teams are tasked to handle public infrastructures, such as fixing streets with potholes, fixing sidewalks, and also handling Jakarta’s notorious flooding.

Governor Anies Baswedan will summon every mayor and governance bureau in making sure that state apparatus are on standby and will not be late in responding to any type of situation.

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Italian Manufacturers Seek Cooperation With Indonesian Businesses in Printing, Packaging
Jakarta Globe 16 November 17

Jakarta. Italian manufacturers on Wednesday (15/11) expressed their interest to increase cooperation with their Indonesian counterparts, particularly in printing and packaging, during the 2017 Printech Indonesia event in Kemayoran, North Jakarta.

"[Indonesia is] a very interesting prospect market for Italian companies [...] We are willing to strengthen cooperation with Indonesian industries," Alessandro Liberatori, director of the Italian Trade Agency (ITA) in Jakarta, said.

The Italian Pavilion at the 2017 Printech Indonesia featured nine Italian companies in graphic, paper and converting machinery, including Cerutti Packaging Equipment and Uteco Converting.

Liberatori hopes that the event will facilitate interaction and create a foundation to foster cooperation between Indonesian and Italian businesses.

"In Indonesia there is no industry for graphic machinery. All our machinery for printing is imported from overseas," Ahmad Mughira Nurhani, chairman of the Indonesian Print and Media Association, said.

Speaking at the event, Italian Ambassador to Indonesia Vittorio Sandalli also emphasized that "Italy can offer longstanding expertise and high level of technology" in this sector.

According to business development director of the Indonesian Packaging Federation (IPF), Ariana Susanti, Indonesia’s packaging market size currently stands at $6.7 billion.

The federation is expecting an increase of 4 to 6 percent by the end of the year, and targets an increase to $9.6 billion in the next few years.
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