Update News November 20, 2017

In The News

Govt continues to provide economic justice in Papua
ANTARA News, 20 November 2017

Jakarta (ANTARA News) - Papua Province is one of Indonesia`s underdeveloped provinces in the eastern region which the government of President Joko Widodo (Jokowi) has given a priority in his current development programs. 

Compared with other provinces in the western part of the country, Papua suffers a sharp gap and inequality in its economic life. Due to the lack of infrastructure and land transportation facilities, prices of commodities are far higher than those in the rest of the country`s provinces. 

The price of cement, for instance, is about Rp800 thousand - Rp2.5 million per bag while in Java it is only about Rp70 thousand - Rp80 thousand per bag. Gasoline can reach Rp60 thousand per litter while in other regions the price of fuel oil is only approximately Rp6,500 per litter.

Hence, the government is now focusing its attention on the development in Papua in efforts to eliminate social economic injustices. One of the efforts to build economic justice is to lay the foundation of the economic activities by developing infrastructure.

Although there is criticism in the development of the Trans-Papua Road, President Jokowi is firm that the project will facilitate the economic activities and improve the welfare of the people in the country`s easternmost province. He asked the Regional Representative Council (DPD) to support his infrastructure development program in Papua.

"There is a question from a DPD member, asking the benefit of developing the Trans-Papua Road. Of course, Trans-Papua is constructed in an effort to make balanced infrastructure development in the country`s western, central and eastern regions. The DPD should instead support the efforts made to narrow infrastructure gaps in the country," President Jokowi said at a DPD National Workshop in the Parliament building in Jakarta on Friday (Nov 17).

The head of state compared infrastructure development with the story of eggs and chickens. "This is like the egg and chicken story, that questions which of them came first. Should the road be built first to facilitate the economy to grow or should we wait for the economy to grow first then we develop the road,?" the president asked.

He explained his reason for encouraging infrastructure development outside Java and avoiding Java-oriented development. "We start development from the border, from outermost islands because they are badly in need of the infrastructure. The Trans-Sumatra Toll Road is needed for the mobility of logistics and people. This will make us strong so that we will be able to compete with other countries," remarked Jokowi.

After all, according to the President, Indonesia`s Global Competitiveness Index is still far behind those of neighboring countries because Indonesia`s transportation and logistics costs are still 2.5 times that of other countries. This makes Indonesia unable to compete.

Therefore, these very basic things should be completed soon. "The Trans-Kalimantan and Tans-Papua are being built to make logistics transportation smooth and the price of basic needs lower. I am sad when I went to Wamena and Pegunungan Tengah in Papua. The price per bag of cement there was Rp800 thousand. In certain months when the weather is bad the price rose to Rp1.5 million per bag. In certain districts it rose to Rp2.5 million while the price of the commodity in Java was only about Rp70-80 thousand per bag. The price of gasoline outside Java could reach Rp60 thousand per liter while in Java it was only Rp6,500 per liter.

"So, I ordered the state-owned enterprises (SOE) minister to design prices so that the price of gasoline in Papua, particularly in Central Papua, will be the same as the price in Java. We need one and a half years to realize it. This is not an economic matter but a matter of social justice for all. Now, the cement price could be lowered to nearly half, yet it is not yet the same as that in Java," noted Jokowi. The target can be achieved when the Trans-Papua is already completed where cement can already be transported by land, no longer by air, thereby the cement price will be the same as that in Java.

In order to assure the implementation of development program based on social justice in Papua, SOE Minister Rini M Soemarno flew to Papua on Sunday (Nov 19) to observe economic equality development programs in Papua .

She will review the result of efforts to curb basic commodity prices for residents living in the frontier, outermost and remote regions in the easternmost province.

Based on her schedule, received by Antara from the Government of Jayawijaya District, Papua, Sunday afternoon, Minister Rini will visit three districts of Puncak Jaya, Jayawijaya and Pegunungan Bintang.

"On November 20, the SOE minister will have a dialogue with two groups of farmers and post-harvest coffee participants from the Yagara District and Wolo District. She will also review the cement price lowering program and at the same time has a dialogue with the community," said Head of Public Relations Affairs of the Jayawijaya Regional Government, Meitty W Nahuway on Sunday. 

Rini is scheduled to review the coffee garden and hand over an Arabica coffee peeler and dryer for coffee farmers in Jayawijaya District. Before heading to Jayawijaya on the first day, Meitty said, the minister is scheduled to visit Oksibil, the capital of Pegunungan Bintang District to inspect the premium and diesel oil distributors (APMS) to assure the implementation of the single-fuel price program.

Rini, together with the Puncak Jaya community, is also slated to declare the pride-to-consume-Papua-coffee slogan "banggamenyedkopkopipapua". On the occasion, she will hand over assistance to the local people, review the price cuts of basic goods by the Inflation Control Agency (PPI) and check the equalization of cement price by PT Semen Indonesia.

Before returning to Jayapura on Tuesday 21, the minister will review the implementation of the branchless-banking system by Bank Mandiri in Puncak Jaya District at around 11:30 local time.

Last August, the minister during her working visit to Jayawijaya invited local farmers to increase the number of Arabica coffee production to improve their income.

During the discussion with coffee farmers at the time, Rini found that the obstacle the coffee farmers were facing was marketing problem.

"One of the problems is that the cost of transport to the city is expensive, so we are looking for ways to make Jayawijaya community better," she said.

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Tourism Ministry promotes Sail Sabang 2017 and Aceh tourism in Bali
The Jakarta Post 20 November 2017

With Sail Sabang 2017 only days away, the Tourism Ministry recently held a promotional event for Aceh in Bali called 'Pesona Indonesia Aceh Night' in Bali. The event was held at Lippo Mall Kuta Bali on Nov. 18.

“40 percent of overseas tourists come to Bali, so it’s the perfect place to do a promotional event. As you can see, all of the tourists seem enthusiastic about this event,” said the Ministry's archipelago marketing communication development deputy assistant, Putu Ngurah.

Read also: On the beach in Sabang

Putu said that other than Bali, the promotion for Sail Sabang was also held overseas.

“This is a huge international event, President Joko Widodo is scheduled to attend. We’ve been promoting Sail Sabang for five months through different platforms such as TV, online publication and social media. We even promoted it at World Travel Market in London,” Putu added.

Aceh tourism department head Reza Fahlevi said that through the promotional event in Bali, they wanted to provide as much information about Sail Sabang.

“We are showcasing different activities related to Sail Sabang 2017 and other tourism information about Aceh,” Reza said.

At the event, visitors could try on several Acehnese dishes for free and saw performances of Saman Dance, Pukat Dance, Rapai Geleng, poem recitation, music and others. (asw)

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Ecopark vital conservation area for Bogor residents
The Jakarta Post, 20November  2017

The Ecology Park (Ecopark) in Cibinong, Bogor regency, West Java, plays a key ecological function as the conservation area is home to a collection of thousands of rare plants from the seven biggest islands in Indonesia.

Located at the Cibinong Science Center, the park, which features an artificial lake, serves as the main source of oxygen and water for people living in Cibinong and its surrounding areas.

Sugiarti, a staff member of Bogor Botanical Gardens’ Plant Conservation Center public relations division, said the Ecopark was initiated following a need to accommodate some of the plant collections at the Gardens.

Built on a 87 hectare plot of land, Bogor Botanical Gardens can no longer be expanded, while exploration activities continue to run, she said. That is why the Ecopark was developed in 2002 on a 34 ha plot of land.  

“We chose land around the Cibinong Science Center because it’s not far from Bogor Botanical Gardens,” said Sugiarti.

As part of Bogor Botanical Gardens, the Ecopark has a strategic function, including conservation, research, education, environmental services and ecotourism.

The Bogor Botanical Gardens’ Plant Collection Management division head Mujahidin SP said as an indigenous plant conservation area, the Ecopark had its collection arranged based on the bioregions of the country, namely Jawa-Bali, Nusa Tenggara, Kalimantan, Sulawesi, Maluku and Papua.

As of 2017, the number of Ecopark plant collections had reached more than 10,000, comprising 500 species. (ebf)

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Minister optimistic Jakarta-Surabaya toll road on stream in 2018
ANTARA News, 19 November 2017

Lebak, Banten (ANTARA News) - Transportation Minister Budi Karya Sumadi said he is optimistic the Jakarta-Surabaya toll road would be operational to facilitate transport of Muslims celebrating Ied ul Fitr in 2018. 

Every year during Ied ul Fitr, millions of Muslims leave Jakarta to celebrate Ied ul Fitr with relatives in the regions. 

"We appreciate the hard work by Public Works Minister Basuki Hadimuljono in carrying out the construction of the Jakarta-Surabaya toll road," Budi said when officiating the Citra Maja Raya housing complex in the Lebak District on Saturday. 

Completion of the Jakarta-Surabaya toll road had been delayed with many projects left idle by irresponsible developers, he said, adding, therefore, President Joko Widodo (Jokowi) asked the Public Works Minister to take over to finish the project. 

The Public Works Minister received the order with risk of being fired if failing to finish construction of part of the Trans Java toll road project in a year.

The promise of the Public Works Minister to finish the job of building the Jakarta-Surabaya toll road in a year deserves appreciation, Budi said.

It is predicted the Jakarta-Surabaya toll road could be operational to ease traffic, which would be busy ahead and during Ied-ul Fitr. Construction of the remaining part of the Trans Java toll road from Surabaya to Banyuangi would follow in 2019.

"Operation of the Jakarta-Surabaya toll road would greatly contribute to development of the people`s economy," Budi said. 

The Transport Minister said the reputation of the Public Works Minister has been shown in the operation of part of the Bekasi-Cawang-Kampung Melayu (Becakayu) flyover toll road inaugurated by President Jokowi recently. 

The Becakayu projects has also been left unfinished and idle for more than ten years, but the Public Works Ministry could finish the job in a year.

Therefore, Budi said he hoped that the Serpong-Maja and Balaraja-Maja toll roads could be put into operation next year. 

"We encouraged development of Citra Maja Raya in Maja into an integrated city in railway and toll road transport," he said. 

He also appreciates private companies taking part in the development of infrastructure as the government could not alone finance the projects. 

Meanwhile, Public Works Minister Basuki Hadimuljono said the integrated city was developed on agreement between the central government, the Banten provincial administration, the Lebak district administration and the private sector. 

Maja in Lebak, is a new city developed together with 10 other cities in Indonesia. 

This city could become a self supporting city in the future and would encourage 1.2 million of people from Jakarta to move to the city. 

The city, located west of Jakarta, is also expected to curb urbanization to capital city.

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Financial authority to scrap double taxes for private equity funds
The Jakarta Post, 20 November 2017

The Financial Service Authority (OJK) has proposed to the Finance Ministry to eliminate double taxes on private equity funds (RDPT) that invest through special-purposed vehicles (SPV).

OJK commissioner for capital market supervision Hoesen explained the funds collected from various investors were accumulated in the RDPT, while the fund manager would create SPV.

The SPV can acquire assets such as property and infrastructure, or a certain percentage of a companies equity, he said, adding that acquired productive assets would generate revenue from their activities such as leasing office space or toll road payments.

The acquired firms would distribute the dividend to the SPV, and the SPV would further distribute dividends to RDPT holders.

Under the current system, tax was collected in each dividend distributed and therefore, RDPT holders have to pay taxes twice because there are two dividends that are distributed.

"We propose to eliminate the first dividend tax," Hoesen said over the weekend, adding that the proposal needed approval from the Finance Ministry.

"Hopefully we can eliminate double taxation in the first quarter of next year." (bbn)

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Bali`s hotels ready to accommodate delegates to IMF-World Bank meeting
ANTARA News, 20 November 2017

Denpasar (ANTARA News) - The Indonesian Hotels and Restaurant Association (PHRI) of Bali said a number of hotels in the tourist island already received orders for room reservation a year ahead of the annual meeting of the International Monetary Fund (IMF) and the World Bank.

"We predict the hotels in Nusa Dua and Jimbaran would be fully booked," Bali`s PHRI chairman Cokorda Oka Artha Ardana Sukawati said here on Saturday. 

Nusa Dua and Jimbaran beach areas are the locations of big and luxurious hotels in Bali. 

Oka said a number of hotels in the prestigious areas are ready to accommodate thousands of delegates to the IMF-World Bank meeting to be held in October next year.

"They have been used to receiving large number of guests as Bali often hosts big international events," he said. 

He estimated that around 15,000 delegates would attend the annual meeting to be accommodated at hotels in Nusa Dua, Jimbaran, Kuta, Legian and other places in Bali. 

As for security, he said, PHRI already adopted with police standard system of hotel security even long before Bali was selected to be host of the meeting. 

"We cooperate with the police department in managing hotel security," he said. 

The government has also made preparations for the big event such as expansion of the Ngurah Rai airport of Bali and development of supporting infrastructure. Economists from around 189 countries are expected to attend the meeting.

Bali police chief Insp.Gen. Petrus Reinhard Golose said in January, 2018, a security team of IMF and the World Bank would visit Bali to inspect preparation taken against security such as threat of terrorism .

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Financial Inclusion Rate to Reach 75 Percent by 2019
TEMPO.CO 20 November 2017

TEMPO.CO, Jakarta - The government is aiming for 75 percent financial inclusion rate by 2019. To achieve the target, the government needs to include 51.8 million more adults.

The Coordinating Minister for Economic Affairs Darmin Nasution is confident of meeting the target. He said that the government has prepared five strategies listed in the National Strategies for Financial Inclusion (SNKI).

One of the strategies is financial education. The government will also ensure that people’s proprietary rights be met through the land certification program. Another strategy is to facilitate financial intermediation and distribution channel and consumer protection.

The head of the National Team for the Acceleration of Poverty Reduction (TNP2K), Bambang Widianto, said that one of the biggest challenges to reduce poverty is higher food prices, particularly rice. Bambang said that poor families spend 60 percent of their income on foods. “Around 25 percent of which is for rice,” he said.

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Government Seeks to Increase Fisheries Exports
TEMPO.CO 19 November 2017

TEMPO.CO, Jakarta - The government is trying to decrease the import duty abroad, improve transportation system at home, and expand fishing vessels to increase domestic fish production, in an effort to boost fishery product exports.

The transportation system in outermost regions will be improved to shorten the delivery time to export hub regions or point of exports, in order to maintain the freshness of fishery products.

The Ministry of Maritime Affairs and Fisheries (KKP) is fighting for import tariff cuts for the country`s fishery products imported by the European Union (EU).

Director General of the Maritime and Fishery Products Competitiveness Promotion of the KKP, Nilanto Perbowo, stated in a release on Saturday that the import tariff of Indonesian fishery products in the EU was still quite high, at around 6-24 percent.

However, a number of other countries, such as Timor Leste, Papua New Guinea, and Vietnam, are believed to have secured much lower import duty rates. Some are not subject to import duty tariffs. "It is now time for Indonesia to also get the same tariff of zero (0) percent; this is what we are striving for," she explained.

She noted that both the national and global industries are now acknowledging the government`s programs that aim to create sustainable fisheries, among others, by selling quality fishery products with safe labels.

In other words, the fish being sold are not those caught using methods that are illegal and safe for consumption.

The Minister of Maritime Affairs and Fisheries Susi Pudjiastuti had earlier requested the launch of direct flights in the outermost islands in order to promote the region as the nearest hub to export fresh fish.

In a presentation on three years of President Joko Widodo`s (Jokowi`s) administration, Susi remarked that fresh fish is an expensive product to be exported. But it is forced to be sold in a frozen state since it is not supported by access to transportation.

"I ask the Coordinating Minister to ask the Minister of Transportation to launch air routes in the outermost regions in the north and in the south, especially in East Indonesia, to the hub (points from where fish is exported). An increase of fresh fish exports from Maluku needs direct flights," Pudjiastuti explained in Jakarta on Wednesday (Oct 10).

She noted that so far, Indonesia was forced to export fresh tuna, which actually has a high value, in the form of frozen goods. It has to be frozen because it takes 48 hours by ship.

The minister explained that the high-value fresh tuna must be exported in a frozen state as the duration to ship these products takes a long time.

In addition, fish from the outer islands, such as Morotai and Maluku, cannot be directly sold to Davao City, Philippines, or Palau because they have to be sent first to Bitung and Makassar as hub locations.

In fact, the distance from Morotai to the Philippines and Palau is only about an hour if it uses an airplane. The longer the duration to ship the fish, the lesser the quality, as well as its selling price.

In support of its efforts to increase fisheries exports, the government also tries to increase fish production by providing fishing vessel assistance to fishermen. This year, the government has set a target to provide 782 fishing vessels.

The Ministry of Marine Affairs and Fisheries (KKP) confirmed that the ship assistance program would be completed by the third week of December 2017 or by the end of the year.

"In the current stage, some 151 units of vessels have been completed. I hope by the end of this month, the number will increase to 373 units, so that the total number of vessels already completed by the end of November will reach 524 units, while the remaining 258 is expected to be completed in December," Director General of Catch Fisheries Sjarief Widjaja remarked in a press release received in Jakarta on Thursday (Nov 16).

He expressed optimism that the vessel construction in 2017 will be completed before the end of the year, so that the KKP will also be able to immediately hand over the ships to the assistance recipients through 235 cooperatives in 29 provinces or 122 districts/cities.

In this year`s vessel project, the KKP will also transfer the ship assistance to the recipients, along with the licensing documents and fishing tools, in order for the vessel to be operational immediately.

Procurement of fishing vessels in 2017 requires the fishermen to be involved in supervising the development process. They are also asked to join trial test of the vessels and witness the building process at shipyards, so that the ships could be built according to their needs.

The procurement of ships in 2017 is not only carried out through e-catalog but also through the invitation of a number of shipyards, through a public auction system for ships to be built and to be adjusted, according to the demand of fishermen.

It is reported that till date, as many as two large shipyards are capable of completing 74 units of vessels, from a total of 214 units of ships.

The procurement budget of fishing vessels in 2017, totaling 782 ships, has reached Rp390 billion. The number of vessels under 5 gross tonnage (GT) is 243 units, under 5 GT boats is 384 units, under 10 GT boats is 134 units, under20 GT boats is 15 units, and under 30 GT is 6 units.

Meanwhile, all of the assistance ships on the 2016 procurement project have been distributed. Yet, the licensing documents of 100 units of them are still in the process and are expected to be completed by the end of November.

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OJK Proposes Tax Relaxation for Infrastructure Products
TEMPO.CO 18 November 2017

TEMPO.CO, Jakarta - The Financial Services Authority (OJK) has proposed to relax taxes on several investment instruments in the stock market in order to support infrastructure development and attract investors.

"By means of tax relaxation on stock market instruments, infrastructure assets can further develop rapidly, competitively, and it can attract both foreign and domestic investors," OJK commissioner for capital market supervision Hoesen said in Jakarta on Friday, Nov. 17.

He explained that stock market products subjected to tax relaxation include corporation obligations, private equity funds (RDPT), real estate investment funds (DIRE), asset-backed securities (EBA), and infrastructure investment funds (Dinfra).

For corporation obligations, he suggested lowering the tax rate the same as government debt paper (SBN) to 15 percent from 20 percent.

In addition, he continued, for RDPT investing in debt security through special purpose company (SPC), the dividend from SPC should be exempted from taxes since SPC is part of RDPT.

Meanwhile, for DIRE, he added, the OJK suggested lowering the tariff of property transfer fee (BPHTB). For EBA, taxes should be equal to similar products.

Regarding Dinfra, Hoesen claimed that tax incentive should be equal to DIRE collective investment contract (KIK). In this case, Dinfra invests on debt paper, so that the taxation practice is the same as equity funds.

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