Update News September 19, 2017

In The News

Govt to Offer Incentives to Eco Friendly Companies
TEMPO.CO 19 September 2017

TEMPO.CO, Jakarta - Nurmayanti, head of product standardization for the Environment and Forestry Ministry, said that her office is preparing a regulation that would offer incentives to eco friendly companies. “Pending the President’s approval,” she was quoted as saying by Metropole yesterday.

According to Nurmayanti, the regulation will take the form of a government regulation on economic instruments for environmental protection. The regulation is based on Law No. 32/2009 on environmental management. One of the incentives offered would be an easier access to bank loans. Eco-friendly products may also be used by government agencies.

A survey conducted by nonprofit World Wildlife Fund (WWF) Indonesia and Nielsen this year shows that 63 percent of Indonesians are willing to pay more for eco-friendly products. WWF Indonesia staffer Taufiq said that the results indicate that Indonesians are aware of the importance of using green products.

He, however, said that several factors are hampering the use of eco-friendly products. The survey shows that the major issue is that green products are perceived as expensive. The second issue is the lack of availability of the products in stores.

Earlier, Environment and Forestry Minister Siti Nurbaya said that the green business sector will be given incentives. The government is also promoting nine green industries: the forest energy industry, ecotourism, wildlife conservation, non-wood forest products, import substitution, waste management, microbe fermentation energy, geothermal and ecosystem restoration. The government offers easy permit application and extension as well as duty exemption.

Indonesia Chamber of Commerce and Industry (Kadin) deputy chairperson Shinta Widjaja Kamdani said that the government should also provide incentives to prospective green infrastructure investors.

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Rp2.6mn Tickets to Raja Ampat Available at Garuda Travel Fair
TEMPO.CO 19 September 2017

TEMPO.CO, Jakarta - Garuda Travel Fair (GITF) offers Rp2.6mn tickets for flights to Raja Ampat. The event will be held by flag carrier Garuda Indonesia on September 22-24 in 22 cities.

“We cooperate with [state-owned lender] bank BNI, the ticket prices being offered are more affordable,” Garuda Marketing and Information Technology Director Nina Sulistyowati told a press conference on September 18 in Jakarta.

Nina explained that the lowest ticket price to be offered is Rp800,000 for domestic flights from Jakarta to Surabaya and Rp500 for international flights from Jakarta to Kuala Lumpur. The highest ticket prices include for domestic flights between Jakarta and Raja Ampat at Rp2.6 million and international flights between Jakarta and Amsterdam at Rp7.6 million.

“They are round-trip tickets,” she said.

The GITF will simultaneously be held in 13 major Indonesian cities: Medan, Pekanbaru, Lampung, Jakarta, Bandung, Surabaya, Denpasar, Semarang, Solo, Yogyakarta, Malang, Lombok and Manado. As for Jakarta, the event will be held in Jakarta Convention Center (JCC).

“Particularly for Jakarta, the sales target is Rp283 billion and visitors target is 76,000,” he noted.

The first phase of GITF Jakarta in March saw 74,000 visitors with sales amounting to Rp279 billion.

Garuda Travel Fair 2017 phase 2 will also be held on September 15-17 in Batam, Palembang, Kupang, Balikpapan and Makassar and on September 29-October 1 in Ambon, Sorong, Jayapura and Timika.

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Thousands of Trees to be Sacrificed for Sidewalk Project
TEMPO.CO 19 September 2017

TEMPO.CO, Jakarta - Jakarta administration will sacrifice thousands of trees for sidewalk widening project along Jalan Jenderal Sudirman and Jalan M.H. Thamrin in Central Jakarta. “Apologize to all because there will be cutting down of trees in the near future,” Jakarta administration secretary Saefullah said yesterday at the City Hall.

Saefullah said that trees on the separator of slow and fast lanes will be cut down and relocated to new locations.

Earlier, 5000-ish trees were cut down for light rail transit (LRT) projects in East Jakarta and North Jakarta and mass rapid transit project on Jalan Sisingamangaraja and Jalan Jenderal Sudirman.

Meanwhile, the sidewalk widening project called ‘Trotoarku’ will commence in mid-October and is expected to be completed by June before Asian Games XVIII in August 2018.

Saefullah said that the sidewalks will be widened to 9-10 meters by removing barriers between buildings and roads.

Jakarta administration will disseminate the project to companies domiciled on Jalan Sudirman and Thamrin as well as side walkers, car and motorbike users.

At present, sidewalks subject to alterations due to MRT project have been narrowed in several locations, such as in front of Ratu Plaza, Education and Culture building, Chase Plaza building and behind the Indonesia Stock Exchange building that is now only 1-1.5-meter wide.

Jakarta administration reports that there are 9,350 trees along Jalan Sudirman and Thamrin comprising mahoganies, flamboyants, banyans and jati mas trees.

Governor Djarot Saiful Hidayat has instructed relocation of trees age 10-25 years to Taman BMW Park in Tanjung Priok, North Jakarta and KH Hasyim Asyari Grand Mosque in West Jakarta.

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63 Percent Consumers Willing to Pay Premium for Green Products
TEMPO.CO 18 September 2017

TEMPO.CO, Jakarta - A recent survey done by WWF Indonesia and Nielsen showed that 63 percent of Indonesians are willing to pay a premium for green products. The result was revealed by WWF Indonesia Staff Representative Taufiq in Central Jakarta on Monday, September 18.

He claims that the survey result suggests that the awareness of Indonesian people in using environmentally friendly products has improved significantly. However, there are still several elements preventing the society from using the green products.

The survey shows the common reason driving people away from using green products is the general misconception that green products are expensive. Such mindsets can have a negative effect since 73 percent of consumers consider price before deciding to purchase a product.

Taufiq views that there needs to be a massive socialization to change that mindset. “Television has become a source of information for 80 percent of consumers in choosing certain products,” he said today, Sept. 18.

The second cause is the 53 percent unavailability of environmentally friendly products in stores. Meanwhile, the factor influencing 61 percent of society’s decision to use green products is the sense of responsibility it springs by purchasing that product. 52 percent of consumers feel happy and glad for their contribution towards the environment.

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Jakarta MRT Project Pilot Starts June 2018
TEMPO.CO 19 September 2017

TEMPO.CO, Jakarta - Jakarta Governor Djarot Saiful Hidayat is confident that the Jakarta mass rapid transit (MRT) project construction can be completed by the end of 2017. The trial run for the train is expected to be implemented in July 2018.

"Currently we are concentrating on completing the first phase of construction,"  Djarot said in Jakarta, Monday, Sept. 18.

After the trial period is over, the city government hopes that the trains can operate fully in 2019.

The Jakarta Provincial Government and PT MRT Jakarta are also finalizing Phase II of the development plan, which runs from the Hotel Indonesia Roundabout to Kampung Bandan. The city administration has approved the proposed loan for phase II's development, which amounts to Rp22.5 trillion.

As of August 2017, the Jakarta MRT project construction progress has reached 78.01%,

The first phase includes the construction of flyover stations in seven areas including Lebak Bulus, Fatmawati, Cipete Raya, Haji Nawi, Blok A, Blok M, and Sisingamangaraja Stations.

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Morowali polytechnic commences training of first batch
The Jakarta Post 19 September 2017

The Morowali Metal Engineering Polytechnic has commenced training its first batch of students in a bid to improve the skills of locals living in Sulawesi where a nickel and stainless steel industrial park, the Indonesia Morowali Industrial Park (IMIP), is located.

PT IMIP, a Chinese and locally owned firm that operates the polytechnic, offers scholarships to 96 youth in Sulawesi to learn skills such as machinery maintenance, electrical engineering and installation and mineral chemicals -- in exchange for work contracts after graduation.

The students were selected from 679 Sulawesi teenagers who took part in an enrollment test in Morowali, Palu, Central Sulawesi, Kendari, Southeast Sulawesi and Makassar, South Sulawesi.

“We opened this polytechnic because we still depend on Chinese employees for some technical work. We can’t depend on them continuously. We need skilled locals to work with us,” said IMIP CEO Alexander Barus on the sidelines of the commencement ceremony on Monday.

The polytechnic has six classrooms, five laboratories, two workshops and one innovation center.

Industry Minister Airlangga Hartarto attended the event and emphasized the importance of more businesses contributing to improving the skills of locals by establishing polytechnics or helping local vocational schools or polytechnics upgrade their equipment. (bbn)

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Jakarta-Cikarang commuter line to begin operation in October
The Jakarta Post 18 September 2017

Commercial operations of a commuter line connecting Jakarta and the Cikarang industrial area in West Java have been postponed to October because the facilities at two stations along the route were not deemed ready, an official has said.

Joice Hutajulu, spokesperson for the Transportation Ministry's railway directorate general, said on Monday that based on an inspection carried out by a team from the ministry last week, Tambun and Cikarang stations needed to be developed to be ready for operations.

"The two stations were not yet 100 percent ready. We were concerned about the accessibility and safety of the two stations," Joice said as quoted by kompas.com.

Joice said that CCTV cameras, sound systems, safety rails and information boards needed to be installed prior to the operation of the line.

The ministry previously set a target to begin commercial operations of the commuter train on Sunday. (fac)

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Airport skytrain to be operated by crew for first six months
The Jakarta Post 18 September 2017

Soekarno-Hatta International Airport’s skytrain will be operated by crew for the first six months, after which it will operate unmanned.  

“People movers everywhere use drivers in the first six to eight months of operations. It is a standard operating procedure,” said state-owned airport operator PT Angkasa Putra II (AP II) president director Muhammad Awaluddin in Jakarta on Sunday as reported by kompas.com, during the launch of skytrain on Sunday.

As an initial step, the skytrain will connect Terminal 2 and Terminal 3 of the airport, with an additional connection in December to Terminal 1 when all three sets of skytrains will be operational.  

State-owned PT LEN Industri finished building the skytrains in 14 months, quicker than the planned 17 months.  

State-Owned Enterprises Minister Rini Soemarno said her side was closely monitoring LEN Industri and state-owned construction firm PT Wijaya Karya, which were tasked with manufacturing the rolling stocks and constructing infrastructure, respectively.

Awaluddin said his company invested Rp 950 billion (US$71.76 million) for the skytrain project -- Rp 530 billion for the manufacturing of rolling stocks by PT LEN in cooperation with Woojin of South Korea and Rp 420 billion for the construction of  infrastructure. (bbn)

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International Textile Manufacture Federation participants travel to Bali
The Jakarta Post 18 September 2017

Nusa Dua, Bali recently welcomed 250 participants of International Textile Manufacture Federation (ITMF) from 29 different countries.

“They were in Bali from September 14 -16, not a single participant issued a complaint, everybody was happy because they got to explore Tanah Lot, Ubud and Uluwatu after the meeting,” explained Indonesia textile association executive secretary boards of directors, E.G Ismy.

The group visited Tanah Lot on their first day in Bali. Tanah Lot was once visited by the vice president of India Muhammad Hamid Ansyar, Turkish and Korean celebrities and contestants of Miss World 2012 and 2013.

“Tanah Lot is very cool, the place’s arrangement emphasizes on the religious value mixed with the beautiful nature,” said ITMF president, Jaswinder Bedi.

Tanah Lot is one of the leading tourist destinations in Bali after Kuta Beach, as it has a breathtaking panoramic view especially during sunset.

Following the visit to Tanah Lot, the group then went Ubud where they saw rice terraces, local handicrafts, art galleries and visited the Sacred Monkey Forest Ubud.

“The Sacred Monkey Forest is really special, former Manchester United player Luis Nani once visited this place, so did Hollywood celebrities Paris Hilton and Julia Roberts. This is a wonderful experience for the ITMF delegates,” said tourism ministry's Archipelago Tourism Marketing Development deputy, Esthy Reko Astuti.

The last stop was Uluwatu where they witnessed the performance of Kecak traditional dance at Pura Uluwatu during sunset. (asw).

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Deloitte Highlights Indonesia's Competitive Advantage, but Points to Underinvestment
Jakarta Globe 18 September 2017

Jakarta. Indonesia, along with India and the Philippines, will rise as an economic powerhouse in the coming decades, while other Asian countries are starting to face demography-driven challenges, says a new report by global accounting firm Deloitte Touche Tohmatsu.

"Our analysis shows that aging will produce some very large winners at the industry level, particularly in Asia," Deloitte Australia economist Chris Richardson said in a statement on Monday (18/09).

The report titled "Demographics Under the Spotlight, by Country," which is one of three reports featured in Deloitte's third edition of Voice of Asia series, highlights challenges and business opportunities in Asia Pacific.

According to the report, Indonesia's working-age adult population will remain relatively stable in decades to come. Approximately two-thirds of Indonesia's current 260 million population are working-age adults, more than in other countries in the region, like Thailand or Singapore.

As working adults tend to have higher purchasing power, Indonesia offers opportunities for the tourism, entertainment, hospitality, manufacturing and education industries.

Rapid urbanization and political focus on infrastructure development offer opportunities in the construction, utilities and transport sector.

The report also said Indonesian manufacturers have a better competitive advantage against the Chinese. Deloitte noted that the current average daily cost of factory labor in Indonesia stands at about $9, compared with $28 in China.

The report said Indonesia should capitalize this trend to promote low-cost manufacturing to attract more investors.

Underinvestment and Inequality?

Despite the ample workforce, according to the report, Indonesia's cities are "underinvested," lacking access to clean water, sewer system and public transportation, which holds back economic growth.

The Indonesian government is targeting the economic growth of 5.2 percent this year and 5.4 percent next year. That compared with last year's 5.02 percent.

As the economy will continue to grow at a high rate, Indonesia may face further income and wealth inequality.

"Should assets and capital continue to be largely owned by a small elite class, the richest Indonesians are more likely to benefit disproportionately from the projected high rates of economic growth generated by the demographic dividend," the report said.

Still, better access to infrastructure and education may also offset the risk of inequality.

"Indonesia's relatively youthful workforce gives it a significant advantage in adapting to the technological changes that are likely to arise as digital infrastructure in Indonesia catches up with the rest of the world," the report said.

Indonesia, India and the Philippines have their share in the demographic dividend, with India set to become an economic superpower. India's potential workforce is going to increase from 885 million to 1.08 billion in the next 20 years.

"India will account for more than half of the increase in Asia's workforce in the coming decade," Deloitte India economist Anis Chakravarty said.

According to Chakravarty, India will have more advantages, because new workers will be "much better trained and educated" than the country's existing workforce, and more women will join the employment market.

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