Update News September 29, 2017

In The News

Bank Muamalat Set to Expand after Rights Issue
TEMPO.CO 29 September 2017

TEMPO.CO, Jakarta - Islamic lender Bank Muamalat Indonesia is set to expand after a rights issue that saw PT Minna Padi Investama Sekuritas Tbk acquired 51 percent of its stake. Muamalat CEO Purnomo B. Soetadi said that the latest capital injection will be used for business expansion of the first Islamic bank in the country.

Purnomo told Antara news agency that shareholders have approved to issue 80 million rights shares. “Minna Padi, either severally or jointly with other investors, will become the standby buyer(s),” he said.

Minna Padi will improve Muamalat performance both in the short-term and the long-term, he said. However, the rights issue transaction is still being processed so that capital injection has yet to affect the bank’s operations and businesses.

“The share subscriptions will only come into effect after the Financial Service Authority’s approval.”

Through the Indonesia Stock Exchange information disclosure on Wednesday, Minna Padi management announced the acquisition of 51 percent stake of Bank Muamalat with a potential value of Rp4.5 trillion.

“Minna Padi plans to become a shareholder by becoming a standby buyer in the rights issue,” president director Djoko Joelijanto said. The transaction value is equal to at least 57 percent of Bank Muamalat’s issued and paid-up capital.

Last year, Bank Muamalat also received an injection of tier 1 capital from shareholders. Then-Muamalat CEO Endy Abdurrahman said that the company would be focusing on developing retail and consumer banking that includes a greater portion of people’s housing credit (KPR) distribution. Bank Muamalat had also planned to improve Hajj and Umrah saving accounts.

Back to top

Three state-owned enterprises to issue global IDR bonds
ANTARA News 29 September 2017

Jakarta (ANTARA News) - The Minister of State-Owned Enterprises, Rini Soemarno, said that three state-owned companies will issue Global IDR Bonds, or the so-called Komodo Bonds.

"We are preparing three bonds, namely Jasa Marga, Wijaya Karya, and PLN," Soemarno stated here on Thursday.

She added that the SOEs issuing the bonds this year are Jasa Marga and Wijaya Karya (engaged in infrastructure), while PLN (the state-owned electricity company) is likely to issue the bonds in the first quarter of 2018.

"Komodo bonds must have an international rating, so that the preparations take time. It is expected that Jasa Margas bonds will be offered in the first week of November 2017," she noted.

The minister explained that Komodo Bonds was a foreign debt in rupiah, which has never been done before by Indonesia.

"Many foreign investors are willing to buy rupiah bonds, but they do not want to make transactions in Indonesia but abroad. This is what we are trying to do," she remarked.

The issuance of similar global bond has also been done by India and China.

Indias bonds is named Masala Bonds, with Rupee, and Chinas is Dim Sum bonds, with Renminbi currency.

"Most bonds are about infrastructure. Therefore, we must try it out," Soemarno pointed out.(*)

Back to top

Legislator supports plan to cancel hundreds of mining licenses
ANTARA News 29 September 2017

Banjarmasin, S Kalimantan (ANTARA News) - A regional legislator said he appreciated and supported plan to cancel hundreds of mining licenses of companies failing to comply with the regulation in South Kalimantan.

"It is natural to cancel the license of a company if it failed to comply with the regulation," chairman of the faction of the Prosperous Justice Party (PKS) at the regional legislative assembly (DPRD) H Riswandi said. 

The secretary of the Commission III of the DPRD said all mining companies are expected to comply with the regulation including on preservation of the environment.

"The regulations also concern the management of the environment such as reclamation not only to exploit the resources," he said. 

A company is expected to contribute to the welfare of the people in general , he added. 

"Therefore, the operating license of an irresponsible company should be revoked irrespective who is the owner of the company," he said. 

Earlier acting head of the regional energy and mineral resources (ESDM)service Hanif Faisal Nurafiq said his office is studying recommendations calling for the revocation of the operating licenses of 336 mining companies in the province. 

"We are processing calls for the revocation of 336 business licenses of mining companies to be submitted to the regional Capital Investment Agency," Hanif told reporters here. 

In addition the South Kalimantan ESDM office imposes sanction on mining companies failing to pay reclamation fund and taxes, Hanif said.

Nine districts in the province have mineral resources mainly coal . The districts having coal reserves in South Kalimantan include Kotabaru, Tanah Bumbu (Tanbu), Tanah Laut (Tala), Banjar, Tapin, HSS, HST, Balangan and Tabalong.

The coal deposits at the HST district, however, has remained untapped until now. 

Other district areas including the city of Banjarmasin, and regencies of Banjarbaru, Hulu Sungai Utara (HSU) and Barito Kuala (Batola) have no known mineral resources.

Back to top

Soekarno-Hatta Airport to Apply E-Money Payment for Parking
TEMPO.CO 29 September 2017

TEMPO.CO, Jakarta - Soekarno-Hatta International Airport operator will apply non-cash payment or e-money for parking at the airport.

“The new system is expected to be operational at the airport,” Angkasa Pura Solusi president director Maulidin Wahid Honre told Tempo today, Sept. 28.

Maulidin revealed that his company is currently preparing the equipment and system at the airport. “Readers have been installed at Terminal 1 and Terminal 2. We’re currently in the process of integrating the readers and the parking system,” he explained.

He added that the non-cash payment system has been applied at Terminal 3. According to Maulidin, the e-money payment system for parking would be beneficial for the public.

“[The system] can reduce queues, and airport operators can gain benefits from the cashless system, such as effective collection,” he said.

The number of cars and motorcycles parked at Soekarno-Hatta Airport can reach 50,000 on a daily basis.

Back to top

Govt urged to regulate app-based public transportation
The Jakarta Post 29 September 2017

Drivers of conventional public transportation joining forces with the Makassar chapter of the Indonesia Transportation Mode Society Alliance (AMMTI) have called on the South Sulawesi administration to immediately issue a bylaw on the regulation of online-based taxis and ojek (motorcycle taxis) operating in the province.

Before the bylaw is issued, all ride-hailing apps must stop their operations, they said during a rally in front of the South Sulawesi Legislative Council (DPRD) in Makassar on Thursday.

The protesters also demanded that Transportation Regulation (Permenhub) No.32/2016 that limits the operation of online-based taxis could be re-enacted. The Supreme Court revoked Permenhub in August.

“We, the administrators of pete-pete [city public transportation], conventional taxis and motor-powered tricycles, locally known as becak motor [bentor], only want justice and equality. Passengers of conventional modes of transportation have now been taken over by online-based taxis and ojek,” said rally coordinator Ahmad Ando.

Drivers of Makassar conventional modes of public transportation have repeatedly rallied to protest the issuance of operational permits for app-based taxis. They said online taxis were free to operate in Makassar. The number of online taxis have continued to increase, causing a drastic decline in the number of passengers using conventional transportation.

“Before online taxis operated, bentor drivers could get a net income of around Rp 100,000 [US$7.39] per day. Now, they earn only a gross revenue of Rp 50,000, or even Rp 20,000 net. It’s not enough to cover basic needs of my wife and our six children,” said Guntur, 59, a bentor driver. (ebf)

Back to top

Ministers Disagree over Power Projects
TEMPO.CO 29 September 2017

TEMPO.CO, Jakarta - State-Owned Enterprise (SOE) Minister Rini Soemarno and Finance Minister Sri Mulyani disagree over the 35,000 MW power project. Rini said that he will not adjust investment of state-owned electricity firm PLN in the project, citing the company’s financial prowess to build power plants and complete transmission and distribution grids.

“The Finance Minister is more concerned, I think it’s normal. But we know what we’re doing,” Rini said yesterday, Sept. 28, at an infrastructure investment forum in Jakarta.

Earlier, Finance Minister Sri Mulyani said that the PLN needed to revise the project due to deteriorating financial performance. The statement was made in a leaked letter addressed to Ministers of Energy and SOE.

Rini said that PLN has strengthened its financial foundation by conducting asset revaluation. The government has also invested Rp28.56 trillion in the project. In addition, PLN has increased power generation capacity around 10,000 MW. The remaining capacity will be developed by private power producers.

The PLN needs Rp585 trillion investments to complete the project, whereas it currently has Rp39.3 trillion. Rini has urged the company to step up efforts to secure loans to complete the project on schedule.

Conversely, Finance Minister said that the PLN finance continues to worsen due to its debt obligations. The expense could not be covered by growth in operating cash flow.

A study conducted by the Finance Ministry also shows that the PLN debt obligation will continue to rise in the next couple of years based on the profile of its debt maturity dates. On the other hand, the company fails to meet the target of power sales growth. “Not to mention the government’s policy to scrap plans to increase electricity rate that could increase PLN default risk,” Sri said.

Energy Ministry Ignasius Jonan said that PLN remains in a healthy financial condition to proceed with the power project. He claimed to have asked for President Joko Widodo’s advice over the issue. “The President said: ‘If the PLN had cash flow problem, the project may be handed over to private firms. 5,000 MW may be given to the private sector,” Jonan said.

PLN CEO Sofyan Basir is confident that the project is on schedule. “PLN has an excellent rating. It’s guaranteed by the government as well. What are you afraid of?”

Back to top

Minister Jonan: Gas Lifting Can Exceed Target
TEMPO.CO 28 September 2017

TEMPO.CO, Jakarta - Energy and Mineral Resources Minister Ignasius Jonan expressed his confidence that the gas lifting achievement will exceed the target by 10-15 percent.

“The target is 1.1 million BOEPD. (By the end of this year), [the gas lifting] may reach 1.2 million BOEPD,” Jonan said at his office today, Sept. 28.

By August 2017, the gas lifting was recorded at 1.134 million BOEPD. However, the oil lifting declined to 792,000 BOPD in the same month.

“The [oil] lifting declined. The target is 815,000 BOPD, but the current average lifting is below 800,000. By the end of this year, the oil lifting may be below 815,000 BOPD,” Jonan explained.

In 2016, the oil and gas sector contributed a total revenue of Rp83.83 trillion. By September 2017, the figure stood at Rp92.43 trillion.

According to Jonan, the condition was caused by the declining oil prices. In 2014, the oil price could go as high as US$100 per barrel.

“Now the price is extremely low. Last year, the price went down to US$38 per barrel,” he said. 

Jonan added that the oil and gas productivity could not be necessarily under control.

Back to top

Jakarta’s credit insurance signs MoU with Kadin
The Jakarta Post 29 September 2017

City-owned credit insurance PT Penjamin Kredit Daerah Jakarta (Jamkrida), for micro, small and medium enterprises (MSMEs) and cooperatives, has signed a memorandum of understanding (MoU) with the Jakarta chapter of the Indonesian Chamber of Commerce (Kadin Jakarta).

The MoU aims to help the development of micro, small and medium enterprises (SMEs) under Kadin’s supervision.

"This is to bring Kadin closer to Jamkrida, and to disseminate information on the existence and function of Jamkrida [to MSMEs]," Jamkrida president director Chusnul Ma'arif said after the signing of the MoU at the Kadin Jakarta headquarters in Central Jakarta, according to beritajakarta.id on Wednesday.

He added that Jamkrida provided loan guarantees to a number of SMEs amounting to Rp 1.5 trillion (US$110.5 million) last year.

Jakarta Kadin chairman Eddy Kuntadi said his organization would start disseminating information about Jamkrida’s programs to Kadin members.

"[With the agreement], members will be informed about Jamkrida’s products," he said. (dis/bbn)

Back to top

Banda Islands a hidden treasure in Indonesia
The Jakarta Post 29 September 2017

Bandanese people living in the capital city flocked to the National Gallery of Indonesia in Central Jakarta on Wednesday evening for the opening of Banda, Warisan untuk Indonesia: Pala and Perjanjian Breda 1667-2017 (Banda, Heritage of Indonesia: Nutmeg and the Treaty of Breda 1667-2017), an exhibition that runs until Oct. 4. 

Among them was Ramli Sondakh, 64. Bringing his nephew, he was excited to talk about the background story of a photograph showing Bandanese people from Maluku clad in the Cakalele war dance costume.

“They have five types of war dances. During the era of Dutch colonialization, they had no fear. But, they were afraid of only one thing: pig’s blood. If there was a pig present, they would run away,” he said, pointing to the black-and-white photograph.

The exhibition commemorates the 350th anniversary of the Treaty of Breda, signed on July 31, 1667, which ended the second Anglo Dutch war (1665-1667).

Opened by the Culture and Education Ministry’s director-general of culture, Hilmar Farid, the exhibition showcass at least 57 items, ranging from maps, photographs, books, paintings and installations.  

“We want to look at the history of what happened 350 years ago to see into the future. In the past, people came to Banda due to the stories of nutmeg. The function of nutmeg has changed in world trade, but Banda still has extraordinary stories,” Hilmar said.

Before the Treaty of Breda, the Dutch East Indies Company (VOC) and the British East India Company (EIC) competed to control nutmeg production in the Banda Islands, which consists of 11 islands, including the tiny islands Ai and Run. 

The VOC, who entered the Banda Islands after the Dutch conquered Ambon in 1605, wanted a worldwide monopoly of nutmeg — which at the time was the world’s most valuable commodity after gold — by forcing the Bandanese people to sell the commodity to them exclusively.  

However, they did not comply and continued to sell the commodity to the English, who had fortified trading posts on Ai and Run islands. For the Dutch, the English — who paid higher price for the nutmeg — were a threat to their monopoly. Their rivalry escalated, leading to the Amboyna Massacre, which was the killing of EIC workers in Ambon.

In 1621, Governor-General Jan Pieterszoon Coen sailed to Banda with 2,000 well-armed soldiers, killing thousands of people in the villages that resisted the VOC.  

Almost 2,000 people from the Banda Islands were brought to Batavia, now Jakarta, as captives, but hundreds of them managed to escape later on. Only around 1,000 people (less than 6 percent of the initial population) remained on the islands.  

The Treaty of Breda, ended the rivalry between the VOC and EIC. The English gave up their claims on Run and Suriname to the Dutch. In return, the English were given New Amsterdam, now New York, from the Dutch.

Under Dutch rule, the Banda Islands were also used as a place of exile for leading Indonesian figures, ranging from Tjipto Mangoenkoesoemo, Iwa Koesoemasoemantri, Sutan Sjahrir and Mohammad Hatta, who later became the country’s first vice president.

In the exhibition, two letters written by Hatta in 1937 to ask for a number of books during his years in exile are on display.

There is a photograph of Sjahrir, who stood in front of his car with his wife, Poppy Sjahrir, and his adopted children from Banda in 1946 in Jakarta. This picture showed the deep relationship between him and the Bandanese people before and after he became vice president.

Other photographs showcase the raw beauty of the Banda Islands, including the photo series “I Love Banda” by Isabelle Boon from the Netherlands.   

There is also a beautiful installation called Hallucinogenic, a look-alike statue dressed in a robe made of gold-plated nutmeg, with two hands that respectively hold a gold plated book and burnt wood.  

Created by artist Titarubi, the installation is named Hallucinogenic because nutmeg can cause hallucinations. Other side effects include headaches, nausea, dry mouth and memory disturbance.

The nutmegs are covered with gold to underline the fact that in the 16thcentury, European colonizers traveled all the way to Banda to hunt for nutmegs that were like a golden treasure for them. Meanwhile, the gold plated book symbolizes the people’s knowledge about nutmeg that they thought was worth gold during the era of Christopher Colombus.  

The burnt wood is a symbol of the pain of the Bandanese people, who were killed and enslaved by the Dutch. The large size of the shinning robe, which is larger than the size of the human body, symbolizes the arrogance of human beings over the knowledge they have.

Artist Made Wianta also delivers a similar message through his artwork called Treasure Islands, which comes in the form of orange and gold buffalo leather that is shaped to resemble the Banda Islands. Decorated with mirrors and nails, the work aims to remind people of the barren landscape on the islands after its treasure, nutmeg, was taken away by the colonizers. The gold color itself refers to the color of the spices.

Dutch curator Sadiah Boonstra, who is a member of the curatorial team, hoped that the exhibition, which was preceded by years of research, would make people more curious about the history of the Banda Islands.   

“The Treaty of Breda is a starting point for us to revisit, rethink, reinterpret and even rewrite the history of Banda. We are trying to provide multiple perspectives on this history,” she said.

Supported by the Dutch cultural center Erasmus Huis and Balai Arkeologi Maluku, the exhibition also aims to connect the past to the present because the treaty had a long-lasting legacy that people still experience today, she added.

Dutch Ambassador to Indonesia Rob Swartbol said that the Banda Islands were renowned for producing spices and as an international trading hub, long before the arrival of the Portuguese, who were the first Europeans on the islands. 

“The Dutch introduced nutmeg to the Netherlands in the 17th century. Trading spices made the Netherlands rich and encouraged the Dutch to continue exploration of the world. This exhibition gives us facts and new interpretations about what happened back then,” he said.

Back to top

North Sulawesi wants its own special economic zone
The Jakarta Post 29 September 2017

North Sulawesi Governor Olly Dondokambey is demanding that the central government establish a special economic zone (KEK) in the province to transform the province into an economic hub in eastern Indonesia.

He has proposed integrating the KEK with Bitung Port. Doing so would transform the port into an international port, he claims.

“In our concept, North Sulawesi will host a seaport that will become a logistics center for other regions in eastern Indonesia,” Olly said in Manado recently, adding that the establishment of an international port in Bitung would create coast efficiencies for the distribution of goods to nearby provinces.

He gave as an example the fact that people in eastern Indonesia have to buy garments produced in China through Jakarta, while actually the Chinese products are imported through Singapore even though shipments from China to Bitung are technically closer.

“Why doesn’t the government open up direct shipments from China to Bitung? If this happens, businessmen from Gorontalo, Maluku and other provinces in eastern Indonesia will not need to purchase garments from Tanah Abang [market in Jakarta]. It will cut costs,” he added.

In the first quarter of this year, North Sulawesi’s economic growth hit 6.42, higher than the national growth rate. (bbn)

Back to top