Updates News April, 17 2017

In the news

President inaugurates toll road access to Priok Port
Antara News, 17/04/2017

Joko Widodo (Jokowi) on Saturday inaugurated toll road access to Tanjung Pirok Port, North Jakarta, to enable smooth transportation of goods from and to the seaport.

"The construction of this port was postponed for two years due to land clearance problem when I was the governor of Jakarta," the Head of State said while inaugurating the operation of the toll road access to Tanjung Priok port in North Jakarta.

He stated that the land clearance problem was finally settled after inspection of the locations several times. The construction of the toll road was also delayed due to mistakes in construction structure, which had to be repeated from the beginning.

"There were mistakes in the construction structure, which resulted in the removal of at least 69 pillars before it could be started again. That is why the project was delayed by about 5 to 6 years," Jokowi noted.

The 11.4-kilometer access toll road is part of the Jakarta outer ring road. The toll road is integrated with land, sea, and railways-integrated transportation modes from and to Tanjung Priok Seaport.

Funded by the Japanese government, the toll road project is constructed with a fund of Rp4.1 trillion through the Japan International Cooperation Agency scheme.
Its construction was started in 2013 and happened to be halted but was restarted in 2008.

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Indonesia needs to do more to attract foreign investment: Jokowi
Antara News, 17/04/2017

President Joko Widodo (Jokowi) said Indonesia needs to do more, and provide greater facilities to attract foreign investors to the country.

The president cited investment which he described as insignificant in amount by Saudi Arabia in Indonesia compared with in other countries.

He pointed to Saudi investment of nearly Rp870 trillion in China almost ten times the investment of Rp89 trillion pledged by King Salman bin Abdulaziz al Saud when the Saudi king visited Indonesia recently.

"That, however, should prompt us to make introspection and correction , why we could not attract larger investment. It could be an input for Indonesia to make large success by improving business facility and legal certainty.

"Indonesia with abundant natural resources should be able to attract foreign investors more than many other countries," Jokowi said after officially commissioning a new Mosque Hasyim Ashari here on Saturday.

He said many foreign leaders have been surprised to learn the countrys abundant natural wealth and social cultures.

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Airlines expand domestic flights in eastern regions
Antara News, 17/04/2017

A 70-seater ATR-72-600 aircraft that took off from the Pattimura International Airport in Maluku Province, Wednesday, landed at West Papua Provinces Utarom Airport at 9:40 a.m. local time.

The arrival of the aircraft was welcomed by West Papua regional government officials and local residents with a traditional dance performance.

The aircraft took off from the Pattimura Airport an hour and 25 minutes earlier and was seen off by Vice President for Region IV of state-owned airlines Garuda Indonesia Sentot Mujiono, Deputy Chairman of Commission V of the House of Representatives, and Assistant I of the Maluku Regional Government Angky Renyaan.

It was a maiden flight by Garuda Indonesia that has opened new routes from Maluku Province to West Papua serving several regions in Indonesias two eastern provinces.

The eastern regions of the country have, so far, been less developed as compared to their western counterparts, thus creating disparities in economic development and advancement. Yet, of late, the government has shifted its attention to also advance development in the eastern provinces of the country.

This has prompted several airlines to start new domestic flights such as what was done by Garuda Indonesia on Wednesday. The carrier is taking anticipatory steps in order to benefit from future economic development.

Lately, airlines, such as Garuda Indonesia, Indonesia Air Transport, Batik Air, and Wings Air, have aggressively started new domestic flights to expand services on routes in eastern Indonesian provinces and regions, such as Sulawesi, Maluku, and Papua.

Batik Air of the Lion Group, for instance, is planning to open a new route from Jakarta to Jayapura, with transit points in Makassar in South Sulawesi and Timika in Papua.

The regional government of Mimika District, Papua, lauded Batik Airs plan to also open flight services to the Mozes Kilangin Aiport in Timika, the district capital of Mimika.

Transportation Service Head of Mimika John Rettob noted in Timika that apart from Batik Air, other airlines, such as Wing Air, also part of the Lion Air Group, are planning to operate flights to Timika.

"Wings Air has long planned to start new flights to serve the Wamena-Timika, Nabire-Timika, and Tual-Kaimana-Timika routes, while Batik Air is planning to start flights on the Jakarta-Makassar-Timika-Jayapura route and a direct fight from Jakarta to Timika," Rettob remarked.

Last month, Wings Air had also opened a new flight route from Manado to Miangas, Talaud Island, North Sulawesi. "For the time being, we fly once a week on Sunday to Mingas Island," Operations Director of Wings Air Redi Irawan stated.

During the maiden flight, Wings Air served the Manado-Melonguane-Miangas-Melonguane-Manado route using an ATR-72-600 aircraft. Wings Air is also planning to open new flights to serve the Ternate-Labuha route in North Maluku Province.

The new route will cover Ternate and Labuha to meet the publics demand for air transportation. "According to the schedule, Wings Air will operate additional return flights on the Ternate-Labuha route in North Maluku. The first flight had departed on March 26, 2017," Ronani Sjarif, the acting head of the Oesman Sadik Airport of Labuha, remarked.

The routes will be served by Wings Airs ATR-72-500-600 series aircraft having a capacity to accommodate 72 passengers.

Garuda Indonesia, which has opened new flight routes from Ambon in Maluku Province to Manokwari-Nabire in West Papua on Wednesday, plans to expand its domestic flights from Manado and other regions in North Sulawesi to Palu and Luwuk in Central Sulawesi.

"This year, we will open new air links from Manado to various regions," Garuda Head for Manado Donald Jerry Rieuwpassa had said in Manado last month (Mar 13).

He stated that the new routes will cover Sangihe, Talaud in North Sulawesi, Morotai in North Maluku, Palu and Luwuk in Central Sulawesi, as well as other regions. For the new routes, Garuda will operate the ATR-72-600 aircraft and Bombardier aircraft.

In its maiden flight from Maluku to West Papua on Wednesday (April 12), Garuda Indonesia used the ATR72-600 type aircraft with 70-seat capacity. It made the maiden flight to serve the Ambon - Kaimana route, which would continue to Manokwari and then return to Ambon.

Garuda will serve the Ambon - Kaimana route on Monday and Saturday; the Ambon - Maonkwari route on Monday, Wednesday, and Friday; and the Ambon - Nabire route on Tuesday, Thursday, and Saturday, he pointed out.

In the meantime, private airlines Indonesia Air Transport will operate regular flights on the route between Makassar, South Sulawesi, and Bungku, Morowali District, in Central Sulawesi.

The inaugural flight was scheduled on Wednesday (March 22) but was canceled, as the airport operation certificate had not been issued by the Ministry of Transportation, Head of Morowalis Transportation Office Harsono Lamusa stated when contacted via cell phone, last month.

According to the plan, Indonesia Air Transport will serve flights on the Bungku-Makassar route six times a week, with ticket prices ranging between Rp800 thousand and Rp1.3 million.

The flights will be operated using an ATR-42 aircraft, as the Maleo Bungkus airport runway is only 1,050 meters in length. "It is expected that next year, the airport will be able to accommodate aircraft, with larger capacity, as we are now extending the runway," Lamusa remarked.

The transportation official said that his side was now extending the runway by 400 meters, so that next year, it will be 1,450 meters long.

Morowali District is the largest nickel producing area in Central Sulawesi. In addition, the palm oil industry, marine products, and marine tourism hold immense potential. However, it is difficult to reach the district via modes of land and sea transportation.

With regular flights operating on the Bungku-Makassar route, people, investors, and tourists will have wider access to Morowali and North Morowali and will help accelerate economic growth and boost welfare of the people in the two districts, according to Lamusa.(*

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Singapore apartments main target of Indonesian property investors
Antara News, 17/04/2017

Indonesian property investors would prefer to go to Singapore if they want to invest in apartments and to Australia to buy houses to be leased out, a survey has said.

Profit, better guaranteed, is the main reason for investing abroad, the survey Property Affordability Sentiment Index by Rumah.com said here on Sunday.

Country Manager of Rumah.com Wasudewan said the Indonesian investors chose to invest in Singapore on better infrastructure, stability and security that would be needed by the would be tenants.

Property Affordability Sentiment Index is an annual survey held by Rumah.com in cooperation with research center Intuit Research of Singapore. The survey involved 1,030 respondents in November-December 2016.

"Singapore has good transport access locally and internationally. For that Singapore has received an appreciation as the Best Location in Asia for expatriates and the 25th best in the world, according to a survey on Quality of Living by Mercer early this year," Wasudewan said.

The results of the surveys matched data from Cushman & Wakefield, an international property consultancy company, which said that in the first half of 2016, Indonesians bought 189 property buildings of various categories in Singapore, or a 23 percent increase compared with the same period in the previous year. Purchases by Chinese and Malaysians declines, but purchases by Indonesians rose 19 percent in the second quarter of 2016.

According to property company Propnex Realty Pte, as quoted from PropertyGuru.com.sg, which handles the sales of luxurious condominiums OUE Twin Peaks in the Orchard Road, Singapore, the developer of the condominiums has succeeded in disposing of almost 50 percent of 86 units built in the first phase at a price of 4 million Singaporean dollar per unit and Indonesians are the main foreign buyers, Wasudewan said.

He said growing number of Indonesians buy property abroad as technology makes it easier to have information about market in other countries. Indonesians buy property abroad especially in Singapore for commercial purpose.

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Tax Collection Until March Paints Positive Outlook for 2017: Official i
Tanjung Pandan, Bangka Belitung.

The government is confident of meeting its tax target this year on the back of strong collection in the first three months that has so far exceeded that of the same period last year, a senior official said on Sunday (17/04).

Total tax collection, including income tax from the oil and gas sector, but excluding customs and excise, reached Rp 222.3 trillion ($17 billion) at the end of March, up 18 percent from a year ago.

 The government has collected 17 percent of its Rp 1,307.6 trillion target by March 31, compared with last year's realization of 14 percent. "This year's tax collection is safe," tax director general Ken Dwijugiasteadi said during a media event in Tanjung Pandan, Bangka Belitung Islands.

Income tax from non-oil and gas sectors, value-added tax, tax on luxury goods, land and building taxes and income tax from the oil and gas sector, also exceeded last year's record.

Tax compliance director Yon Arsal said the government's tax amnesty program last year increased the taxpayer base.

The tax office registered more than 36 million individual and corporate taxpayers, or nearly 10 percent more than the year before. "Looking at the first three months, surely we are looking positively ahead," Yon said.

"We hope last year's [bad results] had bottomed out and the economy has begun to improve, commodity prices to increase, and that the import trend [of capital goods] remains positive," he said.

The government has set an economic growth target of 5.1 percent this year, compared with 5 percent last year. Yon said the tax office looks forward to seeing the collection data at the end of June, to confirm the improving trend.

An improvement in tax collection creates increased fiscal room for development. Weak government revenue has been a "key constraint" to Indonesia's credit profile, so stronger tax collection will likely improve the country's sovereign credit ratings, Moody's said in a credit outlook report on April 10.

The report said Indonesia's state revenue relative to its gross domestic product in 2016 was the lowest among Baa-rated peers, including Colombia, the Philippines, Kazakhstan and Thailand.

Moody's, in a separate note earlier this year, upgraded its credit outlook for Indonesia to "positive" from "stable" and reaffirmed its Baa3 credit assessment – which is at the lower end of investment-grade bond ratings, just one grade above junk.

The better outlook indicates a possible rating upgrade that will allow the country to attract more foreign investors by selling government bonds at lower rates.

Indonesia is also still in the race to win investment grade from S&P Global Ratings, the only one among the big three rating agencies that has so far maintained a BB+ assessment, one notch below investment grade, on Indonesia's sovereign credit.

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Should Indonesia Move Its Capital?

Antara News, 17/04/2017

President Joko "Jokowi" Widodo's request to the National Development Planning Agency, or Bappenas, to do a feasibility study on moving the country's capital from Jakarta since the city has grown too overcrowded has received a mixed response from the business community.

Indonesian Chambers of Commerce and Industry, or Kadin, an influential business lobby group, is worried by the idea, arguing that businesses — most with headquarters in Jakarta — need to consult and lobby the government on a regular basis.

"The business community will support the government's program if it benefits the people, but is this the right time to move the capital, when our economy hasn't yet fully recovered?" Sarman Simanjorang, Kadin Jakarta deputy chairman said on Thursday (13/04).

Hariyadi Sukamdani, a veteran businessman and the chairman of the Indonesian Employers Association (Apindo), said he would not object if the government plans to relocate the capital city.

"When that time comes [to move], information technology will already be much better than today. It won't matter that much [to be away from Jakarta]," he said, adding that he doubts the move would happen soon.

Hariyadi said moving the capital is costly, even if one just considers the cost of moving government officials and legislators to the new capital, and there is no guarantee that it will work to even out income inequality across the county.

Andrinof Chaniago, a public policy analyst at the University of Indonesia and a former national development planning minister, said moving the capital may cost about Rp 10 trillion ($754 million) per year — to be paid for by the state budget — over at least 10 years.

The number is relatively small, equivalent to about 0.5 percent of the Rp 2,081 trillion allocated for government spending in the 2017 State Budget and 2.9 percent of the total government budget on payroll at Rp 343 trillion.

"From the fiscal point of view, moving the capital city shouldn't be a problem," Andrinof said, adding that the government already has a program to develop 10 regional cities into megacities.

The former minister was referring to a government plan locally known by its abbreviation RPJMN to develop infrastructure in 10 cities across the archipelago to spur economic growth.

Bambang Brodjonegoro, the Development Planning Minister, said the ministry is studying the benefits of moving the capital city from Jakarta and scouting for a new location. He expects the study to conclude this year.

An older plan to move the capital city was proposed by former President Susilo Bambang Yudhoyono in 2008. Yudhoyono even established a special team called Visi 2033 — led by Andrinof — to prepare the move.

The plan was cooked up by Andrinof until April 2015 when he lost his position in Jokowi's cabinet.
Moving the capital city from Jakarta is not a novel idea. In 1957, President Sukarno had already said Java will suffer from a population boom and that economic growth in the island will be out of control.

Sukarno came up with the idea of relocating Indonesia's capital to Palangkaraya in Central Kalimantan, where there is minimum risk of earthquake and volcanic explosion.
The idea also resurfaced under the rule of Indonesia's next president Suharto who wanted to move the capital 40 kilometers southeast of Jakarta to Jonggol, West Java. The plan never came to fruition as Suharto lost power in 1998.

In the early years of the republic after the Second World War, the capital was moved from Jakarta to Yogyakarta for security reasons.

On Jan. 4, 1946, Indonesia's central administration was relocated to the royal city after Dutch forces came back to retake the country. The capital remained in Yogyakarta for more than four years before returning to Jakarta on Aug. 17, 1950.

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Oil Imports Account for 50 Percent of Domestic Demand
Tempo.co, 17/04/2017

The Energy and Mineral Resources Deputy Minister Archandra Tahar said that oil imports account for 50 percent of domestic oil demand. “National oil demand currently stands at 1.6 barrels per day, whereas national crude oil output is around 800,000 barrels per day,” he said on Saturday as quoted by Antara.

Therefore, he said, the government is aiming to achieve energy self-sufficiency in accordance with the government’s Nawacita (nine priority programs).

He said that one of the efforts to achieve it is the operations of fuel storage tanks belonging to PT Oiltanking Karimun in Lekup Bay in Karimun District, Riau Province.“We expect that energy security can be improved in a bid to meet domestic demand, particularly oil products,” he said.

Indonesia’s fuel product demand stands at 68-70 million kiloliters per year, or equal to 250,000 kiloliters per day. With a total capacity of 730,000 kiloliters, PT Oiltanking Karimun’ storage tank output is capable of meeting three days of domestic fuel demand.

Earlier, Bank Indonesia (BI) Governor Agus Martowardojo said that fuel and LPG prices may be adjusted in the second half of 2017. “We will discuss whether the condition is feasible to make the adjustment,” he said.

Agus said that he will be taking into account the time of the adjustment, among others. The government ought to ensure that price adjustment does not occur simultaneously with the high inflation rate.

According to him, deflation of 0.02 percent last month was the right time to make the adjustment.

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Garuda to Propose Names for Operation, Maintenance Chiefs
Tempo.co, 17/04/2017

Next week, national carrier PT Garuda Indonesia is set to submit candidate names the company’s chief of operation and chief of maintenance to Directorate General of Air Transportation of the Transportation Ministry, according to the company’s President Director Pahala Mansury.

Pahala added the Ministry would check the qualifications of the candidates.
"After five days, the Directorate General will decide whether candidate names proposed meet the qualifications,” Pahala said in Tangerang on Friday (14/4).
For the record, Garuda has eliminated the position of Operational Director from its structure of organization and the tasks will be taken over by chief of operation and chief of maintenance.

In the meantime, Director General of Air Transportation Agus Santoso said the ministry would evaluate Garuda’s new structure of organization. The Directorate will also evaluate candidate names proposed, he said.

According to Agus, the candidates are required to have competence in accordance with the Civil Aviation Safety Regulation (CARS) 121 and some other regulations.

Agus added it would take at least seven days to do the evaluation.
Meanwhile, Transportaiton Minister Budi Karya Sumadi also appreciated Garuda’s move to change its structure of organization."It’s very positive,” Budi said.

The positions of chief of operation and chief of maintenance are a must in an aviation industry, Budi added.

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Sales of Indonesian Coffee in Italy Expected to Rise
Tempo.co, 17/04/2017

Indonesian Ambassador to Italy Esti Andayani targets economic growth of Indonesia-Italy investment and trade to rise 25 percent during her term of office in Rome.

"25 percent is the overall figure, yes, both in investment trade," Esti said in Jakarta (15/4).
In 2015, the total of Italy investment realization reached US$ 97,99 million that made it the tenth largest investor in Indonesia. Based the data of Foreign Affair Ministry, the trade volume of both countries was US$ 3,82 billion with Indonesia’s surplus as much as US$ 433 million.

Esti said that coffee is the main commodity promoted in Italy. Its export is worth US$ 58,8 million or the third largest export after palm (US$ 975 million), and resin (US$ 93 million).

Esti claimed to have prepared a number of strategies to draw the attention of Indonesian coffee exporters to Italian market, one of which is by means of integrated promotion through participating in annual "World Tourism Expo" in Italy.“Well, tourism here not only promotes the place, but also everything, including coffee," she added

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Kadin Urges Gov't to Maintain Property Sector Growth 
Tempo.co, 17/04/2017

The Indonesian Chamber of Commerce and Industry (Kadin) has urged the government to maintain the stability of property sector growth in order to have a consistent economic growth.

Kadin’s Chairman Rosan P. Roeslani said to do so, regulations that have not been enacted should be consulted first with stakeholders, including business players in property sector, before they are pubished to the mediar or the public.According to Rosan, this is important for businessmen because it would affect the country’s property sector performance.

Rosan added that Kadin is also now making efforts to boost the growth of the country’s property sector because in the past three years, the country’s property industries have been facing tough challenges, caused by among others economic slowdown.

“There must be a shared understanding between the government and business players in property sector so the sector can develop well. Property sector plays an important role for other sectors," Rosan said on Friday(14/

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Garuda to Operate All Flights from Terminal III Starting May
Tempo.co, 17/04/2017

National carrier Garuda Indonesia is set to operate all flights – both domestic and international flights – from Terminal 3 at Soekarno-Hatta international airport starting 1 May this year, according to Indonesian Transportation Minister Budi Karya Sumadi.

However, the relocation of Garuda’s flights to Terminal 3 still needs improvement, the minister said.
“There are things that need to be improved,” Budi said in Tangerang on Friday (14/4).

The minister also asked Garuda and state-owned airport operator PT Angkasa Pura II to carry out a simulation during peak hours before 1 May. The simulation, he said, is aimed at evaluating the service processes, starting from check-in process until the plane operates.

Garuda has up to 15 days before all the flight are officially operated from Terminal 3. The airline previously operated its international flights from Terminal 2 and since the operation of Terminal 3, all its domestic flights were operated from Terminal 3.Garuda Indonesia will use 50% of the terminal, while the rest will be used by airlines allied under the Sky Team.

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