Indonesian President Joko Widodo Announces Sweeping Cabinet Changes (2016-7-27)
E16-4,Tug of war in China-led rail project(2016-2-6-1)
E16-3,Indonesian Growth Beats Estimates as Widodo Lifts Spending(2016-2-6)
New KPK Leaders Resume BLBI Case Investigation(2015-12-30)
President Joko “Jokowi” Widodo continues to monitor all input related to the work performance of his Cabinet ministers, from all aspects, including political parties outside his administration, according to Cabinet Secretary Pramono Anung.“[Jokowi] monitors input from society, observers and political parties, both those who support and those who do not support his administration,” said Pramono as quoted by kompas.com at the Presidential Palace in Jakarta on Wednesday.In response to rumors circulating with regard to the Jokowi’s second Cabinet reshuffle plan, in which State Owned Enterprises Minister Rini Soemarno was touted as one of ministers included, Pramono could not confirm when Jokowi would announce the second Cabinet reshuffle and said that reshuffling the Cabinet was the prerogative right of the President.Commenting on the recent recommendation made by the House of Representatives’ special committee (Pansus), currently investigating the Pelindo case, in which Jokowi was asked to dismiss Rini and state-owned port authority Pelindo II president director Richard Joost Lino from their positions, Pramono said that the President was considering the request.Pramono said Jokowi would convey his stance after he had examined the recommendations thoroughly.“The government will consider [the Pansus recommendation] and we will immediately convey to the public what has been decided by the President and Vice President [Jusuf Kalla],” said Pramono.Earlier, Coordinating Maritime Affairs Minister Rizal Ramli signaled that Jokowi would announce a second Cabinet reshuffle before the end of the year. “It is likely that there will be an announcement before the end of this year. Pak Jokowi will select those suitable for law and economy positions,” said Rizal as quoted by Antara in his CORE Economic Outlook remarks in Jakarta on Nov.18.The second Cabinet reshuffle is needed in order to maintain the momentum of economic improvement, Rizal emphasized, referring to the stability of the rupiah exchange rate and this year’s third quarter economic growth which has grown by 4.73 percent year-on-year.The current economic recovery trend could not be separated from the first Cabinet reshuffle, announced on Aug.13, said Rizal.“The people’s level of confidence in the government has increased. The confidence of market players has improved as well,” he said. “This confidence needs to continue in order to spur further economic growth”, he explained. (ebf)(+) - See more at: http://www.thejakartapost.com/news/2015/12/23/cabinet-reshuffle-jokowi-considers-input.html#sthash.tSG9WqE2.dpuf
New KPK Leaders Resume BLBI Case Investigation(2015-12-30)
Zoom Out Zoom In Normal 2015-12-30
TEMPO.CO, Jakarta - New leaders of the Corruption Eradication Commission (KPK) hinted that they might continue the investigation of suspected corruption in the issuance of a letter of payment (Surat Keterangan Lunas – SKL) in relation to the Bank Indonesia bailout case. KPK Chief Agus Rahardjo said that he will study documents related to the case. "If there are enough evidence, yes, it is possible for the investigation [of the SKL case] to be continued. We cannot make moves without concrete data," Agus said after inaugurating the KPK's new building on Tuesday, December 29, 2015.
Before former KPK leaders of the 2011-2015 period ended their office terms, the Commission had conducted a case file conference and had summarized that there are several parties that can be held accountable. However, until today, the KPK has not issued an investigation order against the suspects of the case.
In its investigation, the KPK had questioned several officials of the Gotong Royong Cabinet for the 2001-2004 period, including State-Owned Enterprises Minister Laksamana Sukardi, former Chief of the National Banking Recovery Agency (BPPN) I Putu Gede Ary Suta; former Coordinating Minister for Economic Affairs Dorodjatun Kuntjoro-Jakti; Finance and Coordinating Economic Minister Rizal Ramli (2000-2001 period); Finane Minister (1998-1999 period) Bambang Subiyanto; and Kwik Kian Gie, who formerly served as the Coordinating Minister for Economic Affairs (1999-200 period) and Head of the National Development Agency (2001-2004 period).
Out of the total Rp. 144.5 trillion of Bank Indonesia bailout fund disbursed to 48 national banks, as much as Rp. 13.4 trillion was considered to have resulted in state losses. So far, only 16 individuals were brought to court in relation to the case. Meanwhile, investigation against other obligators who failed to pay back the fund was terminated.
Previously, KPK Deputy Chief Saut Situmorang said that the Commission will investigate the case back from the beginning.
Ade Irawan, Coordinator of the Indonesia Corruption Watch urged new KPK leaders to show their courage in continuing the Bank Indonesia bailout case investigation. Ade said that the case will be one of the major homework for new KPK leaders. Ade added that by investigating the case, KPK leaders must be ready to face possible political pressure. "One of the possible risk is criminalization, [KPK leaders] must be ready," Ade said.
JAKARTA -- Indonesia’s central bank cut its main interest rate for the first time in 11 months, prioritising a boost to flagging economic growth over concerns looser policy could trigger further currency weakness.
Governor Agus Martowardojo and his board lowered the rate by 25 basis points to 7.25%, Bank Indonesia said Thursday. Thirteen of 23 economists surveyed by Bloomberg forecast the decision, while the remainder predicted policy makers would extend a pause. The authority also cut the rate it pays lenders on overnight deposits, known as the Fasbi, by 25 basis points to 5.25%.
The rate move came on a day when several people were killed in explosions and gunfire in the biggest attack in the capital since at least 2009, hurting sentiment and adding to financial market turmoil.
The central bank has faced political pressure to ease policy and revive an economy growing at the slowest pace since 2009, while grappling with a rupiah selloff. Contained inflation provides scope for policy makers to cut, though they also have to consider fallout from last week's sharp drops in China's currency and stocks.
The decision "is warranted given inflation is turning more favourable, along with more stable external conditions this week," Euben Paracuelles, an economist at Nomura Holdings Inc in Singapore, said ahead of the announcement.
The rupiah has fallen 0.7% this year after a 10% depreciation in 2015. The benchmark Jakarta stock index fell 0.4% as of 1.10pm Bangkok time.
Panasonic dan Toshiba Tutup, 2.600-an Pekerja Dipecat
Tempo.CO, Jakarta - Rencana penutupan usaha PT Panasonic Lighting di Cikarang, Jawa Barat,
dan Pasuruan, Jawa Timur, serta PT Toshiba Indonesia di Cikarang akan berdampak
pemutusan hubungan kerja terhadap ribuan pekerjanya. “Sekitar 2.500 pekerja
akan di-PHK,” ujar Presiden Konfederasi Serikat Pekerja Indonesia Said
Iqbal dalam konferensi pers di Hotel Mega Proklamasi, Jakarta, Selasa,
2 Februari 2016.
Said menjelaskan, ribuan pekerja itu terdiri atas sekitar 1.700 anggota KSPI di PT Panasonic dan 970 anggota KPSI di PT Toshiba. “Mereka yang mengadu bakal diputus hak kerjanya,” katanya. Sayangnya, Said tidak membawa data lengkap yang merinci anggotanya yang terancam PHK.
Baca juga: Harga Minyak Anjlok, SKK Migas: Jangan Lakukan PHK
Saat ini, kata Said, KSPI dan Federasi Serikat Pekerja Metal Indonesia masih bernegosiasi tentang masalah pesangon dengan perusahaan. Tutupnya dua perusahaan Jepang itu, kata dia, tidak hanya berimplikasi bagi pemutusan hak kerja, tapi juga terhadap kepercayaan investasi. "Sekelas Toshiba dan Panasonic, itu akan menimbulkan pertanyaan investor di seluruh dunia. Akibatnya, investor menunggu," tuturnya.
Penutupan pabrik Toshiba dan Panasonic, ujar Iqbal, mengakibatkan investasi terlambat masuk dan ekonomi melambat. Hal inilah yang, kata dia, membuat daya beli buruh menurun. "Saya juga tidak yakin target kuartal pertama pertumbuhan ekonomi 5,3 persen tercapai.”
Baca juga: Jumlah Buruh di Kota Malang yang Kena PHK Melonjak Drastis
Said mengatakan kedua perusahaan tersebut akan tutup pada April 2016. Tentang pesangon dan pelimpahan pekerjaan, kata dia, hal itu masih dalam proses negosiasi. "Ini merupakan sinyal negatif karena ini (Toshiba) adalah perusahaan televisi yang sudah besar," ucapnya.
Lebih jauh, menurut Said, pemerintah harus memastikan implementasi paket kebijakan berjalan di lapangan. Berdasarkan laporan KSPI, Ia mencontohkan PT Jaba Garmindo sudah melakukan kredit usaha agar tidak melakukan PHK. "Tapi ditolak, 4.200 pekerja Jaba Garmindo dipecat," ujarnya.
Industri padat modal, menurut Said, tengah melakukan pemutusan hak kerja secara besar-besaran. Ekonomi tidak juga berjalan efektif ditambah adanya Peraturan Pemerintah 78 Tahun 2015 tentang pengupahan. "Pengawasan ketat terhadap kebijakan dan lihat saja implementasinya di lapangan dan cabut peraturan tersebut," ucapnya.
Indonesia’s economic growth surpassed analyst estimates in the final three months of 2015 as President Joko Widodo stepped up efforts to revitalize Southeast Asia’s biggest economy.
Gross domestic product grew 5.04 percent in the fourth quarter from a year earlier, the statistics bureau said in Jakarta on Friday, exceeding all estimates in a Bloomberg News survey. The economy grew 4.79 percent in 2015, from a previously reported 5.02 pace the year before.
“Not a sheepish end to the year at all,” said Wellian Wiranto, an economist at Oversea-Chinese Banking Corp. in Singapore. “This does point to a strengthening momentum of growth. It’s a good sign that 2016 should see better growth prospects than the previous year.”
The Jakarta Composite Index extended gains after the data to rise 1.8 percent as of 9:50 a.m. local time, heading for the highest close in nearly six months. The rupiah pared losses to trade 0.1 percent lower at 13,653 a dollar, according to prices from local banks. Indonesia’s sovereign bonds rose, pushing the 10-year yield down four basis points to 8.07 percent, the lowest since May 2015, according to the Inter Dealer Market Association
Since taking office in October 2014, the president, known as Jokowi, has sought to boost foreign investment, infrastructure spending and implement bureaucratic reforms to rejuvenate an economy hit by sliding commodity prices. Government spending rose 7.3 percent in the fourth quarter from a year earlier and surged 41.3 percent from the previous three months. Investment rose 6.9 percent year-on-year.
Household consumption, which makes up more than half of the economy, grew 4.9 percent in the fourth quarter from a year earlier. Exports continued to weaken, falling 6.4 percent, amid the economic slowdown in China and reduced demand for the country’s commodities such as coal and palm oil.
The finance ministry is targeting 5.3 percent expansion in 2016, powered by increased government spending on infrastructure and looser monetary policy at Bank Indonesia. Policy makers cut interest rates in January for the first time in 11 months, and have signaled further easing is possible this year.
“At least we have found a recipe for growth in this uncertain global environment,” Finance Minister Bambang Brodjonegoro told investors, government officials and economists at a dinner on Thursday evening. “We are optimistic that 2016 will be better than last year.”
JAKARTA — Indonesia's economy picked up speed in the fourth quarter but full-year growth was still the slowest since the global financial crisis as weak consumption, investment and exports took a toll on output.
Southeast Asia's largest economy grew 4.79% in 2015, underpinned by public spending, data from the statistics bureau showed on Friday. A collapse in prices for its main commodities and cooling growth in major trading partner China, however, weighed on overall growth.
Gross domestic product expanded 5.04% in the October-December quarter from a year earlier, faster than the 4.80% expected in a Reuters poll and 4.73% in the third quarter, as investment growth accelerated thanks to rising public spending.
"The government appears to have found better footing by now and infrastructure projects would start to help momentum more forcefully," said Wellian Wiranto, an economist with OCBC in Singapore.
After disappointing investors with the slow pace of reforms, President Joko Widodo began rolling out a series of stimulus measures in September last year in an attempt to make investment, especially in manufacturing, the main driver of growth. He offered firms tax break of up to 20 years, among other incentives.
Private consumption, which makes up more than half of Indonesia's economy, was more or less stable in the fourth quarter, despite reports of factory closures and lay-offs.
Indonesia's stock market extended its gains after the data, while the rupiah was more or less steady.
To aid growth, Indonesia's central bank cut its benchmark interest rate for the first time in 11 months in January, by 25 basis points to 7.25%.
Bank Indonesia, which next meets to decide policy on Feb. 17-18, has said it will review the need for further easing.
Banking on better government spending and investment, many economists are expecting growth to improve steadily this year after a slowdown for five straight years.
The central bank said it sees 2016 growth at 5.2% and 5.5% in 2017 - the Reuters poll taken before the data had a median forecast of 5.1% growth for this year.
Some analysts, however, are cautious about the outlook.
"At the margin, Indonesia has ended 2015 on a less-weaker footing than we previously thought," said Glenn Maguire, Chief Economist at ANZ Bank in Singapore.
"We are yet to be convinced that the major expenditure categories we need to see bounce to pull the growth recovery onto a more stable trajectory are indeed sustainably recovering."
E16-4,Tug of war in China-led rail project(2016-2-6-1)
The Jakarta Post, Jakarta | Headlines | Fri, February 05 2016, 6:08 PM
The development of Indonesia’s first high-speed railway, which is to connect Jakarta and Bandung in West Java, might see further delays, as the Chinese-led consortium has refused to meet some of the government’s requirements contained in the concession agreement.
Although the consortium, led by the China Railway Corporation, agreed that the government would only provide a political guarantee instead of a financial guarantee as earlier demanded, it had asked the Indonesian government to give it an exclusive right to use the route.PT Kereta Cepat Indonesia China (KCIC) president director Hanggoro Budi Wiryawan said in Jakarta on Thursday that if another high-speed railway could be built near or along its Jakarta-Bandung route, it would hurt the financial viability of the consortium.“A demand for exclusivity is fair,” he said, adding that with an investment of up to US$5.5 billion, a consortium not only needed legal but also business certainty.
He insisted that such an exclusive right should be part of the political guarantee promised by the government and it should be clearly stated as part of the concession agreement.
The Transportation Ministry pledged on Wednesday it would provide a political guarantee to the consortium to ensure that the rail project would not be affected by any future changes in legislation. Hangoro said that the political guarantee should also include the exclusive right to use the route and the track.
The ministry’s director general for railways, Hermanto Dwiatmoko, said that the government was considering building a Jakarta-Surabaya railway next to the Jakarta-Bandung line.
Hanggoro suggested the government just merge both railway projects by using Karawang in West Java as the starting point for the Jakarta-Surabaya rail line. From Karawang to Jakarta, he said, it can use the consortium’s track.If in the future another railway operator wants to use the track, it should be the consortium that will decide whether to allow it, he said.
The Transportation Ministry has proposed nine points of agreement to be stipulated in the concession. The consortium has in principle agreed with most of the proposals, except those related to the starting point of the 50-year concession and the government’s ability to allow other high-speed rail operators in the same corridor.
The consortium wants the starting point of the concession to be calculated from the launch of the commercial operation of the train, not from the issuance of the concession, as proposed by the government.
The groundbreaking for the development of the high-speed railway was held on Jan. 21 in the presence of President Joko “Jokowi” Widodo, but the construction work could not be continued because of licensing problems.
The consortium needs to secure three more permits from the Transportation Ministry to go ahead with the project: the concession agreement, the railway infrastructure operational permit and the building permit.Jokowi recently issued a regulation that included the high-speed railway as a priority project that should receive special treatment from the government.
The decision to include the railway development in the list of priority projects has raised some concerns.
Observers are worried that by categorizing it that way, the government can skip the tight environmental issues and other requirements that are currently hampering progress.
State-Owned Enterprises Ministry special staff member Sahala Lumban Gaol, who is also a commissioner in the consortium, said that the project should be treated like a toll road project in which the concession starts after the operational permit is issued.“How can you make a concession of something that has not even been built?” he said.Sahala said the China Development Bank (CDB), which was slated to lend 75 percent of the estimated project cost of US$5.5 billion, was concerned about the uncertainty in the concession agreement. “They need to be sure that this concession agreement gives certainty and protection for their loan.
They would think again because of the unclear parts of the concession,” he added.In response to the firm request on the concession, Hermanto said that the ministry would have a talk with the consortium about its request.
The railway, which is to span 142.3 kilometers, will have four intermediary station-stops at Halim, Walini, Karawang and Tegalluar. The railway construction is slated to begin this year and trains are expected to start operating by 2019. - See more at: http://www.thejakartapost.com/news/2016/02/05/tug-war-china-led-rail-project.html#sthash.7GhZCNR3.dpuf
JAKARTA—Indonesia’s president overhauled his cabinet for the second time in a year, appointing a World Bank economist and a controversial former military chief in a fresh effort to implement changes to boost development and spur the economy.
President Joko Widodo’s reshuffle was welcomed by many observers, especially the appointment of World Bank economist Sri Mulyani as Finance Minister. But another cabinet position, that given to Wiranto, drew condemnation from human rights groups for his role as a military commander during Indonesia’s bloody invasion of East Timor during that country’s late 1990s independence war. A United Nations court has accused Mr. Wiranto, who uses just one name, of war crimes during that period, but he never faced trial.
Mr. Widodo said the moves were aimed at speeding up development and economic overhauls needed to reduce poverty. He awarded several posts to parties that have thrown support behind his coalition, including Golkar, the former machine of dictator Suharto, who was toppled in 1998.
Ms. Mulyani, hailed as one of Indonesia’s strongest reformers, previously led the Finance Ministry from 2005-2010 before resigning over a dispute involving a bailout of a small local bank, a move challenged by powerful politicians. She cut public debt in half and overhauled the corruption-ridden taxation office. Under her leadership, the Indonesia economy kept growing through the global financial crisis, one of few emerging markets that weathered the downturn.
Ms. Mulyani, now managing director of the World Bank Group, said she would study budget policies and ways to improve growth, and would strengthen the government’s performance so the country could withstand shocks from global economic uncertainty.
Mr. Wiranto replaces Luhut Pandjaitan, another former general, as head of the coordinating ministry for political, legal and security affairs. He leads a small party formed in 2004 when he ran unsuccessfully for president.
Human-rights groups were already planning protests against Mr. Wiranto on Wednesday. “It will complicate the human-rights agenda of the Jokowi administration,” said Andreas Harsono, an Indonesian researcher for Human Rights Watch, referring to Mr. Widodo by his nickname.
A U.N.-backed court charged Mr. Wiranto in 2003 with crimes against humanity for his alleged responsibility in the deaths of more than 1,000 people in East Timor, a former Portuguese colony that Indonesia invaded in 1975. Mr. Wiranto has denied any part in war crimes. He wasn't immediately available to comment Wednesday.
Economists said the shake-up, involving 13 of more than 30 positions, puts technocrats in key offices and further strengthens Mr. Widodo’s political foundation.
The reshuffle is the second in a year as Mr. Widodo tries to boost the economy of the world’s fourth most-populous nation amid a global downturn in commodities. Investor sentiment has improved as the government has started spending on infrastructure development and rolled out an expansive series of policy packages aimed at cutting red tape and bureaucratic inertia.
In her new stint, Ms. Mulyani is expected to improve the government’s revenue collection, crucial for Mr. Widodo to finance the infrastructure projects he wishes to push across the sprawling archipelago, and advance economic overhauls that have been slow to take off.
World Bank President Jim Yong Kim said that she “will increase confidence in Indonesia’s performance and will be highly important for promoting transparency.”
Ms. Mulyani replaces Bambang Brodjonegoro, who was shifted to lead the national development planning ministry. Darmin Nasution, a former central-bank governor, will remain as coordinating minister for the economy.
“I will dedicate all my efforts to accelerating Indonesia’s development agenda with the goal of providing more and better services, particularly to the poor, and ensuring that all citizen will be able to participate in the benefits of a thriving economy,” Ms. Mulyani said in a farewell message to the World Bank.
Leading indicators show growth in Indonesia’s nearly $900 billion economy has ticked up slightly in the first half from a six-year low. In addition, the rupiah has stabilized, and the country’s central bank has cut its benchmark interest rate by 1 percentage point to 6.5% since the start of the year.
However, Indonesia has struggled to boost its budget revenue, and analysts say more is needed to attract investors, reduce the country’s reliance on commodities and improve rule of law.
Ms. Mulyani’s “previous market-friendly policy stance, now strengthened with a global aura, will be a big plus to Jokowi’s economic reform agenda,” said Wellian Wiranto, an economist at OCBC. Indonesian stocks rose 1.6% after the announcement of her appointment
Mr. Wiranto takes over Indonesia’s top security ministry at a time of heightened tensions in the South China Sea, where the government is building up its military presence amid uncertainty over China’s long-term ambitions in the region.