The President Post T H E

S P I R I T

O F

I N D O N E S I A

Display until January 12, 2011 /// N0. 19

www.thepresidentpost.com

RI, China Reaffirm Strategic Partnership Foto: www.presidensby.info/Rusman

JAKARTA (TPP) – Only one day after the presidents of the US, Barack Obama, and Austria, Heinz Fischer, left Indonesia last month, President Susilo Bambang Yudhoyono received a courtesy call from the Speaker of the Chinese parliament, Wu Bangguo, during which they discussed the strategic partnership between the two countries.

B

oth statesmen reaffirmed their countries’ commitment to achieve targets they had agreed upon in the part-

nership. In 2005 the president and his Chinese counterpart set up a strategic partnership that among others calls for bilateral trade to reach US$50 billion by 2014. In the past ten months the figure has reached almost US$34 billion, up by 54 percent over the same period last year. It is expected that the level would hit the US$40 billion mark by the end of te year. Indonesian non-oil/gas exports to China in the first nine months of this year stood at US$9,305 billion, or about 10 percent of the country’s total non-oil/gas exports. China is one of the three largest Indonesian exports destination countries along with the US and Japan.

However, Indonesia`s imports from China in the first eight months of this year were higher than its exports to the latter, causing a deficit of US$4.428 billion. Deputy Trade Minister Mahendra Siregar said recently that the deficit is expected to fall this year. “This year two-way trade between Indonesia and China is expected to increase sharply compared to the same period last year. As such, the deficit of our trade with China this year is likely to fall from 2008,” he said. Meanwhile, official data showed that Chinese investment in January-May reached US$140 million, up by 39 percent over the same period last year. Last year Chinese investors pumped in US$226 million into Indonesia’s economy. The country also offers US$2 billion in low-interest loans for infrastructure projects. During that 30-minute meet-

The government will buy Newmont`s shares under a 2010 divestment allocation based on the price negotiation reported by the Minister of Energy and Mineral Resources to the Finance Minister.

ing, the Indonesian president expressed his hope to see an increase in Chinese investment here, especially in infrastructure. A prime example of China’s major investment here, and one that has become the symbol of the strong friendship between Indonesia and China, is the Suramadu bridge. It links the province’s capital city with the island of Madura and was designed by Indonesian engineers and built with funds from China. Bangguo arrived at the Merdeka Palace with Deputy Speaker and Secretary General Li Jianguo, Member of Parliament Li Zhaoxing and China’s ambassador to Indonesia,Zhang Qiyue. Earlier Bangguo had met with Vice President Boediono, to whom he expressed his concern over major natural disasters that have lately hit Indonesia. “China is always ready to help Indonesia,” Bangguo told the vice president.

“There will soon be a decision on buying the 2010 divestment shares because the time to make the decision was set at December 16 or 30 days after the Finance Minister received a report on the price from the Minister of Energy and Mineral Resources,” Commissioner of PT Daerah Maju Bersaing (DMB) Heryadi Rahmat said here Wednesday. PT DMB is a joint enterprise with three regional administrations in West Nusa Tenggara (NTB), namely NTB province, Sumba regency, and West Sumbawa regency. President Susilo Bambang Yudhoyono received the Speaker of the Chinese parliament, Wu Bangguo, at the Merdeka Palace last month.

Photo: www.presidensby.info/abror

The US envoy is in Nusa Dua to represent his country in the third Bali Democracy Forum which ran from Thursday to Friday last week.

Four heads of state/government, 18 ministerial-level officials, and participants from 71 countries are at the 3rd Bali Democracy Forum.

BDF`s main objective this time is to build a forum for regional cooperation to improve the quality of political life through dialogs and exchange of views and experiences to strengthen democratic institutions and to maintain peace, stability, and prosperity

Four heads of state/government, 18 ministerial-level officials, and participants from 71

countries are at the 3rd Bali Democracy Forum. The first BDF in 2008 was attended by participants from 40 countries and the number rose to 48 at the forum in 2009. Participants of the forum this time will discuss the relationship between democracy and peace, and determine how development

can strengthen peace. BDF`s main objective this time is to build a forum for regional cooperation to improve the quality of political life through dialogs and exchange of views and experiences to strengthen democratic institutions and to maintain peace, stability, and prosperity in Asia.

THE ECONOMY

BUSINESS

FINANCE

TOURISM

RI Economy Set to Grow 7.8 Pct in 2015

Garuda’s Debts Fall to $477 m

MAHATHIR MOHAMAD: Islamic Finance to Grow and Prevail over Western Model in South-East Asia

Indonesia Did Well, but Others Did Better

Shariah-compliant lending can succeed where the West has failed.

While Indonesia has been successful in attracting international tourists, it is also true that neighboring countries have been doing better through more aggressive campaigns.

PAGE B4

PAGE C1

President Susilo Bambang Yudhoyono officially opened the 3rd BDF at the Bali International Convention Center (BICC) here on Thursday. Several heads of state/government delivered a speech at the

The central bank predicts the economy will grow 5.5-6.0 percent in 2010, 5.86.8 percent in 2012, 6.1-7.1 percent in 2013 and 6.6-7.6 percent in 2014.

PAGE A4

opening ceremony, namely South Korean President Lee Myungbak as co-chairman, Sultan Bolkiah of Brunei Darussalam, and Timor Leste Prime Minister Xanana Gusmao.

The national flag carrier is expected to sell 30 percent of its shares through an initial public offering (IPO) in the first quarter of next year.

PAGE B1

Govt to Buy Shares of Newmont The government will soon buy seven percent of the shares of PT Newmont Nusa Tenggara, a company commissioner said.

US Envoy: BDF Contributes Much to Democracy in World

The Bali Democracy Forum (BDF) which is gathering for the third time since its establishment three years ago has made a significant contribution to the promotion of democracy in the world, according to a US representative. “We believe the forum which was initiated by Indonesia has made a very significant contribution to the development of democracy in the world,” US Ambassador to Indonesia Scott Marciel told Antara in Nusa Dua Thursday. The US envoy is in Nusa Dua to represent his country in the third Bali Democracy Forum which ran from Thursday to Friday last week.

IDR 20,000

Yogyakarta Safe for Visitors: Tourism Minister Yogyakarta remains a safe place to visit despite the fact that the region was also affected by the recent eruptions of Mount Merapi, Culture and Tourism Minister Jero Wacik said here last week. “Mt Merapi eruptions are over and Yogyakarta is now as safe as before for visitors. This is proven by this Wisdom 2010 international conference hosted by Gajah Mada University and attended by important personalities from other countries,” Wacik said after closing the meeting. He said he appreciated the foreign participants

Culture and Tourism Minister Jero Wacik

of the meeting who had decided to come to Yogyakarta despite continuous media reports on the deadly eruptions of the volcano between October 26 and November 8, 2010. “By visiting Yogyakarta, they have also encouraged people in many parts of the world not to

hesitate to come to Yogyakarta,” he said. “There had been visit cancellations during the eruptions, yet now Yogyakarta is safe again for visits. So, welcome back to Yogyakarta,” he added. The International World Conference on Science, Education and Culture (Wisdom) 2010 was postponed from its November date due to Mt. Merapi`s eruptions. It was then held from on December 5-8. Keynote speaker was President of Ocean Futures Society, JeanMichael Cousteau, an explorer, environmentalist, educator, film producer and the Executive Vice President of The Cousteau Society for nearly 20 years.

The President Post

A2 December 12, 2010

www.thepresidentpost.com

Viewpoint BRIDGING JAVA-SUMATRA AND PENANG:

Toward ASEAN Connectivity By Cyrillus Harinowo Hadiwerdoyo

The Indonesian Government should make serious considerations to participate in the development of the Dumai–Penang Bridge. It will be “too dangerous” to leave it entirely to the Malaysian company as the major portion of the bridge will be in Indonesian soil and waters.

R

ecently I had a taste of trying the high-speed train of Taiwan. I left Taipei at 10.30 am and arrived in Kaohsiung, the Southern Port City of Taiwan, at 12.06 pm. During that span of time the train stopped at two stations. The train, which can reach a speed of around 300km an hour, encountered similar trains from the opposite direction along the way. Each wagon accommodates 100 seats, while one set comprises 12 wagons. This means the whole train has the capacity to accommodate over 1,000 passengers each trip. In addition, the frequency of the trips is very high; the train runs three times each and every hour. Having taken a similar train in China that connects Beijing with Tianjin, I have a strong belief that such mode of transportation is sure to become the model in coming years. With that kind of experience, I envision a similar thing may happen between (Bali) Java, Sumatra, Penang, an island off the Peninsular Malaysia, with a possible connection to the Trans Asia Railway System. This idea arose from the recent plan to build a bridge between Java and Sumatra. It was launched by Artha Graha Group several years ago by way of Wiratman and Associates, which now has become almost a

commitment of the Government to realize through the so-called “Public–Private–Partnership” scheme. The Government has assigned a task force to study more seriously this giant project. A few weeks ago I read an interesting report that says a Malaysian company had just launched the idea of building a bridge across Malacca Straits with strong financial backing from banks in China. The company, Straits of Melaka Mitra Sdn. Berhad, had grappled with the idea for some time now. In fact, the idea was launched for the first time by former Prime Minister Mahathir in 1995 but was then shelved during the Asian Crisis in 1997. The company last year made a presentation to the Meeting of Sumatran Governors in Dumai to seek their support. While the first reaction from the Central Government was not immediately positive, we can be sure that with the passage of time the idea will seep in through the bureaucracy in Jakarta so that a few years from now it will become a reality. If this project can be realized, it will become a big boost for the idea of having ASEAN Connectivity. The fact that Indonesia is an archipelagic state should not hamper closer intra-ASEAN connectivity to support the idea of ASEAN Single Market, formally called ASEAN Econom-

ic Community, in 2015 (See also ASEAN). With closer connectivity, intra-ASEAN trade, which is now already in-sync with regional production networks designed by various automotive Industries, will get a huge boost. At the end of the day, such a networking will enhance production efficiency and ultimately bolster the prosperity of the region. The transportation of Completely Built-up (CBU) or Completely Knockeddown (CKD) cars from one country to the other through the highway and railway networks is set to become more convenient. What should the Indonesian Government do to realize these massive projects? First, the Indonesian Government should speed up the process of developing the bridge that connects Java and Sumatra. The Artha Graha Group, or whoever wins the tender bid to build it, should seek financial back-up from dependable sources. China and Japan have shown interest in such a project. But countries in Europe, such as France or Austria, may also have a strong interest on the basis of their strength and experience in railway industries. Second, the Indonesian Government should make serious considerations to participate in the development of the Dumai– Penang Bridge. It will be “too

dangerous” to leave it entirely to the Malaysian company as the major portion of the bridge will be in Indonesian soil and waters. The Malaysian company has let it be known that financial backup is not a big issue. Third, the Indonesian Government should also make serious plans and preparations to build a highway and railway system which will connect Java, Sumatra and Penang. In fact, the possibility of developing a high-speed train between those places should also be very seriously considered. With current developments of various high-speed trains taking place all over the world, we can predict that high-speed trains will become the norm ten years from now. The big projects will certainly face obstacles in the form of financial viability. Does the Indonesian Government have the financial clout to take on all these projects? I have been following discussions on projects in Indonesia, and financial viability is certainly at the top of the list. Indonesians, especially the Government, have often underestimated their financial capability. Take the Java- Sumatera Bridge, which will cost over US$10 billion. The figure has numbed Government executives related to this project, but it has not discouraged, Artha Gra-

ha Group, appears to have access to strong financial support. The Government will eventually chip in to support the project. Assuming that the amount of support of the Government reaches Rp 50 trillion for the next ten years, it could be spread over 10 years or just Rp 5 trillion a year. In 2010 alone, the amount of undisbursed Government expenditure budget may reach over Rp 50 trillion. So Rp 5 trillion is really nothing. At the same time, at the time of the publication of this article, idle Government funds may reach over Rp 200 trillion, more than double the total financial investment of the bridge. Similarly, the Straits of Malacca’s Bridge will also cost us around US$10 billion. Again, the same story applies here. In fact, with the support of the Malaysian Government, the cost for each country will become significantly smaller. The gist of this article is that the Indonesian Government should indeed sharpen its intellectual capacity so that the ability to digest such complex projects as well to implement visions will be very much in line with the role of Indonesia in ASEAN as well as in the global economy. The writer is an economist and a regular columnist in several national media.

The gist of this article is that the Indonesian Government should indeed sharpen its intellectual capacity so that the ability to digest such complex projects as well to implement visions will be very much in line with the role of Indonesia in ASEAN as well as in the global economy.

The President Post

www.thepresidentpost.com

December 12, 2010 A3

Perspective Maintaining Padang’s Maritime Local Wisdom By Pontjo Sutowo and Martono Yuwono

Great cities like Paris, Venice, and Florence followed master plans in which visionary leadership emerges at the right time for designs to make an indelible imprint on people and places .As a result of vision, some cities emerged as works of art. (Marketing Places by Philip Kotler, Donald H. Haider, Irving Rein)

W

hat comes to mind when you think of Minangkabau? A poet, likewise when you think of the port city of Padang. The city is outstandingly charming, has a strong character and is acknowledged as beautiful as Minangkabau poetry. So much so that Queen Wilhelmina of the Netherlands named it Teluk Bayur. Located on top of a hill of natural beauty and embraced by a coastline of the central part of West Sumatra, Padang, the capital city of West Sumatra, was built as if had been carved out of from the earth. The city displays an unforgettable poetic character. The city is constantly undergoing changes but allows the past, present and future to coexist in harmony. What comes first to mind when you hear of Padang? The city’s people, of course, who responded quickly to the deadly tragedy caused by the recent earthquake. They are determined to see the city retain its original form. Padang faces huge challenges in the aftermath of the earthquake that almost destroyed totally the beautiful city. Remarkably, the Padangese rallied with a strong spirit and resolve to rebuild the city.

The big question is, how and what methods should be deployed to reconstruct the city? The reconstruction and the development of the battered city is not only a physical, economical, technical or ‘ad-hoc’ management issue. We are dealing with a living organism with a soul that developed a culture inherited from the founding fathers and as such should be honored as tradition. The Padang tragedy is a universal phenomenon: the destruction of cities by various causes, from wars (World War I and II) to natural disasters such as typhoon, floods, tsunami, landslide, earthquake and even improper city planning. Disasters experienced by cities are considered as part of mankind’s risk in living in this world. The reconstruction of any city overcoming near-total destruction entails its citizens’ spirit of revival. As such, the nation needs a kind of redevelopment vision as a basis for a proper reconstruction strategy and policy. Padang should come up with a reconstruction strategy based on their aspiration and based on Minangkabau traditions. In fact, almost cities all in the world are, or will be, in trouble in the near future due to their own specific problems. The phenomenon of globalization should cities

more conscious of their responsibility in preparing fierce competition in the near future. The era of 2020 is marked by two forces, namely the globalization of the world’s economy and the accelerating pace of technological changes. Those are the two forces that require all cities to learn how to compete with their neighbors.

The reconstruction of any city overcoming near-total destruction entails its citizens’ spirit of revival. As such, the nation needs a kind of redevelopment vision as a basis for a proper reconstruction strategy and policy. A marketing approach to city’s development is a new innovation to solve urban woes and at the same time to position its strong image. This is a new approach in developing a city in order to anticipate the ever- changing political and social situation of the world economy.

Like Paris, Venice and Florence, Padang has exotic resources to be shown to visitors. But the city needs a proper master plan and visionary leadership in the wake of the earthquake in order to revive its spirit. Many cities in the world are very ambitious in promoting themselves to compete for world status Their visions range from the quest to merely developing national pride to promnoting investment, tourism and business. The Padang Waterfront Indonesia, the largest maritime nation in the world, is the pearl of the east because of its cultural landmark and natural beauty surroundings. Padang has a great opportunity to revive its grandeur of the past, due to its rich tradition, history, culturally strong character and incredibly beautiful waterfront. Padang needs a great vision. The waterfront strip along the shoreline and the Batang Arau river are the strengths of Padang. The Batang Arau river is the site of the old fish market and should be kept intact. The idea of developing Minapolitan is laudable; it should be part of the city and be promoted as the city’s new frontier. This approach could be a kind of panacea to overcome the trauma of the earthquake. The development of Padang Wa-

ter/Riverfront can be part of the city’s strategy to anticipate the potential threat of tsunami. The city and its great elements of priceless cultural heritage mingled with its unique natural beauty should be underscored as the city’s future prestigious achievement in large-scale urban redevelopment program in Indonesian history of city planning. The Padang reconstruction should be seen as the city’s development strategy for 2020. The Padang solution should become a national movement bearing maritime local wisdom, reflecting the search for Indonesia’s great vision to reconstruct cities of this great maritime country. Conclusion The Nusantara harbor is a ‘secret passage’ for Indonesia to reclaim its strong maritime identity as a seafaring nation. The Genderang Bahari campaign is aimed at preparing the reawakening of the national spirit of Back to the Sea, a cultural trait we inherited from our founding fathers. Hopefully, the seeds of the spirit of the Blue Revolution will emerge from the city of Padang. Last but not least, Minapolitan should be recognized as a great landmark, a kind of beacon that would shine on the secret passage to the great Nusantara of the past.

“

The Padang reconstruction should be seen as the city’s development strategy for 2020. The Padang solution should become a national movement bearing maritime local wisdom, reflecting the search for Indonesia’s great vision to reconstruct cities of this great maritime country.

DEVELOPING SUSTAINABLE INFRASTRUCTURE ACROSS THE PROVINCES

A KADIN INITIATIVE

CONTACT : PT Infrastructure Asia Kantor Taman A9 Unit C7 Lt. 3 Kawasan Mega Kuningan, Jakarta 12950 - Indonesia T +62 21 576 4440 | F + 62 21 576 4552 [email protected]

MEDIA SUPPORT :

12 - 14 April 2011 Balai Sidang Jakarta Convention Center Jakarta, Indonesia

“We are committing USD 50 billion from a budgetary standpoint for the development of infrastructure as part of a USD 150 billion five-year program” HE Gita Wirjawan, Chairman of the BKPM Knowledge@Wharton July 21, 2010 Indonesia International Infrastructure 2011 Conference & Exhibition (IIICE 2011) is the only event in Indonesia to stage the full potential for sustainable infrastructure growth in each of the 33 provinces of the Indonesian archipelago alongside national priority planned projects for tender by the central government. Attend IIICE 2011 to review the full range of current and future infrastructure projects with Governors and Senior Infrastructure Development Officials from the 33 Indonesian Provinces together with Central Government Senior Officials related to infrastructure development.

Don’t miss the opportunity to involve your company in the five-year program to develop infrastructure in Indonesia!

www.indonesiainfrastructure.org

The President Post

A4 December 12, 2010

www.thepresidentpost.com

The Economy RI Economy Set to Grow 7.8 Pct in 2015

ECONOMIC UPDATES FAO: RI is world`s fourth biggest shrimp producer The Food and Agriculture Organization (FAO) has placed Indonesia in fourth position on its list of shrimp producing countries in 2010 after China, Thailand and Vietnam, a fisheries ministry official said. The ministry’s Chief of Statistic and Information bureau Soen’an H Poernomo said Indonesia was in fourth position after China in first position with a production 1.3 million tons, Thailand second (560,000 tons) and Vietnam in third (370,000 tons). Marine and Fisheries Minister Fadel Muhammad said last August Fadel Muhammad the government had initially set the country’s shrimp production target for 2010 at 400,000 tons. But due to a disease that had infected shrimps, the figure had been revised downward to 350,000 tons.

RI’s q3 fuel consumption reaches 92.5 mln barrels Domestic fuel consumption in the third quarter of 2010 rose to 92.5 million barrels from 87.7 million barrels a quarter earlier on rising economic activities, a Bank Indonesia report said. The higher fuel consumption in the transportation and electricity sectors was responsible for the increase in the third-quarter fuel consumption, the central bank said in its balance of payments (NPI) report issued early this month. Fuel consumption in the electricity sector also showed an upward trend in line with rising demand for electrical power as a result of increasing production activities at home, the report said.

Govt to build new cargo port near Jakarta The government`s plan to build a new cargo port near Jakarta was discussed by visiting Vice President Boediono and Japan Bank for International Cooperation (JBIC) President Hirose Watanabe here early this month. “The JBIC hailed the government’s plan but it suggested that the port should be equipped with a railway infrastructure to smoothen goods transportation,” Boediono’s spokesman, Yopie Hidayat, said. “They are interested in constructing Yopie Hidayat a special railway, including a new port because the present port of Tanjung Priok is already overburdened, “ he said. “They proposed that a special railway track be built from industrial zones to the port,” the vice presidential spokesman said.

Two power plants in Jayapura to operate in 2011 Two power plants which have been built in recent years by state electricity company PT PLN`s Jayapura region will start operation in mid-2011, director of PT. PLN, Dahlan Iskan, said here last month. “It is hoped that in mid-2011 Holtekamp thermal power plant and Orya hydropower plant will become operational,” he said. Yopie Hidayat “When these two power plants have become operational, PLN Jayapura region will save tens of billions of rupiahs a month or half a trillion rupiahs a year,” he said. The Holtekamp thermal power plant is located in Muara Tami sub district, Jayapura city and the Orya hydropower plant in Genyem sub district, Jayapura district with a capacity of 200 megawatt each.

The central bank predicts the economy will grow 5.5-6.0 percent in 2010, 5.8-6.8 percent in 2012, 6.1-7.1 percent in 2013 and 6.6-7.6 percent in 2014.

T

he Indonesian economy is projected to grow at a 6.87.8 percent in 2015 with the inflation rate tending to decline and fundamental factors continuing to improve, Bank Indonesia said early this month. The most important fundamental factor is that capital growth has returned to normal after the 2008 global economic crisis and the government`s corrective measures on the structur-

al side to speed up efforts to increase productivity and economic efficiency, the central bank said in its 2010-2015 Indonesian economic outlook, a copy of which was made available recently. The central bank predicts the economy will grow 5.5-6.0 percent in 2010, 5.8-6.8 percent in 2012, 6.1-7.1 percent in 2013 and 6.6-7.6 percent in 2014. Exports have been projected to grow slightly at a range of 10.411.4 percent in 2015 from 8.19.1 percent in 2010 as a result of the slow global economic recovery shadowed by pressure on currencies due to the absence of bal-

grow 11.4-12.4 percent in 2010, 8.2-9.2 percent in 2012, 8.4-9.4 percent in 2013 and 10-11 percent in 2014. Meanwhile, imports are expected to grow to 11.5-12.5 percent in 2015 from 10.7-11.7 percent in 2011. BI has projected imports to grow 16.1-17.1 percent in 2010, 11.3-12.3 percent in 2012, 10.1-11.1 percent in 2013, and 11.2-12.2 percent in 2014.

Darmin Nasution Bank Indonesia Governor

anced global economic recovery, the report said. The central bank predicts exports of goods and services to

RI Exports Set New Records The Central Board of Statistics (BPS) said Indonesia`s exports in October 2010 rose 15.14 percent to US$14.22 billion in the same period a year earlier. “The October export performance is a new record,” BPS head Rusman Hariawan said at his office here recently. He said the old record was set in December 2009 when exports were recorded at a total value of US$13.3 billion and in August 2010 when they reached US$13.7 billion. Rusman said that the value of Indonesia`s exports in October 2010 was 16.72 percent higher than that of September 2010 which was US$12.08 billion. He said that the total exports in October 2010 which stood at US$14.22 billion consisted of among others US$11.61 billion from non oil and gas commodities while US$2.61 billion from oil and gas commodities. Indonesia`s cumulative export value from January to October 2010 stood at US$125.13 billion or an increase of 35.45 percent from that in the same period in 2009. Non-oil exports stood at US$103.40 billion, an increase of 32.21 percent compared with the same period last year.

2010 inflation to be around six percent Bank Indonesia Governor Darmin Nasution said this year`s inflation rate is expected level off at around six percent. “Year to date inflation until November (January-November) will clearly still be below six percent and so we can still hope it will remain around six at the end of the year,” he said. Regarding next year`s inflation

he said he still believed it would still be 5.3 percent in line with the assumed 2011 national budget, if no extreme conditions or unpredictable weather phenomenon happened. The chief of the National Bureau of Statistics, Rusman Heriawan, meanwhile also said that this year`s inflation would still be below six percent but would pass the assumption of 5.3 percent put in the 2010 budget. “If inflation occurs in the next two months it means it will surpass 5.3 percent because inflation from January to October has reached 5.35 percent. He said his office recorded inflation in October reached 0,06 percent and so in the calendar year from January to October it had reached 5.35 percent while the year on year inflation last year was recorded at 5.67 percent,” he said.

Bank Credits Reach Rp1,664 trillion Since early this year credits were recorded rising by 16.37 percent to Rp234.08 trillion or 21.93 percent or Rp2999.32 trillion compared to the same period last year.

The Central Board of Statistics (BPS) head Rusman Hariawan

Rusman said that with this export performance, the total of Indonesia`s exports at the end of 2010 could be expected to reach US$150 billion. “If the export value target for November was set at 12 billion dollars, and for December at 13 billion dollars, I think, these figures can well be achieved because the balance is US$25 billion only,” he added. RI`s October imports total US$12.15 bilion BPS also recorded the value of Indonesia`s imports in October 2010 at US$12.15 billion, or an increase by 25.81 percent from the previous month`s figure. “The October import value also increased by 28.80 percent if compared with that in the same period last year,” Heriawan said. He said of the overall value of imports in October, non-oil imports accounted for US$9.76 billion, which was an increase by

27.54 percent from the previous month. The October imports included machinery and mechanical equipment worth US$1.92 billion or an increase of 31.10 percent from the previous month. In the meantime, gas and oil imports in October 2010 totaled US$2.38 billion or an increase of 19.21 percent from September 2010. Indonesia`s cumulative imports in the January - October 2010 period stood at US$109.54 billion, or an increase of 40.95 percent from a corresponding period in 2009. During this period, non-oil imports accounted for US$87.71 billion or an increase of 39.98 percent from the same period in 2009. Oil and gas imports in the January - October 2010 period were also high reaching US$21.82 billion, an increase by 44.96 percent from the same period a year earlier.

Until the second week of November the total amount of credits extended by banks reached Rp1,664.2 trillion following an addition of Rp234.08 trillion in credits this year, a Bank Indonesia (BI) spokesman said. Difi A Johansyah, BI’s chief information officer, said here recently, since early this year credits were recorded rising by 16.37 percent to Rp234.08 trillion or 21.93 percent or Rp2999.32 trillion compared to the same period last year. In the week under review, bank credits however were recorded to be slightly down by Rp1.04 trillion due in particular to a decline in credits in foreign currencies by Rp1.19 trillion while credits in rupiah currency rose a bit by Rp0.15 trillion. The rise of credits in rupiah currency in the week was only found in mixed banks (Rp0.06 trillion) and

in regional banks or BPDs (Rp0.75 trillion). Credits in state-owned banks and foreign bank chapters were down respectively by Rp0.36 trillion and Rp0.30 trillion. The drop in foreign currency credits in the banking industry in the reporting week was driven by a drop in foreign currency credits in state-owned banks (Rp1.92 trillion). Credits in private, foreign bank champters, mixed banks and regional banks rose with the highest recorded at mixed banks totalling Rp0.55 trillion. In foreign denominations the foreign currency credits dropped 151.40 million US dollars.

The President Post

www.thepresidentpost.com

December 12, 2010 A5

The Region ASIAN REGIONALISM:

The Development of Asia’s Political-Economic Architecture By Atmono Suryo

T

DRIVING FORCE he Asian economic landscape and its political-economic architecture have changed considerably during the last few decades. One explanation is that a new world economic setting is slowly and silently on the move. Asia is moving to center stage: a distinct Asian hemisphere is in the making. One cannot deny that ASEAN with Indonesia in the lead has made a modest contribution as an important driving force. Since its establishment in 1967 and despite its many shortcomings, ASEAN has given its share in the development and rise of the ASIAN political-economic and security architecture.

figure 1: Gross Domestic Product (GDP) in billion US dollars and rate of charge of real GDP, 2008 12

10

Fathers of ASEAN stressed that ASEAN be “fully plugged into the international grid, hooked on to the dynamism of the global engines of growth, reaping all the benefits that a full economic engagement with the rest of the world could bring”. To go global was already in the mind of the ASEAN leaders in the sixties. No reference was made at that time to Asia and the need to go regional. The reason was that forty three years ago the Asian region was still a region in jeopardy—a very poor, war-torn and a politically restless region. The study undertaken by ADB (Asian Development Bank) signals in much detail the emergence of Asian regionalism, an Asian partnership for shared prosperity. ADB clearly recognized that ASEAN countries have been at the forefront of Asian regionalism. ASEAN has also been active in expanding the scope of regional cooperation.

In the area of security, the establishment of ASEAN itself could be seen as one of the first attempts to seek peace and security for the South East Asian region with its ramifications to the Asian continent. ASEAN’s establishment was held amidst the risks of the spread of regional armed conflicts that were triggered and supported by outside powers involved in the Cold War. ASEAN’s Founding Fathers came up with their resolve to develop a Southeast Asia which is safe, secure and living in peace and prosperity. They built a system of peaceful coexistence in Asia starting with the Southeastern region.

Another important step was taken in the region with the establishment of APEC (Asia Pacific Economic Cooperation) some two decades later in 1989. It reflects the growing interdependence of countries in the much larger area: the Asia Pacific region. Stretching to countries on the other side of the Pacific Ocean, including the United States, Canada and Chile, APEC’s establishment reflects the need for closer cooperation at the end of the Wold War.

Throughout the years very limited progress has been achieved on this score. Sub-regional conflicts, big or small, continue to exist. The security issue is widening in scope to include the threat of terrorism. ARF (Asian regional forum) established in 1994 at ASEAN’s initiative and concerned with regional security matters continues to be in a paralyzed state. The ARF includes all the major players in the Asia-Pacific region. All over the world the issue of security continues to be a complex and unsurmountable problem. Likewise, the Asian security architecture continues to be dim.

Until today, the Bogor Declaration. which was born in an ASEAN country, Indonesia, is still considered as an important basic document for APEC’s endeavors. ASIAN PROGRESS Lately much attention is being given to Asia, namely about its incredible growth and its move to become the center of the global economy. The Asian Development bank often refers the present Asia as an economic dynamo. One should note that in terms of GDP, ASEAN’s size is still small but it is already fifth in the global economy as of 2008 (See Figure 1): 1) EU 27 ($18,142 billion), 2) USA ($14,265), 3) Japan $4,924, 4)China ($4,402), 5) ASEAN (1,507), 6) India ($1,210), 7) Australia-New Zealand ($1,139) and 8) ROK Republic of Korea ($947).

Economic regionalism Progress is being made with regard to the development of economic regionalism. The establishment of the association by five countries (Indonesia, Malaysia, Thailand, the Philippines and Singapore) could be seen as the beginning of the development of economic regionalism in Asia. As Noordin Sopiee stated in one of his writings, the Founding

The following summary shows some of the progress made by Asia in various important areas such as:

4,402 China

8

Real GDP growth in per cent

Lately much attention is being given to Asia, namely about its incredible growth and its move to become the center of the global economy. The Asian Development bank often refers the present Asia as an economic dynamo.

India

6

1,507

ASEAN

4

AUS & NZ

0

-(2)

Cambodia

Poverty: Asia has made progress in terms of percentage in the area of poverty reduction. In terms of quantity, however, the progress made is not enough. But it will be noted that not long ago the region was one of the poorest regions in the world. Today the situation is to a very large extent different, as per capita income has grown in most Asian countries. Trade: This is the most successful area of the region’s progress. What is being achieved by China and India is incredible. The production and distribution networks set up by the Asian countries are amazing. It is no surprise that Asian goods are reaching consumers all over the world, sold at cheaper prices with abundant supply. The development of Asian production and marketing networks involving many small and medium enterprises is most commendable. Industry: A significant area to watch is the development of labor-intensive industries and increasingly also high-tech production facilities. Their intermediate goods are capturing increasing markets in developed countries. Asia is becoming a huge industrial estate with the participation of a large number of international MNC’s (multi-national companies). “ASIAN ARCHITECTURE” At present it is understandable that it is not as yet clear how the economic architecture will evolve in East Asia and in the larger Asia-Pacific region. In the area of trade one will note that there is at present an enormous amount of FTA (foreign trade agreements), among others, the ASEAN-China FTA, ASEAN- Korea, ASEAN-Australia-New Zealand, and ASEAN-India FTA. There are in addition agreements signed with Russia, Canada, US and Pakistan. Individual ASEAN coun-

APEC Russian Federation

EAS

United States Mexico Peru

Thailand

Chile

Malaysia Singapore

ASEAN+3

Brunei Darussalam

Taipei, China Hong Kong, China

Indonesia

Japan

Vietnam

People’s Republic of China

Republic of Korea

Australia New Zealand

Mongolia Kazakhstan Uzbekistan

(Central Asia Regional Economic Cooperation) CAREC

Azerbaijan

FSM Marshall Is. Kiribati

Pakistan

Afghanistan

Kyrgyz Republic Tajikistan

Palau

Papua New Guinea

India

SAARC (South Asian Association for Regional Cooperation)

Maldives

Nepal

Sri Lanka

Source: Emerging Asian Regionalism, A Partnership for Shared Prosperity

Bangladesh

Nauru Tuvalu Niue Tonga Samoa Cook Is.

(Pacific Islands Forum) PIF Vanuatu

Bhutan

US

Japan

-(4)

Philippines

Lao PDR

14,265

18,142 4,924

Canada

Myanmar

ROK

EU

ASEM (Asia-Europe Meeting)

ASEAN

947

1,139

2

figure 2: Economic architecture of regional and trans-regional forum

Europian Union (27 member countries)

1,210

Solomon Is. Fiji Is.

tries have also undertaken cooperation agreements with individual countries. ADB claimed that as of December 2007, 44 agreements had been signed; 90 more are under study or negotiation involving many countries in integrating Asia.

There are strong indications that the area of trade of goods and services, manufacturing and the development of regional production and distribution networks will grow at a rapid pace. They will form significant segments in Asia’s economic archi-

tecture. Regional and Trans-regional Forum The following graph of the ASEAN Secretariat indicates the positions of the various forums involving ASEAN (Figure 2).

• ASEAN is being placed at center stage. ASEAN with ten member countries expects that it would remain in the driver’s seat in the development of the East Asian economic architecture. • ASEAN+3 comprise of the ASEAN 10 countries plus China, Japan and the Republic of Korea. They are the core group in the region’s policy-making and the engines of growth for East Asia. • EAS (East Asia Summit) is the largest high-level grouping consisting of ASEAN+3 plus India, Australia and New Zealand. Russia and the USA are added to the EAS. It is expected that these forums will be the initiators or designers of the Asian economic infrastructure. The design of Asia’s architecture, however, is still in the making. It is an on-going and never-ending process. New developments are continuously popping up in Asia. The current inclusion of two big powers, Russia and the USA, in the East Asia Summit will further expand Asia’s scope for dialogue, cooperation and integration in Asia and the Asia-Pacific region. The writer is former ambassador to the EU.

The President Post

A6 December 12, 2010

www.thepresidentpost.com

ASEAN ASEAN ECONOMIC OVERVIEW:

The AEC (Asean Economic Community) 2015 By Atmono Suryo

A SINGLE INTEGRATED COMMUNITY ccording to the media, at a meeting of ASEAN ministers of finance in Kuala Lumpur recently, ASEAN Secretary General Surin Pitsuwan came up with a firm statement addressed to ASEAN. It was not just an ordinary statement but more like a strong appeal to ASEAN to act more decisively in the area of integration. It concerns in particular the AEC (ASEAN Economic Community), one of the three important pillars of the ASEAN Community, to be implemented by 2015. The three pillars are: Political-security, Economy and Social Cultural. Not much is known by the general public in Indonesia about these highly important schemes. On this score the Secretary Generally firmly appeals that ASEAN expedite the implementation of the ASEAN Economic Community (AEC). He even mentioned of the risk that AEC may not come into being at all.

of economic growth. Consumption combined with a rather cheap supply of consumer goods have become important engines of growth. This is being seen in countries like China, India but in a way also Indonesia (Figure 1).

A

All three Asian countries have until 2008 achieved high economic growth even compared to countries in developed as well as developing countries. Not only in terms of population but also in terms of GDP, ASEAN is rated as a large economic entity. It is important to realize that ASEAN (as one combined regional entity) is already the 5th largest economy in the world, right after EU ($16,447), US ($14,256), Japan ($5,068), China ($4,909) and ASEAN ($1,499). This gives ASEAN strength and leverage in global economic diplomacy. In the area of Global FDI (foreign direct investment), developed countries still take up the largest share in 2008. But among emerging countries, China (6,4%) and Russia (4,1%) are the top destinations of FDI. followed closely by ASEAN (3.5%), Brazil (2.7%) and India (2.5%). The emerging countries, including ASEAN, should make joint efforts to increase their share in the flow of FDI and not only in the area of ortfolio investments. The ASEAN Economic Community concept came into being three years ago in January 2007 at the 12th ASEAN Summit. In this globalized world it would be difficult for ASEAN countries to act alone (not even for Indonesia as the largest country in ASEAN). The only way would be to foster joint production, joint ventures and to develop production networks. Presently, this is already being done although at a rather smaller scale. ASEAN is being warned by many international observers that the world is becoming very competitive. ASEAN should make special efforts to become one of the main economic players in the world arena. In Asia, China and India with their phenomenal growth are already becoming the big players of international trade.

The main issue behind this possible risk is most likely the question of ASEAN integration, which is politically highly sensitive as it involves the question of sovereignty. It can become a nasty and controversial political issue, particularly in countries such as Indonesia that has strong nationalistic principles and motivations. Hence, the pertinent question is whether all the countries in ASEAN are genuinely prepared to become a single integrated community in the three areas which form the three pillars of the ASEAN community. The basic objective of the ASEAN Community is to achieve peace, security, economic growth and social progress. AEC–ASEAN ECONOMIC COMMUNITY In the area of economics, AEC calls for the free flow of goods, services, capital and skilled labor by 2015, extending over the ASEAN region that encompasses ten South-East Asian countries. It should be noted that as a combined region of ten countries, ASEAN is economically large but is little known and appreciated by the general public, especially the political elite. In terms of statistics ASEAN covers an enormously large population of some half a billion people—a potentially rich market with a large middle class population with increasing purchasing power. In today’s economic thinking large markets are becoming a highly important factor

ASEAN is doing quite well in the area of global trade. But IntraASEAN trade is not large enough as shown by the statistics (Figure 2). It must grow much faster to strengthen ASEAN’S economy. ASEAN cannot only depend on trade with far-away and Western countries. After all, East Asia, including ASEAN, are moving to become the epicenter of the global economy.

• The ASEAN Economic Community (AEC) aims to develop a single market and production base characterized by free flow of goods, services, investment and capital as well as skilled labor. • AEC also aims to develop a competitive region, characterized among others by the development of infrastructure throughout the whole ASEAN region, easier access to loans and credits, e-commerce, the right taxation and competition policies and others. These integration measures are meant to make ASEAN to become another Asian power bloc. It took the European Union a very long time (many decades) to come at the present integration stage. Undoubtedly, countries in ASEAN will also face considerable difficulties to make the necessary preparations and adjustments. The greatest stumbling block and risks facing the ASEAN Economic Community concept would most probably come from the political corners. Many politicians are easily inclined to reject moves which would involve the loss of the country’s sovereignty. They are not aware that in this era of globalization and regionalism, countries have to make sacrifices, including in the area of sovereignty. This trend is already going on in a huge scale. Of course, there is still room for some adjustment or corrections. But to my mind it would be a grave mistake if ASEAN retreats from the basic concept of developing the ASEAN Community, including the ASEAN Economic Community as one of the pillars. They are an important binding force to keep ASEAN in good shape. Aside from China, Japan and India, ASEAN should become another powerhouse in the East Asian economy. It is urgent for Indonesia to continue to sponsor and to make the necessary internal preparations during the coming four years. As Indonesia would be in the chair in 2011 one of the top priorities should be: to strengthen the ASEAN combined economy and to foster growth, security and prosperity in the entire ASEAN region. It should be emphasized that a strong, unified and prosperous ASEAN would support and strengthen Indonesia’s position in the global political and economic arena. The writer is former ambassador to the EU.

Figure 2: Trend of Intra-ASEAN Trade and ASEAN Total Trade, 1993-2009 1,800,000 1,600,000

US$ million

1,400,000

Total Trade

1,200,000 1,000,000 800,000 600,000 400,000 Intra-ASEAN Trade

200,000 0 1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Main Elements of AEC

figure 3: Main Elements of AEC

ASEAN ECONOMIC COMMUNITY Strategic Schedule SINGLE MARKET & PRODUCTION BASE

COMPETITIVE ECONOMIC REGION

EQUITABLE ECONOMIC DEVELOPMENT

INTEGRATION INTO THE GLOBAL ECONOMY

Free flow of goods

Competition policy

SME deveopment

Coherent Approach towards External Economic Relations

Free flow of services

Consumer Protection

Initiative for ASEAN Integration (IAI)

Free flow of investment

Intellectual Property Rights

Free flow of capital

Infrastructure development

Free flow of skilled labor

Taxation

Priority Integration Sectors

e-Commerce

Food, Agriculture and Forestry Human Resource Development

Research and Development

Enhanced participation in global supply networks

2009

FIGURE 1: ASEAN IN THE GLOBAL ECONOMY 2009 (GDP US$ billion)

4,909 1,236

833

China

MYANMAR

ROK

5,068 Japan

India

LAOS

THAILAND

VIETNAM

CAMBODIA

PHILIPPINES

BRUNEI

14,256

MALAYSIA

US

1,499

ASEAN

SINGAPORE INDONESIA

16,447 EU

1,114

AUS & NZ Source: ASEAN Finance and Macroeconomic Surveillance Database and IMF

The President Post

A8 December 12, 2010

www.thepresidentpost.com

Education Photo: The President Post/Nandi Nanti

New Chairman at President University Foundation:

Prof. Dr. Juwono Sudarsono By Jhanghiz Syahrivar/Jeannifer Filly Sumayku

Former Minister of Defense and Security in the first cabinet of President Susilo Bambang Yudhoyono (2004-2009), Prof. Dr. Juwono Sudarsono, has been appointed the new chairman of President University Foundation.

P

rof. Dr. Juwono is one of the founders of President University Foundation that was set up on September 1997 by Setyono Djuandi Darmono, President Director of PT Jababeka Tbk., and Prof. Donald W. Watts, who was at the time Presi-

dent of Bond University, Queensland, and Vice Chancellor of Curtin University. The inauguration will be held in conjunction with the celebration of President University’s 8th anniversary, which will be held at Hotel Indonesia Kempinski on December 15,, and will be attended by President Susilo Bambang Yudhoyono. In the early days of President University, SBY contributed constructive thoughts for the development of the university. At the press conference, Prof. Juwono stated that the rise of Asian economies like Japan, South Korea, China and India are due to their leaders’ decision to establish world class universities. “10% of those countries’ workforce transformed themselves from agriculture-based to science and technology-based. Their economic structures changed from secondary industry research-

based into economies based on research, technology science and services. Key is innovation, application and commercialization through partnerships with private companies,” said Prof. Juwono. Juwono recommends that the government commits itself to the idea of selecting and funding 10 public and private universities to become the world-class universities. “Today’s education pattern is extensive as it combines discipline and skills with cultural insights, as well as innovative and creative by taking advantage of cultural diversity,” he concluded. The press conference was attended by Director General of Higher Education Joko Santoso, Rector of President University Ermaya Suradinata, Founder of President University Foundation S.D. Darmono and PU students. The internal event of inaugu-

ration was held at President University Main Campus, Cikarang, with the theme of “Meet and Greet”. It was attended by all top management members of President University, faculty members, staff members. Also on hand was former Minister of Research and Technology in Abdurrahman “Gus Dur” Wahid’s cabinet (1999-2001), Dr. Muhammad AS Hikam, APU, who joined the university in 2009 as Vice Rector IV in charge of research and public relations activities. The event was opened by a welcoming speech by Syonanto Wijaya, the secretary of President University Foundation, who welcomed Prof. Juwono to the top management of the university. Syonanto said he is confident that Juwono would be able to provide a new atmosphere and to help attain the big vision of the University to become a world-class university that produces leaders in

their respective fields and communities. The University, which uses English as its primary language, is renowned for being the most active local private university that recruits overseas students to study in Indonesia as well as building collaborations with top foreign universities, industries, and local governments since 2001. It is no small wonder that as many as 93 percent of its graduates have been successfully absorbed by both state-owned and private enterprises. The remaining continues to pursue higher education either in their respective home country or overseas. This is due to the language of instruction and curriculum taught in the university, allowing students to be more focused and joboriented. On the same occasion, Prof. Juwono shared with the audience his personal reasons for serving as Chairman of the President

Prof. Dr. Juwono Sudarsono

University Foundation. He explained that President University, which is located in the heart of the much-acclaimed largest industrial area in Southwast Asia, Jababeka, and has 1.500 industries from 32 countries operating there, supports learning processes and various researches in a very strategic manner. The event came to a close with

a symbolic handover of the position marked by the university’s rector embedding a President University’s on Prof. Dr. Juwono Sudarsono. Jhanghiz Syahrivar is a Senior Education Consultant and an Assistant to the Lecturer of the Faculty of Economics, President University.

A Discourse on Education By Walter Tonetto

“Education, civic responsibility, and the fully rounded life”

E

ducation is the most important formative activity that a society will undertake; it is continuous, starting from the moment of conception, when the impulse of life begins to stir. What is most natural, however, is not necessarily liked; most of us rightly recoil at the mere mention of the word. We will ponder in a moment why that is so. Once the baby has been severed from the mother’s umbilical cord and plummets into a strange world, it immediately begins its gradual socialization (or enculturation), the acquisition of a vast number of conditioned reflexes and habits that will later define its presence and status in a specific cultural context.

The need for this conditioning has allowed most of us, most of the time, to seek to usurp and define what it is that other newcomers to our society, or our world, have to do in order to win our affection. We forget that this imposition beyond the most basic of conditioning models that serve effective interrelationships is nothing short of being a form of violence. Indeed, maturity is defined by a growing inner independence of the coerced forms of guidance from without; it is a calibration with inner models and vistas, based on a unique universe of feelings and an understanding of how outer forms and energies relate to that. The relationship is usually bipolar: cravings and aversions. Our inner guidance system, the feelings, alternates painfully between the things we want and the things we do not want,

beholden to the pleasure principle. Characteristically, those who most want to control others understand that this happens most effectively (and perniciously) via feelings. So what do they do? They will try to suggest that one should not trust one’s feelings, and that the good life is simply an adherence to rites and rituals decreed by this or that priestly class or higher authority. Stay tuned, because some elements of the instruction may change over time, in accord with political and other materialist reorientations of these authorities. In this scheme, the individual is merely a pawn in a game played by others.

states of mind. Thus, the premise that we “distrust” our feelings is a form of spell-casting, a devious attempt to obtain subservience and control. One of the finest educators was the great writer, naturalist and philosopher Rudolf Steiner; many schools around the world, as much as the Waldorf schools, are named after him. In a series of lectures he gave in 1911 on the occasion of the founding of the Waldorf School in Stuttgart, Steiner was at pains to point out the importance for us not to miss the rites-de-passage of the growing adult and that we find a way of honoring the transitions from one stage of growth to another. Modern schooling, the general discontent, resistances, violence and other forms of unruliness stem in large measure from this

Here is the problem, of course. Once you make a disconnect with feelings, the individual is under a spell that may induce schizoid

The President Post

total neglect to honor these phases, and to make timely assistance available. The fact that we live in a rationalistic culture, where only the products of the intellect are honored in the process of schooling, is the reason for the neglect of forging connectivities to the inner demands of the learner. But since our educational systems are so fully domiciled in the head, we simply don’t see what is missing from the equation. Steiner pointed out the unease many so-called educated people feel when they move through a factory-floor. That “unease” (or “dis-ease”, if it happens frequently enough) owes of course to a disconnect in the understanding of what is happening on the ground, and an inability or reluctance to bridge that deficiency by assuming a position of genuine curiosity and humility. Do we know, he asks, how a

steam engine moves along? If we don’t have some idea, there is a disconnect that causes unease. In 2007, His Holiness, the Dalai Lam, gave a one-hour lecture at Washington University as part of the conferral of an Honorary Doctorate on him. The Dalai Lama stressed that our educational institutions, while very good in training the brain, have neglected the development of the inner life, a role which, during the Middle Ages, when Western society was non-secular, belonged to the Churches. But with the increasing secularization and globalization of society, the role of placing inner touchstones of answerability has begun to atrophy, and yet nothing has filled the breach. In order for our society to develop the civic virtues of peacefulness and happiness,

The President Post

SAVE

6 Issues

Rp. 120,000

-

12 Issues

Rp. 216,000

10%

18 Issues

Rp. 306,000

15%

24 Issues

Rp. 384,000

20%

OFFICE Menara Batavia 25th Fl. Jl. K.H. Mas Mansyur Kav. 126 Jakarta 10220, Indonesia Phone : (021) 572 7337 Fax : (021) 572 7338 Email : [email protected] Web : www.thepresidentpost.com

PERSONAL INFORMATION Name

Mr

Mrs

Ms

Renew Address

Home

Office Postal Code

Date of Birth Position

Phone

Jabodetabek

The President Post

The writer can be reached at [email protected]

Menara Batavia 25th Floor Jl. K.H. Mas Mansyur Kav. 126 Jakarta 10220, Indonesia Phone: +62 21 572 7337 Fax.: +62 21 572 7338 Email: [email protected]

Company

YES! I WOULD LIKE TO SUBSCRIBE

Any educational institution, from primary to tertiary level and beyond, that deserves our recognition needs to spend more efforts on developing what the Germans call “Geisteswissenschaften”, which poorly translates into Humanities. “Geist” is spirit: all great educators, from Friedrich Froebel to Pestalozzi and Rudolf Steiner, recognize the incalculably important role of a proper curriculum of the Geisteswissenschaften in bringing the inner life into accord with worldy aspirations and a full, rounded life on earth.

The President Post - Circulation Departments

THE SPIRIT OF INDONESIA

SUBSCRIBE NOW

an “inner disarmament” needs to occur, but the sensitivities for that disarmament must come from a peaceful mind, from an ordered inner life.

Mobile Fax

Email

What other business newspaper do you read?

PAYMENT METHODS Please start my subscription from

PUBLISHED BY PT Sarana Pratama Pengembangan Kota CEO & EDITOR IN CHIEF Ali Basyah Suryo CONTRIBUTORS Atmono Suryo Cyrillus Harinowo Hadiwerdoyo Thomas W. Shreve Jeannifer Filly Sumayku Eka Putri

PLEASE FAX THIS FORM AND PAYMENT RECEIPT TO +62 21 572 7338 FOR MORE INFO PLEASE CALL +62 21 572 7337

EDITORIAL & CIRCULATION DEPARTMENT Srimay Noviani LAYOUT & DESIGN Mohamad Akmal SALES & MARKETING Detia Rais PHOTOGRAPHER Nandi Nanti

Please transfer to: Bank OCBC NISP Capitol Cikarang Branch 101.010.00016.5 Account Name PT. Sarana Pratama Pengembangan Kota

Business

The President Post

www.thepresidentpost.com

Display until January 12, 2011 /// N0. 19

Garuda’s Debts Fall to $477 m

BUSINESS BRIEFS Daihatsu raises production to 330,000 units Automaker PT Astra Daihatsu Motor (ADM) plans to increase its annual production capacity to up to 330 thousand units next year in anticipation of robust growth of the domestic car market. “In the first quarter of next year we will install (equipment) to increase our production capacity to up to 330 thousand per year,” PT ADM Vice President Director Sudirman MR said here on Wednesday. The project would cost the company Rp150 billion, he said. In the middle of this year Daihatsu also raised its production capacity to 230 thousand units from 211 thousand units previously at a cost of Rp360 billion, he said.

ADHI taps Rp214.955b flyover project Adhi Karya (ADHI) clinched a new contract deal worth Rp214.955 billion from Jakarta Public Works Agency to develop a non-toll flyover project which spans from Kampung Melayu to Tanah Abang. ADHI Corporate Secretary Kurnadi Gularso said the contract will be executed in 630 days, which includes box girder, pier, pile cap and more. The project is located in Jalan DR. Satrio, with initial work on development of non-toll flyover from Sudirman to Casablanca, Satrio package (multiyear).

Riau Airlines gets Rp15 billion capital injection Riau Airlines has been allocated a capital injection of Rp15 billion from the Riau regional budget for 2011, a provincial councilor said. “Of the Rp70 billion of funds allocated through the regional budget for a number of regional government-owned firms (BUMD), Riau Airlines gets Rp15 billion,” Chairman of Riau`s Regional Legislative Assembly (DPRD) Djohar Firdaus, said here on Friday. Up to the end of December 2009, the Riau regional government controlled 50.6 percent of the Riau Airlines, or it has invested a capital worth Rp67.2 billion with the company.

B Foto: www.daylife.com

The national flag carrier is expected to sell 30 percent of its shares through an initial public offering (IPO) in the first quarter of next year.

G

aruda Indonesia has said its debts fell to US$447 million as per September 2010 from US$726 million as per June 2009 as a result of debt restructuring program. “We managed to restructure our debts particularly those to the European Credit Agency (ECA),” Garuda Indonesia Information Technology Director Elisa Lumban Toruan said following a general meeting of Garuda shareholders at the State Enterprises Ministry here last month. Elisa said the debts consisted of US$300 million debts to the ECA and US$131 million floating rates notes (FRN) to creditors based in Singapore. The national flag carrier is expected to sell 30 percent of its shares through an initial public offering (IPO) in the first quarter of next year. “The debt restructuring is one of the prerequisites for the IPO,” he said.

Garuda aims to raise US$300 million to US$400 million in funds through the IPO. Garuda Indonesia joins Skyteam The airline last month joined the SkyTeam global alliance of airlines on to expand its market and service to customers. “This is part of transformation. This will strengthen Garuda`s position in the market,” the company`s president director Emirsyah Satar said to newsmen after signing the agreement document for the state-owned company to join the SkyTeam here. SkyTeam is an alliance for interliner flight cooperation to fly passengers to all destinations served by alliance members. The alliance now has 13 airlines as its members namely Aeroflot, Aeromexico, Air Europa, Air France, Alitalia, China Southers, Czech Airlines, Delta Airlines, Kenya Airways, KLM, Korean Air, TAROM and Vietnam Airlines. “Garuda`s participation in SkyTeam with its vast network in Indonesia, the region, Australia and Asia would strengthen SkyTeam`s presence in Southeast

Garuda Indonesia at present serves 28 domestic routes and 18 international routes with bases in Jakarta and Denpasar. Asia,” he said. SkyTeam chairman Leo van Wijk said “the impact on the airline company`s financial performance would possibly be around 10 percent besides efficiency and ease for passengers.” SkyTeam managing director Marie-Joseph Male said Jakarta would be a new alternative route

from and to Asia. “Garuda`s plan to expand its intercontinental network to Frankfurt, Paris, London and Rome would attract passengers from business community or international tourists,” she said. “This year 53 million passengers are estimated to be covered by the industry while in the next four years the number could reach 90 million,” he said.

Garuda Indonesia at present serves 28 domestic routes and 18 international routes with bases in Jakarta and Denpasar. Garuda Indonesia received an IOSA Certificate in May 2008 as proof that its flight security system has met the international standard set by the International Air Transport Association.

The President Post

B2 December 12, 2010

www.thepresidentpost.com

Business Freeport to buy part of Urumka power plant’s ouput PT Freeport Indonesia has expressed interest in using electricity generated by the newly built Urumka hydropower plant in Mimika Barat district in Papua, an official has said. Moses Mel Mambesy, secretary of Papua province`s mines and energy office, said last month that Freeport had expressed interest in buying 220 megawatt of the power generated by the Urumka power plant which will be commissioned in 2015. Mambesy added that the total installed capacity of the new power plant would be 336 megawatt. The rest of the electricity so produced will be bought by a cement plant (20 megawatt) and the rest was public consumption in three districts, Mimika, Deiyai and Paniai. Mambesy said from the electricity sale to Freeport the province would get an annual revenue of Rp 2.0 trillion.

PLN removes UJL: PT PLN is set to remove the Uang Jaminan Langganan (UJL) (customers deposits) for new electricity installations. The ruling will be applied in 2011. Photo: The President Post/Nandi Nanti

Dirgantara Indonesia Seeks US$80 million to Develop Business The company had obtained new contracts to build planes and plane components worth Rp1.7 trillion this year.

S

tate-owned aircraft maker PT Dirgantara Indonesia (DI) needs US$ 80 million to develop its business and build new planes, a company executive said. Dita Ardonni Jafri, PT DI`s corporate secretary, said last month the company was hoping to earn fresh funds through the sale of 20 N219 planes to region-

al administrations. “We have approached some regional administrations to sell them N219 planes. The money from the sales will be used to finance our next projects,” Dita said, adding that N219 planes were priced US$4 million each. He said regional governments could buy the planes under an installment system with the assistance of foreign investors. In fact, regional governments are allowed to use the planes for commercial purposes. He said PT DI had been promoting its N219 aircraft to local governments such as Manado, Mataram, Ambon and Manokwari. However, the effort had yet to yield positive results. Compli-

cated bureaucratic procedures and political barriers were hampering the plane`s sales, he said. Dita said PT DI was planning to recruit more employees if the sales project was successful. “PT DI needs a personnel regeneration because 50 percent of our present employees are about to reach retirement age,” he said. Earlier, PT DI President Director Budi Santoso stated PT DI had posted a profit of Rp117.08 billion in 2009 after losing Rp84.34 billion in 2008. Budi said the net profit came following a hike in sales reaching Rp771.63 billion in 2009. “We hope this year`s sales will exceed Rp1.293 trillion,” he said. For 2010 the aircraft manufac-

turer had allocated Rp225.11 billion for capital expenditure, up from Rp7.3 billion in 2009. Its operating expenditure meanwhile had been set to reach Rp1.63 trillion up from Rp889.7 billion the year before. The company had obtained new contracts to build planes and plane components worth Rp1.7 trillion this year. He said Rp1.5 trillion of the contracts was carry-over from last year`s operations. “Last year PT DI won a contract to build three CN 235-220 patrol aircraft for the navy,” he said. In all, he said, total sales in 2010 were projected to reach Rp1.29 trillion, up from Rp771 billion last year.

“

PT DI had posted a profit of Rp117.08 billion in 2009 after losing Rp84.34 billion in 2008. Budi Santoso President Director PT. Dirgantara Indonesia

Pertamina Postpones Issuance of Global Bonds to 2011 To issue the global bonds, the company also had to look at market conditions. State oil and gas company Pertamina is likely to issue global bonds worth US$1.5 billion next year instead of in the fourth quarter of 2010 as originally planned, its finance director said.

“It (the plan) is likely to be implemented next year,” M Afdal Bahaudi said at the State Enterprises Ministry building here early this month. He said the company was in the process of making preparations for the issuance of the global bonds. “Preparations for a due diligence and legal arrangements are still underway,” he said. To issue the global bonds, the company also had to look at mar-

ket conditions. He said, “Market conditions are always dynamic. We will issue the bonds when everything looks good.” “We have yet to determine the total value of the bonds to be issued. But we will stick to the company`s long-term plan (RJPP) and business plan (RKAP),” he said. Pertamina had earlier said the results of an audit of its 2009 financial statement would serve as

the basis for the issuance of the global bonds. The company plans to use the proceeds from the issuance of the global bonds to cover its capital expenditure. For 2010, Pertamina had allocated up to Rp39 trillion for capital expenditure, a 56.4 percent increase from Rp22 trillion over the year before. Nearly 60 percent of its capital expenditure would be covered with internally generated funds

and the remaining 40 percent with funds from external sources, including bonds and bank loans. Afdal said Pertamina had appointed three securities companies as the underwriters of the bond issuance, namely Citigroup, HSBC, and Credit Suisse. “(The audit of) the 2009 financial statement will also serve as the basis to declare Pertamina as a non-listed company,” he said.

The new power plant, he said, would also be able to spur local economic activities as the availability of sufficient electrical power would encourage the growth of home industries, besides making the people`s life easier. Preparations for the construction of the new power plant are now underway, he said, and next year the detailed engineering and construction work would be started. The construction work is slated to be finalized in 2015. PT Freeport Indonesia markets its concentrates containing copper, gold and silver worldwide from its Grasberg mining complex at Mimika. It is one of the world`s largest single producers of both copper and gold, and controls the largest recoverable reserves of copper and the largest single gold reserve in the world. It began open-pit mining of the Grasberg ore body in 1990 and the operations are expected to continue until mid-2015, at which time the Grasberg underground mining operations are scheduled to begin.

Krakatau Steel’s exports to rise to 220,000 tons PT Krakatau Steel Tbk. expects its exports to increase by 15 to 20 percent to 220,000 metric tons in 2011 from the projected 180,000 to 190,000 metric tons this year, the company`s marketing director, Irvan K Hakim, said here this month. He said the volume of Krakatau Steel`s exports would remain 10 percent but its production would be increased so that it would automatically raise the volume of exports. He said the export hike was driven by an increase in the sales volume. Until the end of 2010, he said, the company`s steel sales are projected to be between 1.8 million tons and 1.9 million tons while in 2011 they are expected to rise to 2.2 million tons. “Production is rising after capacity rises again after the plant operates fully. Before the operation of two engines in the plant has been halted temporarily with regard to capacity upgrading,” he said. He said the hike in the volume of exports would affect positively on the company because the price of steel tends to continue to rise until 2011. The price of steel will rise from July to December 2010 by 12 percent compared to the same period last year, he said. According to data, the average price of steel in the July-December period of 2009 was recorded at US$500 per ton while the price of steel sheets around US$700 per ton. Until the end of 2010 the price is expected to even reach US$780 per ton.

Pawnshop firm targets Rp1 trln net profit The head office of state-owned pawnshop company Perum Pegadaian has targeted to gain Rp1 trillion net profit from credits it provided for small enterprises (UMKM) in 2010 worth Rp86 trillion, its spokesman said. “UMKMs badly need cheap funds from Perum Pegadaian to develop their business or to open new promising ones,” Perum Pagadaian Spokesman Irianto said here last month. He said that his company was optimistic it would be able to channel credits based on the targeted amount. Perum Pegadaian has up to October this year channeled Rp60 trillion. Perum Pegadaian has increased the number of its outlets to 6,000 units in order to increase its services to customers.

The President Post

www.thepresidentpost.com

December 12, 2010 B3

Investment INVESTMENT BRIEFS Bank Mandiri makes available Rp 30 Trillion for palm oil investment Bank Mandiri has disbursed Rp30 trillion worth of loans for the palm oil plantation sector during the period ending in October this year. The funds is a 35 percent growth from the same allocation last year. Rafjon Yahya, Bank Mandiri’s Agro-Based executive vice-president, said Bank Mandiri believes that palm oil has better prospects compared to similar vegetable oils. In addition, palm oil can also be used for fuel. “We have been aware of the business characteristics of this sector for quite some time,” Rajon said yesterday. Bank Mandiri’s conviction is linked to the long history of palm oil plantation financing at four banks which later merged to become Bank Mandiri.

IHSG Downturn:

BKPM chief: Potential of India’s Investment is US$5 billion Gita Wirjawan, the Investment Coordinating Board (BKPM) chief, estimated that India’s potential investment can reach US$5 billion within the next three to five years. “I met with over 12 companies, most of whom have expressed their interest in investing in Indonesia,” Gita told Tempo recently. The sectors Indian investors were mostly interested in were coal mining, power generation, ports, trains, and bauxite smelters. Gita Wirjawan One particular sector, mining, is because one of the Indian companies was interested in building a smelter to process bauxite and produce aluminum. A delegate of BKPM officials and a number of businessmen recently went to India to study investment possibilities for Indonesia. In mid August last year, the free trade agreement between ASEAN and India was signed. Expectations were high that investment and trade between the two countries would be accelerated following the agreement.

Kertas Kraft Aceh Gets More Capital The state-owned enterprises’ revitalization committee has decided to increase the capital of PT Kertas Kraft Aceh in the amount of Rp 154,5 billion. There will also be an additional Rp 1,1 billion resulting from implementing a joint venture operation (KSO). The financial support is intended to rescue the pulp company. State-owned enterprises Minister Mustafa Abubakar said PT Perusahaan Pengelola Aset (Asset Management Company) is in charge of seeking KSO partners. “We hope to find them by March 2011,” he said in Jakarta yesterday.

A broker watches movements in the Indonesia Stock movement as the composite index, IHSG, fell last week by 38 points due to profit-taking action in the industry sector. Photo: The President Post/Nandi Nanti

Russian Investment in RI Projected to Reach US$7 billion

R

ussian investment in Indonesia may increase to five to seven billion US dollars in the years to come, Russian ambassador to Indonesia Alexander Ivanov said here last month. He said Russia`s total investment in Indonesia was at present recorded at more than US$1 billion. “Our investment value in Indonesia has the potential to increase to five to seven billion US dollars,” he said. He said investment cooperation between the two countries in the form of joint

ventures had been increasing from year to year and had even intensified after a recent global financial crisis. “We must always be optimistic to increase the two countries` cooperation,” he said. He said he would encourage more Russian businessmen to come to Indonesia and conduct partnership with local businessmen. “For us Indonesia is a giant and emerging market which is just growing,” he said. Russia and Indonesia have had diplomatic relations for 60 years. The two countries are members of the G20, the Asia Pacific Economic Forum (APEC).

Integrated oil and gas services company PT Elnusa Tbk has sold its 100-percent stake in its subsidiary Elnusa Bangkanai Energy Ltd (EBE) to Salamander Energy Group Ltd for US$11.2 million. Although Elnusa had divested a 100 percent stake and operatorship in EBE, it still held 11 percent working interest in the Bangkanai field which gave it easy access to provide integrated upstream oil and gas services to the field, he said. He said Elnusa obtained the 11 percent working interest in the Bangkanai field through affiliate company Chariot International Ltd. EBE currently held 80 percent working interest in the Bangkanai oil and gas field in Central Kalimantan, he said.

In meeting the wish of the Russian investor, Oleg Gorbulin was received by Deputy Regent HA Asli Mustadjab and other relevant government officials at the site of the project at the Pajukukang Industral Estate. At the location, Oleg Gorbulin asked about electricity and water supply, as well as other support facilities. With regard to raw materials, the Russian investor said that if the seawood production in Bantaeng was not enough to meet the needs of the industry, he will seek more from nearby areas. He said seaweed will be produced into various food stuffs

and cosmetic material. “Russian seaweed consumption is very high, not only as foodstuff, but also as material for production into cosmetics,” he said. Industries in Russia had been using CPO, and therefore are trying to switch to seaweed as long as production capacity is favorable, he said. In the first visit, Bantaeng Regent HM Nurdin Abdullah explained about the potential of seaweed found along the 21-kilometer long coast. In the meantime, chairman of Asperli Arman Arfah said tahat South Sulawesi contributed 60 percent of the national seaweed production.

Govt Invites Investors from China to Develop Ports The Indonesian government is inviting Chinese investors to increase their investment in the shipbuilding and port sector in Indonesia, an official said. The Chinese investment in the sector would pave the way for the government plan to develop national connectivity and logistic system, Deputy for Industry and Trade Coordination to the Coordinating Minister for Economic Affairs Edy Putra

Irawady said at a seminar on the prospects for Indonesia-China relations here early this month. He said the government had prepared a blueprint for national logistic system covering the development of ports and shipbuilding businesses to create regional connectivity. China, which has more advanced technology in the shipbuilding and port sector, could participate in the development of port and shipbuilding industry in Indonesia, he said.

Chinese Investors Eye Investment in Textile Machinery

The Vice President of China Hi-tech Group Corporations, Maoxin Ye, is very enthusiastic about building a machine spare parts factory for the textile industry in Indonesia. “We are ready to transfer the technology and we are financially ready to

The plan to speed up the building of a seaweed industry in the regency 120 kilometers south of Makassar, came to fruition by a second visit this month. This time, CEO of the National Investment Agency Trifonovskaya of Moscow Oleg Gorbulin had asked for six hectares of land for use to build the factory, stor-

age facility, and equipment for mobilizing seaweed.

Mustafa Abubakar

Elnusa sells EBE stake to Salamander

Within the next five years, China’s investments are expected to include the production of textile machines and spinners, waving, and all kinds of industrial textile machines.

Russian investor builds seaweed industry in Bantaeng After noticing the potentials of seaweed in Bantaeng, South Sulawesi, when accompanying Indonesian ambassador to Russia Hamid Awaluddin on September 28, investors of the National Investment Agency of Moscow immediately started building an industry.

fund the project,” he said yesterday. However, Maoxin did not mention the amount of investment that will be carried out. He only hoped that the government will facilitate their plans, for instance by providing tax and import tax breaks. “We hope to be treated like an Indonesian company.” Ade Sudrajat, the Indonesian Textile Association Chairman, said the Chinese delegates along with nine representatives of their subsidiaries were here to conduct a survey. China’s investments have been rising, as evident in the opening of a service center in Semarang. Gradually, investments are expected to include the spare parts industry and the construction of

an assembling plant. The spare parts manufacturing investment is planned after four million units of China’s textile machines have been absorbed back home in China. When eight million units have been absorbed, then China will invest in machine assembling. If China invests in machine assembling, production of textile machines will no longer be intended to meet local demand. The machines will be exported to other developing countries that are also the main producers in the textile industry, like India and Pakistan. The change towards Chinese products because the quality of the machine and production is as good as that of Japan and Europe. Moreover, Chinese machines are

more energy-saving. Industry Minister M.S. Hidayat said that Chinese businessmen came in response to the results of recent meetings held by the government in Beijing last month. Within the next five years, China’s investments are expected to include the production of textile machines and spinners, waving, and all kinds of industrial textile machines. At present, textile machine imports for the restructure program have been 10 percent subsidized by the government. The subsidy will be increased to 15 percent if the machine manufacturers agree to build their plants in Indonesia.

Chairman of the Indonesian Chamber of Commerce and Industry (Kadin) Suryo Bambang Sulisto meanwhile said China was one of Indonesia`s potential partners to develop regional connectivity through the development of port and shipbuilding sector. “What is badly needed by the eastern parts of Indonesia is connectivity. The development of port and shipbuilding businesses will be the starting point for the development of the region,”

he said. He said the eastern parts of Indonesia covering Maluku, Papua, West Nusa Tenggara and East Nusa Tenggara offered bright prospects for port and shipbuilding businesses. “The government must encourage the development of businesses there,” he said. Chinese Ambassador to Indonesia Zhang Qiyue said although Chinese investors are newcomers in the development of infrastruc-

ture facilities in Indonesia, she would encourage them to expand their businesses in Indonesia. “Since the development of infrastructures is high on the list of the Indonesian government`s priorities, we will encourage Chinese investors to get involved in it. We will guide and support the Chinese companies to expand their investment not only in the energy and natural resources sector but also in other sectors such as services, agriculture, fisheries and telecommunications,” she said.

Lippo Group Explores Investment Possibilities in Maluku Some 100 students would also be given scholarships to continue their studies at institutes of higher earning. One of Indonesia`s conglomerates, Lippo Group, is exploring investment possibilities in various fields in Maluku, a provincial investment official said. The group`s vice president, James Riyadi, met Maluku Governor Karel Albert Ralahalu on early this month to obtain accurate information on investment possibilities in a number of strategic areas, including retail trade, hotels, eduction and health, Rahman Soumena, head of Maluku`s Capital Investment Coordinating Board

(BKPM), said. The Indonesian tycoon was also interested in establishing commercial centers such as department stores, hyper malls, a five-star hotel for both domestic and foreign tourists. James also asked about investment opportunities in the health sector because he would like to build an international standard health center with modern and sophisticated facilities that would also serve people from North Maluku, Papua, and West Papua. James also showed interest in developing the region`s human resources development by establishing an international standard school in the province. Soumena said the international standard school would be staffed with professional teachers from Jakarta.

Some 100 students would also be given scholarships to continue their studies at institutes of higher earning. “Governor Ralahalu promised to support Lippo Group`s investment plans and provide all the needed facilities,” Soumena said. He said James`s intention to invest in Maluku would be like a “stream of fresh air” for the province and hopefully encourages other investors to operate in the province. “James Riyadi`s effort to explore investment possibilities in Maluku in his capacity as a top executive of a national conglomerate is expected to make the business world in the province more attractive to both domestic and foreign investors,” Soumena said.

The President Post

B4 December 12, 2010

www.thepresidentpost.com

Markets A Closer Look at BI’s “Macro-Prudential” Measures By Helmi Arman

There was not much change in the tone of the policy statement. Despite rising inflation in November, which was mainly fooddriven, BI still sounded rather relaxed, citing that core inflation was still relatively stable.

20%. Generally, though, there was no new info that changes our forecast of a stable BI rate until Apr-11, followed by a cumulative 50bps rate hike in 2011. What was new in the statement is the reference to forthcoming macro-prudential measures concerning “capital inflows and banking sector resilience”. BI has some new policies on the drawing board, which probably could be put in place soon (i.e. early 2011 if not by year-end).

B

They include the possibility of adjusting statutory reserve requirements on foreign currency deposits and applying limitations on short-term foreign currency borrowing by banks (including Nostro accounts). Essentially, policymakers seem to be rolling back the loosening measures that were put in place in the wake of the 2008 financial crisis.

Some new data were unveiled, e.g. Nov-10 foreign reserves ($92.8bn, up by $1bn m-o-m) and Oct-10 year on year credit growth of nearly 22%, which was up slightly from September’s

SRR Impact on IDR/USD and Indon US$ bonds: Possibly Neutral As the crisis unfolded in 2008, reserve requirements were cut from 3 to 1 percent, injecting some $720m of liquidity into the system. Currently, as of Sep10 there are around Rp350tn (US$39bn) of foreign currency deposits held by commercial

ank Indonesia this month maintained the BI rate at 6.50%, in-line with consensus and our expectation. There was not much change in the tone of the policy statement. Despite rising inflation in November, which was mainly food-driven, BI still sounded rather relaxed, citing that core inflation was still relatively stable.

banks. This means a reserve requirement increase back to, say, 3 percent can absorb around $780mn into BI’s coffers. Essentially, this would reduce the foreign currency supply of onshore banks. However, we don’t expect any impact on the IDR/USD to be very significant, as spot market movements are known to be more correlated with foreign currency demand/ supply from non-residents. We also don’t see substantial prospects of a sell-off in the Indonesian US$ bond market, as a good portion of onshore dollar liquidity is said to be placed in Nostro accounts in overseas banks. And although no data is available, ownership of Indonesian bonds have been traditionally dominated by offshore instead of onshore investors. FX borrowing limitation impact to IDR/USD: Neutral to slightly negative This policy can be taken in the context of both banking sector prudence as well as capital inflow management. Back in 2008, limits on short-term foreign currency borrowing by banks (then 30% of capital) were scrapped amid tight dollar liquidity. This allowed banks to increase foreign borrowing in the offshore money

markets. Now that dollar liquidity conditions have normalized, putting back a limit on short- term foreign currency borrowing appears to be a pre-emptive measure to prevent imprudent practices, e.g. the possibility of banks excessively using call money to fund longer term loans. However, the limits can also help plug loopholes in current regulations regarding capital inflows. This is because vostro accounts (i.e. rupiah accounts of non-residents at onshore banks) are classified as a short-term foreign currency borrowing. Currently, non-residents are required to have an underlying asset to be able to purchase rupiahs. However, when the underlying asset matures—or when interest payments/dividends from the underlying asset is received—nonresidents can still keep the rupiah proceeds in its vostro account. This is a loophole which can be used by non-residents to effectively take positions on the rupiah (given that SBIs have become harder to get nowadays). If BI puts back a limit on shortterm foreign currency borrowing in general (or perhaps vostro accounts in particular), onshore banks would at some point have

Dec-10

Nov-10

Oct-10

Sep-10

Aug-10

Bank Indonesia Policy Rate

6.50

6.50

6.50

6.50

6.50

Headline CPI (% chg y-o-y)

n/a

6.33

5.67

5.80

6.44

Core CPI (% chg y-o-y)

n/a

4.31

4.19

4.02

4.24

Source: CEIC, Bank Indonesia

to require its non-resident counterparty to directly convert any investment-related proceeds into foreign currency. This is to prevent the bank from reaching the vostro account/short-term foreign borrowing limit. As of now we’re not sure yet how much the potential dollar buying from these vostro account outflows will be at implementation (as some banks are said to be already exceeding the possible 30% limit). However, BI will probably help balance the market supply of dollars once any new regulation takes effect. Therefore, our initial assessment on this policy is that it may have only a short-term negative impact for the local currency. Helmi Arman is an economist at Treasury & Capital Markets, PT Bank Danamon Indonesia,Tbk

Chart 1: CPI Inflation and BI Rate 18 % y-o-y, p.a. 16 14 12 10 8

Core Inflation

4

Headline Inflation

2

Nov-06

Nov-07

Nov-08

Nov-09

Nov-10

Source: CEIC, Danamon

Chart 2: IDR/USD spot rate 9500 9400 9300 9200 9100

IDR/USD

9000 8900 8800

He can be reached at [email protected]

BI Rate

6

25-Feb-10

Source: CEIC, Danamon

06-May-10

15-Jul-10

23-Sep-10

02-Dec-10

The President Post

www.thepresidentpost.com

December 12, 2010 B5

Finance MAHATHIR MOHAMAD:

Islamic Finance to Grow and Prevail over Western Model in South-East Asia By Jeannifer Filly Sumayku

Photo: www.reuters.com

The Islamic finance industry has been growing globally at a rate of 15 to 20 percent. Growth in ASEAN, according to some experts, is about 5 percentage points higher. Former Malaysian Prime Minister Dr Mahathir Mohamad has big expectations from how the industry is likely to shape up in the region.

H

e urged Muslims to expand Islamic finance so it could be as large as the Western banking industry. This can be done if more Muslims became businessmen and used Islamic banks for loans, he says. “Being unwilling to borrow large sums of money from the Western banking system had hindered the progress of Muslims. But now, with the founding of Islamic banks, Muslims can now borrow money in order to do business, but the borrowing is done in a slightly different way from the Western banking system,” Dr Mahathir said. “Now, ASEAN is a place that is growing. One has to remember that the total population of ASEAN is about half a billion. With

Islamic banks being available, there is capital which is now accessible to Muslims who do not want to be involved with interest.” ‘Whether Islamic banking prospers or not depends very much on the ability of the Muslims, firstly to do business, to understand business,” he added. He has big expectations the industry will flourish in South-east Asia, where half the population are Muslim. And it’s not just the Muslim communities in ASEAN that are tapping into the potential of Islamic finance. Industry players note that Middle Eastern investors are also increasingly looking at investments opportunities in this part of the world to deploy their capital. Southeast Asian economies cannot grow rapidly without en-

of Islamic finance. As you can see, Singapore and even Hong Kong slightly outside of ASEAN, are trying to be a hub for Islamic finance. “There is a move to try and attract more and more Middle Eastern funds into ASEAN to try and help with the issuance of companies’ sukuks and so forth. From that point of view, we are going to see ASEAN as one of the key players where Middle Eastern money is going to come in via the Singapore or Hong Kong route.” In 2008, Islamic finance accounted for roughly 1% of global banking assets - double the level in 2005.

Dr Mahathir Mohamad: Shariah-compliant lending can succeed where the West has failed. He said that the 2008 global financial crisis was sparked by excessive lending by western banks.

couraging entrepreneurship in more capital-intensive businesses, Dr Mahathir said, adding that countries such as Indonesia should work towards becoming less dependent on agriculture and mining and grow its manufacturing sector. And with its massive popula-

tion of almost 240 million - making up half of Southeast Asia’s population - Indonesia could easily lead the growth of Islamic finance, he noted. Assets of Islamic financial institutions increased five-fold to around US$1 trillion between

The new Maserati Quattroporte Sport GT S sets another milestone in terms of sportiness in the high performance luxury sedan segment. It offers sporty handling which further enhances the Quattroporte’s already optimal dynamic balance. It features the evolution of sporty automatic gear-shifting software, designed to win over committed and demanding drivers, seeking an exciting driving experience. It also equipped with the “Sport” button, makes it possible to deploy the full power of the engine and produce a deeply enveloping and throaty exhaust note. The Quattroporte Sport GT S’s engine has been developed to favor maximum power output. Main technical data: • Displacement: V8 4,691 cc • Power: 323 kW (433hp) @ 7,000 rpm • Torque: 490 Nm ( 361 lb/ft) @ 4,750 rpm • Max engine speed: 7,200 rpm

2003 and last year, according to credit watchdog Moody’s Investors Service. It estimates the full potential of the industry at US$5 trillion or more. Sani Hamid, Financial Alliance’s director of wealth management, said: “I think overall ASEAN is growing very fast in terms

Quattroporte Sport GT S is equipped with an automatic sixspeed transmission developed with sportiness of a new and specific gear-shifting strategy: the MC-Auto Shift mode, Manual Mode, and Manual Sport mode. • “MC AUTO SHIFT” mode: In order to optimize standing starts, the automatic gearbox offers the MC Start Strategy, which functions with the MSP off. The driver should press and hold the brake pedal, then start pressing the accelerator and releases the brake pedal only when the optimum revs are reached (between 23002500 rpm). This fast start strategy, recommended only for use on the race track and in a situation of complete safety, reduces the 0 to 100 Km/h (0-62 mph) time from 5.3 seconds to 5.1 seconds. • “MANUAL MODE”: In manual mode the gear-shift is directly controlled by the driver, allowing the engine to reach its top speed. • “MANUAL SPORT”/”AUTO SPORT” mode:

Separately, Dr Mahathir said that if Singapore requires information on growing its Islamic banking sector, it can seek help from Malaysia, which is a far bigger centre of Islamic finance. Singapore has been ramping up offerings in Islamic finance, and it will soon have a university here to train scholars on Shariah-compliant banking and investment. Speaking at an Islamic Finance Conference in Singapore, Dr Mahathir said that Shariah-compliant lending can succeed where the West has failed. He said that the 2008 global financial crisis

was sparked by excessive lending by western banks. “Islamic banks, in contrast, are constrained because every deal needs to be backed by a real asset under the principles of Shariah law,” he explained. “So if you make a comparison, the Islamic system is in many ways superior to the conventional banking system,” said Mahathir. “The conventional banking system is much more open to abuse than the Islamic banking system. So far, Islamic banks have not been involved in the present crisis except those perhaps who dabble in the money markets in the West. Islamic banking is almost immune to these kinds of crook deals,” explained Mahathir. Islamic banking fuses principles of Shariah and modern banking methods. Islamic funds are banned from investing in companies associated with tobacco, alcohol or gambling. Shariahbased finance also bans interest, which is seen as usury, and risks are shared between the creditor and borrower. “The conventional bank lends 30 times the amount of money that they have but Islamic banks, because they have to participate in taking the risk, will have to be much more careful,” Mahathir said.

When down-shifting, the throttle blip is matched with the SPORT-mode exhaust sound to facilitate maximum driving enjoyment. Exterior New 20” Multi Trident Silver wheels are fitted as standard, together with red brake calipers and Dual Cast technology brakes. The exterior body color range includes all 19 colors available for the Quattroporte and the Quattroporte S. Interior The sporty look of the interior features new M-design seats with perforated Alcantara® and leather upholstery. The interior configuration range features 10 leather colors (Avorio, Sabbia, Cuoio, Marrone Corniola, Grigio Ghiaccio, Grigio Medio, Blu Navy, Rosso Corallo, Bordeaux, Nero)

The President Post

B6 December 12, 2010

www.thepresidentpost.com

Leadership Charismatic Leadership By Dr. Karan Singh

Early Charismatic Leadership theory was influenced by Max Weber who used the term to express a form of influence that was based on follower perceptions that the leader is endowed with exceptional qualities.

T

he widely-held belief today is that however and in whatever which way Leadership is defined, it is imitable, replicable and learnable. Of the many styles or descriptions, Charismatic Leadership still holds a somewhat mythical status, and a deeper examination would take us closer to opening up its inner strands.

Early Charismatic Leadership theory was influenced by Max Weber who used the term to express a form of influence that was based on follower perceptions that the leader is endowed with exceptional qualities. Charisma, is a Greek word, means “divinely inspired gift”. Key elements of Weber’s theory included a Crisis in which there is the emergence of the Charis-

figure 1: Attribution Theory of Charismatic Leadership CHARISMATIC LEADER BEHAVIOUR

SUBORDINATE INFLUENCE PROCESS

Advocate Vision highly discrepant from status quo; still within latitude of acceptance

Personal Identification

Use of Visioning and Persuasive Appeals rather than Authority or Participative processes

Follower’s desire to please & imitate the leader

Most impressive who actually risks substantial personal loss in terms of status, money, position or membership of organization

Idolize leaders & want to become like them

Generate Trust – More in leader who seems motivated by concern for followers

Recognition of subordinate behaviour builds self-confidence and deeper sense of obligation to live up to the leader’s expectations in the future

Strategic insight, Strong Convictions, Self-confidence, Unconventional behaviour, Dynamic Energy

Desire for Leader approval primary source of approval; Also motivated by fear of disappointing Leader

Act in unconventional ways to achieve the vision & use innovative strategies that appear successful

Leader approval becomes a measure of the subordinate’s own self worth

Make self sacrifices, take personal risks, incur high costs to achieve vision they espouse

Sense of urgency from leader requires greater effort by subordinates to meet the high expectations

More likely to emerge when there is a crisis – in absence of which, CREATE DISSATISFACTION with current conditions and provide a vision of a more promising future

Confidence & Enthusiasm – can be contagious – which when working together can increase probability of success

Source: From Leadership in Organizations by Gary Yukl

matic Leader, who then proposes a Vision as a solution to the crisis. Some successes follow that make the vision seem attainable, and the followers come to perceive the leader as exceptional. Newer versions (“neo-charismatic” theories) emerged. While incorporating only some of Weber’s ideas, they departed in many respects, and the major one of note by Conger & Kanungo is known as the “Attribution Theory of Charismatic Leadership”, which is captured in Figure 1. While House’s Self-Concept Theory is similar in terms of Key traits and Behaviours, it does not emphasize Personal Identification, and recognizes Social Identification, Internalization and Augmentation of the Individual and Self-Efficacy as the most important sources of leader influence over followers. And nor does it identify a Crisis as a prerequisite for Charismatic Leadership. On the other hand and interestingly, Behling & McFillen as quoted in Philip Sadler’s book on Leadership assert that the only universally perceived condition necessary for the effective use of Charismatic Leadership is what they call Psychic Distress – the anxiety related to some kind of Crisis or Malaise affecting the organization. Some examples from political and business history tend to support both the requirement as well as non-requirement of a Crisis for

figure 2: Charismatic Leaders and their Visions

Steve Jobs

Charles Schwab

Herb Kelleher

Mary Kay Ash

Rupert Murdoch

Walt Disney

Apple Computer

Charles Schwab

Southwest Airlines

Mary Kay Cosmetics

News Corporation

Walt Disney Co.

To make computing simple and available to everyone

To provide high-quality financial services to people at reasonable prices

To provide excellent service and great value to the flying public

To enhance the selfesteem of women by building their financial independence while providing quality cosmetics

To provide wholesome, high quality entertainment to families throughout the world

To provide wholesome, high quality entertainment to families throughout the world

the emergence of Charismatic Leadership. Jerald Greenberg and Robert A. Baron in their book ‘Behaviour in Organizations’ cite some interesting examples. Calling Charismatic Leadership that “Something Special”, they take the case of Chrysler Corporation in the 1970s, which was written off as being terminal by many analysts. Lee Iacocca, the then CEO, refused to accept the verdict and launched a campaign to win government loan guarantees and paving the way for the company’s survival. He set a personal example of self sacrifice in taking only $1 as salary for one year during the crisis, and rallied tens of thousands of employees to newer levels of motivation and effort, and finally got the company back

on the road. While Lee Iacocca had received a Crisis, Napoleon may have created many a Crises, and Bill Gates launched Microsoft as an opportunity. Greenberg & Baron also give examples of some famous Charismatic Leaders and their Visions (Figure 2). While success and Charisma appear to be linked strongly, the Polarity in followers’ reactions seems to be a possible price to pay. While Roosevelt lifted the US out of the Great Depression, and Schwartzkopf led US troops to victory in 1991, John Kennedy and Yiztak Rabin fell victims to assassinations. While this may not be so extreme in the busi-

ness world, there are still practical implications for organizations as some writers have criticized the idea that Charismatic Leadership could be a panacea for problems and how it is risky, especially in large organizations where results are difficult to predict, and power may be misused, as in the case of Bordland International, the world’s largest database software provider when the company faced a financial crisis in the late 1980s. Though the CEO, Philippe R. Kahn, was helpful in turning things around, his “barbarian” approach to leadership only interfered with the company’s operations as it emerged from the crisis. While the quote, “Make or-

dinary people do extraordinary things in the face of adversity” by J. A. Conger may have been used for Charismatic Leadership, descriptive research has shown that charismatic leadership is not compulsory to bring about change in an organization and the same can be achieved through Transformational Leadership Processes, and not necessarily from the actions of a single person. In summary, my own belief tends to be in line with authors who equate Charismatic Leadership to Referent Power, or “Likeability”, as described by Robert Cialdini (Influence - Science & Practice), as a trait that can be developed while focusing on a solution or vision that others cannot easily see or propose and propel.

The President Post

www.thepresidentpost.com

December 12, 2010 B7

Technology Indefatigable Zeus and Fake Archives Set the Malware Tone for October Zeus has become one of the most commonly used and best-selling spy programs on the online black market due mainly to the ease with which the Trojans in the Zeus family can be configured to steal online data.

Image: www.technewsdaily.com

K

aspersky Lab announces the publication of its Monthly Malware Statistics for October 2010. Despite the recent arrests of criminal gang members linked to the ZeuS botnet, new malicious programs are still emerging that support its spread. Zeus has become one of the most commonly used and best-selling spy programs on the online black market due mainly to the ease with which the Trojans in the Zeus family can be configured to steal online data. Virus.Win32.Murofet, detected in early October, generates domain names that are later used to spread the ZeuS botnet. The links to downloadable and executable Zeus files are generated using the current date and time on the victim computer. The virus obtains the year, month, day and minute from the system, generates two double words, adds one of several popular domain zones, adds “/forum” to the end of the string and uses it as a link. “This piece of malware

demonstrates just how inventive and eager the Zeus developers are to spread their creation around the world,” stated Vyacheslav Zakorzhevsky, Senior Virus Analyst at Kaspersky Lab and author of the report. Another clear trend in October was the continuing growth in the popularity of fake archiving programs. These programs typically disguise themselves as popular freeware or tools to remove license protection from legal software. After a user launches a fake archiving program, they are asked to send an SMS to a premium number so they can access the contents of an archive. In most cases after a message is sent, the user receives instructions on how to use a torrent tracker and/ or a link to it. “There are a variety of hoax scenarios, but the result is always the same,” commented Vyacheslav Zakorzhevsky. The victim ends up spending money and does not get the file they wanted. This type of fraud is relatively new and only came to light a few months ago. It has attracted a lot of interest from cybercriminals ever since. More than a million attempted infections of this type have been detected each month by Kaspersky Lab since July 2010. Kaspersky Lab’s experts once again warn users to be more careful while surfing the net and refrain from visiting web resources

that look suspicious. Trojan.JS.FakeUpdate.bp, a script from the FakeUpdate family that commonly occurs on porn sites, is at the top of the ranking. When the user clicks on a video clip, a popup window appears saying a new media player has to be installed in order to watch the clip. The player also happens to contain a Trojan that modifies the ‘hosts’ file. This Trojan associates a number of popular sites with a local IP address and installs a local web server on the infected computer. After this, every time the user tries to access one of the sites, a page appears in the browser demanding that the user pay for viewing adult content. Kaspersky Lab delivers the world’s most immediate protection against IT security threats, including viruses, spyware, crimeware, hackers, phishing, and spam. Kaspersky Lab products provide superior detection rates and the industry’s fastest outbreak response time for home users, SMBs, large enterprises and the mobile computing environment. Kaspersky technology is also used worldwide inside the products and services of the industry’s leading IT security solution providers. Learn more at www.kaspersky.com or united communications. For the latest on antivirus, anti-spyware, anti-spam and other IT security issues and trends, visit www.viruslist.com.

Kaspersky Lab delivers the world’s most immediate protection against IT security threats, including viruses, spyware, crimeware, hackers, phishing, and spam.

JAKARTA INTERNATIONAL DEFENSE DIALOGUE (JIDD) 23 – 25 MARCH 2011 BALAI SIDANG JAKARTA CONVENTION CENTER INDONESIA

Hosted by:

Organized by:

Ministry of Defense Republic of Indonesia

IDU-Indonesian Defense University

FOR THE FIRST TIME IN JAKARTA THE MINISTRY OF DEFENSE, REPUBLIC OF INDONESIA WILL HOST OFFICIAL DEFENSE

DELEGATIONS FROM OVER 40 COUNTRIES TO MEET AND DISCUSS STRENGTHENING SECURITY AND STABILITY

JAKARTA, INDONESIA IS THE NEW CENTER FOR SECURITY AND DEFENSE DIALOGUE AND IMPLEMENTATION SUPPORTING SHOWCASE ALONGSIDE JIDD 2011

23-26 MARCH 2011 BALAI SIDANG JAKARTA CONVENTION CENTER JAKARTA INDONESIA

TO BOOK YOUR SPACE AND PARTICIPATE PLEASE CONTACT: APSDEX is the only comprehensive Asia-Pacific security and defense event dedicated to international government policies, agencies, military institutions, army and police forces in the region. Only at APSDEX will the highest level of decision makers be in attendance at one place at one time!

[email protected]

[email protected]

T: +62 21 576 4440

MEDIA SUPPORT

WWW.JIDD.ORG

WWW.APSDEX.COM

The President Post

B8 December 12, 2010

www.thepresidentpost.com

Executive Highlights Economics Coordinating Minister Hatta Rajasa announced that the government would ban cars manufactured in 2005 or later from purchasing subsidized fuel starting on 1 January 2011. He said motorcycles, public transport vehicles and fishermen would still be able to purchase subsidized gasoline and diesel fuel. The minister said the initiative aimed to reduce state revenues allocated to fuel subsidies next year, and was part of a multi-year program to eliminate government subsidies all together by 2014-2015. Critics say the plan will be difficult to implement because many gas stations still don’t have sufficient supplies of non-subsidized fuel and because the plan was prone to cheating. Automotive industry association Gaikindo, meanwhile, said it understood the steps taken by the government, but called on the administration to ensure the availability of non-subsidized fuels. Pertamina, which operates more than 8,000 gas stations across the country and controls 85% of the distribution market, said that it has boosted its supplies of non-subsidized fuels and has engaged in a public campaign to encourage car owners to use these fuels. Hatta said the program could save the government up to Rp10 trillion. The administration is allocating more than Rp95 trillion in fuel subsidies in its 2011 budget.

The Rupiah has been hovering around Rp8,950,-8,985 to the Dollar with signs of weakening as geopolitical tensions in Korea and renewed debt issues in Ireland and other parts of Europe weigh on investor sentiment. Bank Indonesia said as of the third week of November there was a net capital outflow totaling Rp1.1 trillion, largely from investment funds selling off some of their Indonesian treasury holdings. Rahmat Waluyanto, the finance ministry’s director general for debt management, said there was no indication of any sudden reversal of capital flows resulting from the negative sentiment. He asserted the decline in foreign holdings of Indonesian treasuries were part of the normal dynamics of the bond markets and did not reflect any change in the country’s economic fundamentals.

U.K. Listed Investment Vehicle Vallar has entered into a US$3 billion share swap deal with the Bakrie Group to acquire a 25% stake in Bumi Resources and a 75% stake in Berau Coal. Bumi is Indonesia’s largest coal producer, while Berau is its fifth largest. Under the agreement, the Bakrie Group will acquire a 43% interest in Vallar, but with voting rights capped at 29.9%. International financier Nathaniel Rothschild, who controls Vallar, stated that the deal would create a global mineral resources giant with a significant production base in Indonesia that will become the largest supplier of thermal coal to China. Bakrie Group representative Indra Bakrie said the deal would increase

its international profile, which should increase the group’s access to the global capital markets and provide a platform to build on the organic growth its mining assets already provide. Vallar is expected to provide additional capital for Bumi and Berau to expand their current operations. Last year, Bumi produced 57.4 million tons of coal, while Berau produced 14.3 million tons. Rothschild said that by 2013, the combined group would nearly double production to 140 million tons a year.

State controlled Bank Negara Indonesia (BNI) is expected to raise Rp10.5 trillion in a planned secondary share offering next month. The bank has priced its shares at Rp3,100 per share, which is in the middle of the indicative price range of Rp2,300-3,700 per share. The lender stated that around 80% of the funds raised would be allocated to support credit growth, with the remainder to be used to expand its supporting infrastructure, including the addition of new outlets, ATMS and modernization of its IT system. As part of the secondary offering, BNI will issue 3.37 billion new shares equivalent to an 18% stake in the bank. The government’s holding in the bank will be subsequently diluted to 60% from 73% prior to the rights issue. With 40% of BNI’s shares listed on the Indonesian Stock Exchange following the secondary offering, the bank should be eligible for corporate tax cuts under existing tax regulations. The secondary offering is being co-managed by Goldman Sachs, UBS, Credit Suisse, Morgan Stanley and Macquarie.

Selected Instant Indicators EXCHANGE RATE 2009 - 2010 15,000

11,750

11,100

14,267

US$ (LHS)

14,500

100 YEN (LHS) EURO (RHS)

14,000

10,933

13,000

10,733

12,500 12,000

9,800

11,500

9,480

9,150

10,000

8,945

9,500 Nov 09

D

J-10

F

Mar

A

M

Jun

Aug

J

2009

S

O

23Nov

2010

STOCK MARKET INDEX

3,700

USA S&P 500 3,678

IDX - Jakarta

1,225

S&P - USA

3,500

1,193

3,300 3,100

1,150

2,900 2,700

1,093

1,075

2,500 2,416

2,300

1,047 1,000

2,100 D

J-10

F

Mar

A

M

Jun

J

Aug

2009

S

Oct

25 Nov

2010

INTEREST RATES % 6.7 6.5

6.5

6.4 6.2

6.1

6.2

Deposit Rate

5.8

Interbank Call Rate SBI 5.5 Nov 09

D

J-10

F

Mar

A

M

Jun

Jul

Aug

2009

S

Oct

INTERNATIONAL RESERVES AND TRADE BALANCE

US$ Bn

Trade Balance*

86.6

Net FX Reserves

2,813

2,545 71.8

2,370

88 84

2,870

80 76 72 68

62.3

1,555

64 60

1,370

56 870

52 48

370

In its statement, the bank said a new US$600 million development policy loan would strengthen reform efforts supported by previous loan programs to reduce investor uncertainties, strength-

23Nov

2010

3,370

1,870

-130

Elnusa Bangkanai holds a 69% interest in the Bangkanai production sharing contract in the Barito Basin, onshore East Kalimantan, which includes the prospective Kerendan gas field. In its statement, Salamander Energy highlighted that the Kerendan field had certified proven resources totaling 157 billion cubic feet (bcf) of gas and probable resources of 207 bcf. The firm also noted exploration prospects in the Bangkanai concession with potential resources in excess of 1.5 trillion cubic feet (tcf). It expects production from the Kerendan gas field to start up in 2014, with the gas to be sold for local power generation. Salamander Energy chief executive James Menzies said the acquisition would complement the firm’s existing portfolio and provide synergies with its other gas appraisal and development projects in East Kalimantan.

Local carrier Sriwijaya Air said it has signed a Letter of Intent to purchase 10 Embraer e-190s from the Brazilian manufacturer.

10,500

8,500

6.4

U.K. Listed Salamander Energy has acquired Elnusa Bangkanai Energy from local oil and gas firm Elnusa in a US$11.2 million deal.

11,000

9,574

US$ Mn

The World Bank has approved two loan programs for Indonesia worth a total US$800 million.

13,500

10,450

Nov 09

CIMB Securities Indonesia, Danareksa Sekuritas and Indo Premier Securities will underwrite the issue, which has an indicative yield of 8.25-9.375%. The bond has an AA- (idn) rating from Fitch ratings. BTPN president director Jerry Ng said the issue was part of the bank’s strategy to seek long-term funds, taking advantage of low-rates, to support its credit expansion. The executive asserted that BTPN would use the bulk of the funds to extend new loans to its core market of pensioners and small and medium-sized businesses. As of 30 September, BTPN reported credit growth of 58% year-on-year, with loans totaling Rp21.8 trillion. The bank’s assets for this period totaled Rp30.8 trillion, up 60% from the year earlier period. As of 30 September, BTPN had a loan-to-deposit ratio of 89% and a non-performing loan ratio (NPL) of 0.39%.

The original contract, awarded in 1982, will expire in 2012. The concession is located in the Madura Strait offshore East Java and includes the Madura BD and MDA fields as well as numerous other prospects and leads. Husky Energy chief executive John C.S. Lau said the contract extension provided the basis for advancing the Madura BD field towards development. He added that the Madura Strait concession represented an opportunity to build material oil and gas businesses in the region. Husky Energy currently has a contract with three local companies to supply 100 million cubic feet per day of natural gas from Madura BD. It also has a plan of development with its partner CNOOC for Madura BD that has been approved by the government. The Madura Strait concession has reserves estimated at nearly 500 billion cubic feet of gas and will require more than US$600 million to develop.

Canada’s Husky Energy has received government approval for a 20-year extension

IDX

Bank Tabungan Pensiunan Nasional (BTPN) has appointed three underwriters for a planned Rp750 billion bond floatation next month.

of its existing Madura Strait production sharing contract.

en the management of public finances and enhance poverty alleviation and service delivery. A US$200 million infrastructurerelated loan, meanwhile, will be allocated to improve the efficiency of government spending in the infrastructure sector, particularly the provision of roads, power, water and sanitation services. World Bank country director Stefan Koeberle commented that consumer spending and a thriving private sector has helped fuel economic growth and has prompted renewed interest in Indonesia from international investors. The executive said it was therefore imperative that Indonesia continue to move forward with its structural and institutional reforms, including through programs supported by the World Bank.

44 S09

Oct

N

D

J-10

F

Mar

2009

*Starting Jan08 Imports using General Trade System

A

M

Jun

J

Aug 2010

S10

40

Sriwijaya Air finance director Jefferson Jauwena said the firm chose the Embraer regional jets because of their ability to take off and land on short runways. He said it was also looking to differentiate itself from its main competitor Lion Air, which uses ATR 72-500s for its domestic and regional flights. The Embraer E-190 has a similar capacity with the Boeing 737 and Airbus A318. Last month Sriwijaya also signed a memorandum of understanding with Boeing to acquire 10 Boeing 737-800s with an option for 10 additional aircraft. Sriwijaya Air is currently investing in a major expansion plan to

boost flights to eastern Indonesia and add new flights to regional hubs like Ho Chi Minh in Vietnam, Pnom Penh in Cambodia, Huang Zhou in China and Perth in Australia.

Palm oil producer Gozco Plantations has secured a Rp375 billion loan from state controlled Bank Mandiri. Gozco said the funds would be used to finance development a 7,500 hectare plantation area in Muara Enim, South Sumatra, including a planting program and construction of palm oil processing facilities. The loan will have a tenure of eight years at an interest rate of 12% per year. Mandiri executive vice president Rafjon Yahya said the deal reflected the bank’s efforts to expand lending into the agricultural sector, targeting corporate clients. He added that the bank has around Rp3-4 trillion in new loans in the pipeline to extend to major agricultural producers over the coming months. Gozco currently produces around 55,000 tons of palm oil per year. The firm has a land bank of more than 125,000 hectares, of which 97,000 hectares are unplanted and require further development to come on stream.

Telecom infrastructure provider Inovisi Infracom has acquired a 60% stake in B2B coal trading portal Goldchild Integritas Abadi (GIA) in a US$47 million deal. Inovisi corporate secretary Benita Sofia stated that the acquisition reflected the firm’s strategy to expand its E-commerce and electronic trading services into the

coal and mineral industries. Inovisi currently provides electronic transactions services for the IT and telecommunications industries. GIA operates the Coal Index IT platform, which helps match transaction specifications between buyers and sellers. The firm also has access to 110 million tons of coal reserves, plus commitments from suppliers of more than 200 million tons over the next two months. GIA is affiliated with Hong Kong-based Goldchild Group, which provides international supply chain services for industrial and agricultural products including coal, metal ores and oil and gas.

Bhakti Capital Indonesia said it has completed its acquisition of UOB Life Assurance earlier this month. Bhakti Capital purchased the insurer from previous owners Pru Life Assurance, Bank UOB Buana and Sun Antarnusa Investment. Financial details were not disclosed. Bhakti Capital president director Darma Putra said the purchase was part of its corporate strategy to diversify the firm’s financial services. He also highlighted the insurance industry’s solid prospects given the still low penetration level of insurance products in Indonesia. UOB Life Assurance will be renamed MNC Life Assurance following the deal. The insurance firm currently has around Rp500 billion in assets. Bhakti Capital is a part of the Bhakti Group controlled by businessman Hary Tanoesoedibjo.

Business Highlights are contributed to The President Post by CASTLEASIA/PT Jasa Cita from information supplied to members of their CEO Forum, the Indonesia Country Program. They are reprinted here with permission. For more information about CASTLEASIA programs, please contact Juliette or Wijayanti at 62 21 572 7321 or email [email protected] subject CEO Forum

SECTION

The President Post

Tourism

Display until January 12, 2011 /// N0. 19 www.thepresidentpost.com

C

Indonesia Did Well, but Others Did Better By Widya Sanjaya

Photo: www.nationalgeographic.com/Dean Conger

While Indonesia has been successful in attracting international tourists, it is also true that neighboring countries have been doing better through more aggressive campaigns.

O

ver the past few years Indonesia has seen wild fluctuations in the number of big spending foreign tourists staying in the country in rhythm with domestic as well as global economic and political conditions. There are indeed various wonderful destinations yet to be explored in this vast archipelago, but keeping tourists inside the country for a longer time is a real challenge. Nevertheless, in 2008 Indonesia attracted 6.45 million tourists, each of whom spent an average of US$178 per day. This was the reason the country bagged an estimated Rp70 trillion in foreign exchange that year, rising slightly the following year as the domestic political situation stabilized in line with rising investor confidence. The move by police anti-terror Detachment 88 to cripple terrorist networks in Indonesia also contributed to international travelers’ confidence in Indonesia as a safe place to visit. This has caused foreign governments to reverse their travel warnings, leading the number of foreign tourists to increase steadily over the past few years. The fact is, Indonesia has a very rich list of wonderful tourist destinations, each of which is endowed with natural and cultural charms but most have yet to be fully developed. A lack of comprehensive and integrated tourism development is to blame for foreign misunderstanding that Bali is the only tourist paradise in this part of the

globe. According to Sapta Nirwandar, Director Gerneal for Marketing at the Ministry of Culture and Tourism, Indonesia’s success in developing tourism industry came to light in 2008, when the country managed to attract more than 6.5 million international tourists. That was the reason the government extended the Visit Indonesia Year to 2009 and 2010, and for 2011 the government plans to use komodo dragon as the mascot for attracting tourists. The focus this year has been attracting tourists from Asian countries apart from luring in more from Europe and the Americas, the official says. Others Do Better While Indonesia has been successful in attracting international tourists, it is also true that neighboring countries have been doing better through more aggressive campaigns. Consequently, according to the Travel and Tourism Competitiveness Report issued in 2008 by World Economic Forum, Indonesia did not perform as attractively as Singapore, Malaysia, Thailand and Brunei Darussalam. In fact the report says that Indonesia’s tourism charms declined against rising charms of those countries. So what actually happened was not that Indonesia did not attract enough global tourists but that others did better than we did. In 2008 Indonesia was ranked 80th from 130 countries polled. Indonesia dropped by one level to 81st from 133 countries polled,

With that criteria formulation, they finally reached the conclusion that the best tourist destinations (in the order of Top Ten) in the world are Switzerland, Austria, Germany, France, Canada, Spain, Sweden, United States, Australia, and Singapore. Singapore leads the way in ASEAN in terms of attracting international tourists, followed by Malaysia (32nd), Thailand (39th), Brunei Darussalam (69th), Indonesia (81st), Philippines (86th), Vietnam (89th) and Cambodia (108th). Singapore is also the only ASEAN country to have been able to defeat Hong Kong (12th) and Japan (25th). South Korea, meanwhile, was placed 31st, Taiwan 41st, People’s Republic of China (47th) and India (62nd).

The Borobudur Temple: One of the jewels of the UNESCO world cultural heritage, located at Central Java, Indonesia

Singapore leads the way in ASEAN in terms of attracting international tourists, followed by Malaysia (32nd), Thailand (39th), Brunei Darussalam (69th), Indonesia (81st), Philippines (86th), Vietnam (89th) and Cambodia (108th). the report says. Indonesia’s biggest competitor within Southeast Asia is Singapore, which retained 10th place in global ranking in terms of attracting international tourists. Surprisingly, during the previous years, Singapore was ranked 16th. Many tourism observers say that Singapore’s high jump to 10th place was due to its consistency in implementing “feel-athome” tourism philosophy under which international travelers feel they are still in their respective countries even though they are in Singapore. The report also mentions that

Indonesia fell behind Malaysia which occupied 32nd place in global ranking, and Thailand (42nd). Brunei Darussalam, which only entered the race in 2008, managed to secure its tourism attraction ranking at 69th place, outmatching many Asian destinations. But Indonesia performed much better than the Philippines, which dropped to the 86th place, while Vietnam was ranked 89th and Cambodia 108th. In World Economic Forum’s 2009-2010 research, the criteria for evaluating every country’s tourist attraction in Travel and

Tourism Competitiveness Report was measured against every government policy affecting tourism industry growth as compared to that in other countries They used published data, information from various institutions as well as evaluation by observers of tourism industry and travel agencies. This annual report was published under the theme of Managing in Difficult Times which reflects the industry’s difficulties amid global economic crisis. Such issues as fluctuation of world oil prices and its impact on the tourism industry was also taken into consideration.

According to Jenifer Blanke, senior economist from World Economic Forum’s Global Competitiveness Network, researchers took into account every single factor that caused the tourim industry to remain attractive in every country polled. She says that countries listed in the Top Ten are those whose governments underscore the importance of good regulations and support from local business communities in pushing the tourism industry to reach world-class level. Included in the evaluation criteria are such determinants as quality of tourism industry’s human resources, their hospitability, facilities, tourist attractions categorized as world heritage, and, last but not least, government attention in terms of supporting regulations. Ufi Ibrahim, Chief Operating Officer of The World Travel & Tourism Council, says that Switzerland, Germany and Austria are the three countries very well known for the preservation of the environment, which they blend very nicely with tourism industry’s need of attracting interna-

“

Industry observers say for decades Indonesia focused too much on using Bali to attract world tourists and in the process forgot to promote other parts of the country.

tional travelers. She says that in any part of the globe, despite economic crisis that happens from time to time, the tourism industry has always managed to survive due to industry actors’ resilience and rising need in the market. What about Indonesia? This is a country very richly blessed with natural beauty and hospitable people which theoretically should have become the reason for the industry to flourish way beyond its current condition. Industry observers say for decades Indonesia focused too much on using Bali to attract world tourists and in the process forgot to promote other parts of the country. There was a time when the government launched an initiative to promote what it called The Other Side of Bali, but there has been no meaningful policy follow-up to date. Indeed, there are many other places in this vast archipelago that can be developed into worldclass tourist destinations such as Bali, but too little effort has been made to realize this idea.

The President Post

C2 November 12, 2010

www.thepresidentpost.com

Tourism

I

n 2009, the number of international tourists rose 3.6% to 6.45 million arrivals from 6.43 million in 2008. They spent a total of US$6.3 billion or an average of $129.57 per day and $995.93 per visit, according to a Wikipedia research. But while the number of arrivals increased that year, the total amount of money spent per visitor dropped, causing a shortfall of $1.07 billion compared to what the country bagged in 2008. In terms of attraction, Indonesia’s natural heritage comprises a unique combination: tropical climate, a vast archipelago of 17,508 islands (6,000 of them inhabited), and the third longest shoreline in the world (54,716 km) after Canada and the European Union. It is also the world’s largest and most populous country situated only on islands. The beaches in Bali, diving sites in Bunaken, Mount Rinjani in Lombok and various national parks in Sumatra are just a few examples of popular scenic destinations that have years been high on top of tourists’ priority destination list. These natural attractions are complemented by a rich cultural heritage that reflects Indonesia’s dynamic history and ethnic diversity. One fact that exemplifies this richness is that 719 living languages are used across the archipelago. The ancient Prambanan and Borobudur temples in Centeral Java, Toraja, Yogyakarta, Minangkabau, and of course Bali, with its many Hindu festivities, are some of the reasons why tourists keep pouring into Indonesia—Southeast Asia’s largest country and the world’s third largest democracy. In order to promote this natural beauty and unique local cultures, the government, in this case the Minstry of Culture and Tourism has continued to conduct various activities under the

Tourist Arrivals Soar as Nation Sells Its Nature and Culture By Widya Sanjaya

The rise in Indonesia’s tourist arrivals is attributable to the nation’s ability to sell both unique local cultures and natural beauty. The fact is, despite certain jolts on the political stage, international tourists have continued to pour in, raising optimism that the country will bag a lot more from this sector. program called Visit Indonesia Year. Beach resorts and hotels have been developed in some popular tourist destinations, especially Bali, Lombok, and West Java as primary destinations. At the same time, the integration of cultural affairs and tourism under the auspices of the same ministry shows that cultural tourism is considered an integral part of Indonesia’s tourism industry, and conversely, that tourism is used to promote and preserve the cultural heritage. Some of the challenges Indonesia’s tourism industry has to face include the development of infrastructure to support tourism across the sprawling archipelago, incursions of the industry into local traditions, and the impact of tourism development on the life of local people. The tourism industry in Indonesia has also faced setbacks due to problems related to security. Since 2002, warnings have been issued by some countries over terrorist threats and ethnic as well as religious conflicts in some areas, significantly reducing the number of foreign visitors for a few years. However, the number of international tourists has bounced

Tourist Arrivals and Average Stay Year

Number of Visitors

Average stay

2000

5,064,217

12.26

2001

5,153,620

10.49

2002

5,033 400

9.79

2003

4,467,021

9.69

2004

5,321,165

9.47

2005

5,002,101

9.05

2006

4,871,351

9.09

2007

5,505,759

9.02

2008

6,429,027

8.58

2009

6,452,259

7.69

back positively since 2007, and reached a new record in 2008 as seen in the table above. As in most countries, domestic tourists are by far the largest market segment. The biggest movement of domestic tourists is during the annual Idul Fitri, locally known as “lebaran”, which is the merriest Muslim holiday that follows a month of fasting. During this period, millions of city-dwelling Muslim residents visit relatives in their home towns. Intercity traffic is at its peak and often an additional surcharge is applied during this time.

Since 2006, the government has paid closer attention to the need to enhance domestic tourism. Competition amongst budget airlines has increased the number of domestic air travellers throughout the country, according to a Wikipedia report. The Ministry of Manpower has legislated to create long weekends by combining public holidays that fall close to weekends, except in the case of important religious holidays. During these long weekends, most hotels in popular destinations are fully booked. Reports say that since 2000,

on average, there have been five million foreign tourists each year who spend an average of about $100 per day. With an average visit duration of 9–12 days, Indonesia bags $4.6 billion of foreign exchange income every year, making tourism Indonesia’s third most important non-oil–gas source of foreign revenue, after timber and textile products. Three quarters of Indonesia’s visitors come from the Asia-Pacific region, with Singapore and Australia among the top countries of origin. The United Kingdom, France, and Germany are the largest sources of European

visitors. Although Dutch visitors are at least in part keen to explore the historical relationships, many European visitors are seeking the tropical weather at the beaches in Bali and are treating the island as their paradise. Around 59% of all visitors are traveling to Indonesia for holiday, while 38% for business purposes. In 2005 tourism accounted for 7% of job opportunities and 5% of Indonesian GDP. In January 2010 Hatta Rajasa, the Coordinating Minister for the Economy, reportedly said he expected “the tourism sector to contribute 4.8 percent of the gross domestic product” in the 2010 year. This dream has yet to be proven. Much of the international tourism of the 1920s and 1930s was by international visitors on oceanic cruises. The 1930s did see a modest but significant influx of mainly European tourists and longer term stayers to Bali. Many came for the blossoming arts scene in the Ubud area, which was as much a two-way exchange between the Balinese and outsiders as it was an internal phenomenon. Tourism more or less disappeared during World War II and in the early years of the Sukarno

era. National pride and identity in the late 1950s and early 1960s was incorporated into the monumentalism of Sukarno in Jakarta — and this included the development of international standard hotels such as Hotel Indonesia in Central Jakarta. The political and economic instability of the mid-1960s saw tourism decline radically again. Bali, and in particular the small village of Kuta, was however, an important stopover in the 1960s. In the early-to-mid 1970s, high standard hotels and tourist facilities began to appear in Jakarta and Bali, and from this period to the end of the Suharto era, governmental policies of the tourism industry included an array of regulations and developments to encourage increasing numbers of international tourists to both visit Indonesia and stay longer. Today, skyscrapers shave emerged in Indonesia’s big cities where multinational compnaies maintain their offices. World-class condominiums, luxury appartments and residential complexes are now inhabited by many foreign citizens who constitute part of Indonesia’s upper class that fuels the economy and bolsters local tourism industry. In terms of facilties for tourist satisfaction, Indonesia now has everything that any of the world’s major tourist destination relies on. In fact, Indonesia is leading the way in Southeast Asia in terms of selling natural beauty and local cultures. For 2011, President Susilo Bambang Yudhoyono himself will use the uniqueness of komodo dragon to lure in more international tourists. The President will on February 9 “vote for komodo” during the celebration of National Press Day in Kupang, Timor, to campaign for komodo dragon to be internationally acknowledged as an Indonesian heritage, thereby making komodo the mascot for Visit Indonesia Year 2011.

The President Post

www.thepresidentpost.com

November 12, 2010 C3

Tourism Indonesia’s Natural Beauty is Alluring to International Tourists By Diana Sasmita

This is a country richly blessed with natural beauty that has for decades attracted tourists from all over the world. It has a well-preserved, natural ecosystem with rainforests that stretch over about 57% of Indonesia’s land (225 million acres), approximately 2% of which are mangrove systems.

O

country on or before the 30th day of the stay. As of January 2010 the regulations changed again and the only type of visa on arrival (VOA) available was for 30 days for a fee of US$25.00. This new version of the VOA may be extended later at a local Immigration Office for a further once-only period of up to 30 days for a fee of Rp 250,000. The previous 7-day visa on arrival was no longer available from January 2010. Currently Indonesia allows visa free entry to the citizens of 12 countries. The nationals of these countries who are going on holiday, attending conventions or engaging in similar such activities are allowed to stay in Indonesia of up to 30 days without visa. This type of visa cannot be extended, transferred or converted to any other kind of visa; nor can it be used as a working permit. Visitors eligible under the visa waiver program have a visa issued at the Indonesian border checkpoints with that issuance subject to the discretion of the visa officer. The visa is not for employment and is not extendable. The citizens of the following countries are eligible: Brunei Darussalam, Chile, Ecuador, Hong Kong SAR (Special Administrative Region), Macau SAR (Special Administrative Region), Malaysia, Morocco, Peru, Philippines, Singapore, Thailand, Vietnam. These visas cannot be extended or converted to another type of visa.

However, most of the well-preserved beaches are those in more isolated and less developed areas, such as Karimunjawa, the Togian Islands, and the Banda Islands, according to Wikipedia. Diving Sites With more than 17,508 islands, Indonesia presents ample diving opportunities. Bunaken National Marine Park, at the northern tip of Sulawesi, claims to have seven times more corals than Hawaii, and has more than 70% of all the known fish species of the Indo-Western Pacific. Moreover, there are over 3,500 species living in Indonesian waters, including sharks, dolphins, manta rays, turtles, morays, cuttlefish, octopus and scorpion fish, compared to 1,500 on the Great Barrier Reef and 600 in the Red Sea. Tulamben Bay in Bali boasts the wreck of the 120m (390 ft) U.S. Army commissioned transport vessel, the Liberty. Other popular dive sites on Bali are at Candidasa and Menjangan. Across the Badung Strait from Bali, there are several popular dive sites on Nusa Lembongan and Nusa Penida. Lombok’s three Gilis (Gili Air, Gili Meno and Gili Trawangan) are popular as is Bangka. Some of the most famous diving sites in Indonesia are also the most difficult to reach, with places like Biak off the coast of Papua and the Alor Archipelago among the popular, more remote, destinations for divers. Surfing Surfing is also a popular water activity in Indonesia and the sites are recognised as world class. The well-known spots are mostly located on the southern, Indian Ocean side of Indonesia, such as the large oceanic surf breaks on southern Java. However, the north coast does not receive the same surf from the Java Sea. Surf breaks can be found all the way along Sumatra, down to Nusa Tenggara, including Aceh, Bali, Banten, Java, Lombok, the Mentawai Islands, and Sumbawa.

BELOW: G-Land: A well-known surf breaks at the Bay of Grajagan, East Java, Indonesia.

Photo: National Geographic/ David Doubilet

ne reason why the natural ecosystem in Indonesia is still well-preserved is because only 6,000 islands out of 17,000 are permanently inhabited. Forests on Sumatra and Java are examples of popular tourist destinations. Moreover, Indonesia has one of longest coastlines in the world, measuring 54,716 kilometres with a number of beaches and island resorts, such as those in southern Bali, Lombok, Bintan and Nias Island.

On Bali, there are about 33 surf spots, from West Bali to East Bal,i including four on the offshore island of Nusa Lembongan. Sumatra is the second island with the most number of surf spots, 18 all together. The usual time for surfing is around May to September as trade winds blow from east to

south-east. From October to April, winds tend to come from the west to north-west, so the east coast breaks get the offshore winds. Two well-known surf breaks in Indonesia are the G-Land in the Bay of Grajagan, East Java, and Lagundri Bay at the southern end of Nias island. G-Land was first identified in 1972, when a surfer saw the break from the window of a plane.

ABOVE: Raja Ampat: One of the most famous diving sites in Papua, Indonesia

National Parks There are 50 national parks in Indonesia, of which six are World Heritage-listed. The largest national parks in Sumatra are the 9,500km2 Gunung Leuser National Park, the 13,750km2 Kerinci Seblat National Park and the 3,568km2 Bukit Barisan Selatan National Park, all three recognised as Tropical Rainforest Heritage of Sumatra on the UNESCO World Heritage list. Other national parks on the list are Lorentz National Park in Papua, Komodo National Park in the Lesser Sunda Islands, and Ujung Kulon National Park in the west of Java.

Orangutans can be visited in the Bukit Lawang conservation area. The world’s largest flower, rafflesia arnoldi, and the tallest flower, titan arum, can be found in Sumatra. The east side of the Wallacea line offers the most remarkable, rarest, and exotic animals on earth. Birds of Paradise, locally known as cenderawasih are plumed birds that can be found among other fauna in Papua New Guinea. The largest bird in Papua is the flightless cassowary. One species of lizard, the Komodo dragon, can easily be found on Komodo, located in the Nusa Tenggara lesser islands region. Besides in Komodo island, this endangered species can also be found on the islands of Rintja, Padar and Flores.

It is noteworthy that different national parks offer different biodiversity, as the natural habitat in Indonesia is divided into two areas by the Wallace line. The Wallacea bio-geographical distinction means the western part of Indonesia (Sumatra, Java, Kalimantan) have the same flora and fauna characteristics as the Asian continent, whilst the remaining eastern part of Indonesia share similarities with the Australian continent. Many native species such as Sumatran elephants, Sumatran tigers, Sumatran rhinoceros, Javan rhinoceros and Orangutans are listed as endangered or critically endangered, and the remaining populations are found in national parks and other conservation areas. Photo: www.roylergracie.com

RIGHT: Komodo at the Komodo National Park in the Lesser Sunda Islands

Cultural Tourism Indonesia consists of 300 ethnic groups, spread over a 1.8 million km² covering 6,000 inhabited islands. This creates a cultural diversity with strong Hindu, Buddhist, Islamic and European colonialist influences. From the 3rd century until the 13th century, Hinduism and Buddhism shaped the culture of Indonesia. The best-preserved Buddhist shrine, which was built during the Sailendra dynasty in the 8th century, is the Borobudur temple in Central Java. A few kilometers to the southeast is the Prambanan complex, a Hindu temple built during the second Mataram dynasty. Both the Borobudur and the Prambanan temple compounds have been included in the UNESCO World Heritage list since 1991. In Bali, where most Hindus live, cultural festivals are major attractions to foreign tourists. Islam has also contributed greatly to the cultural society in Indonesia. As of 2006, 88% of Indonesia’s recorded population are Muslim. Islamic culture is prominent in Sumatra, and a few of the remaining sultanate palaces can be seen in Medan and Tanjung Pinang. Despite foreign influences, a diverse array of indigenous traditional cultures is still evident in Indonesia. The indigenous ethnic group of Toraja in South Sulawesi, which still has strong animistic beliefs, offers a unique cultural tradition, especially during funeral rituals. The

Minangkabau

ethnic

Photo: www.vivanews.com

group retains a unique matrilineal culture, despite being devoted Muslims. Other indigenous ethnic groups include the Asmat and Dani in Papua, the Dayak in Kalimantan and the Mentawai in Sumatra, where traditional rituals are still observed. A discussion of cultural tourism is not complete without a mention of Yogyakarta, a special province in Indonesia known as the centre of classical Javanese fine art and culture. The rise and fall of Buddhist, Hindu, and Islamic kingdoms in Central Java has transformed Yogyakarta into a melting pot of Indonesian culture. City Tourism City tourism activities are shopping, sightseeing in big cities, and enjoying modern amusement parks. The nation’s capital, Jakarta, offers many places for shopping. Mal Kelapa Gading (the biggest one with 130 square kilometres, Plaza Senayan, Senayan City, Grand Indonesia, EX, and Plaza Indonesia are some of the best shopping malls in the city. Another popular tourist activity is golfing, a favorite sport among upper class Indonesians and foreigners. Some notable golf courses in Jakarta are the Cengkareng Golf Club, located in the airport complex, and Pondok Indah Golf and Country Club. Bali has many shopping centers, for instance, the Kuta shopping center and the Galeria Nusa Dua. Nightlife of Indonesia is also popular among foreigners, especially in the big cities like Jakarta, Bandung, Surabaya, Manado, Denpasar and Medan. Visa Regulations On February 1, 2004, Indonesia introduced unpopular and tighter tourist visa regulations. Although tourist visas were formerly free and valid for 60 days, visitors from certain countries were at the tme required to purchase one of two visas on arrival (VOA): a US$15 visa valid for 10 days or a US$25 visa valid for 30 days. This was heavily protested by

the tourist industry, which pointed out that this cost adds up for families and 30 days is a very limited time to travel in Indonesia with a number of remote and hard to reach locations. The countries now subject to these tighter regulations include Argentina, Australia, Brazil, Canada, Denmark, Finland, France, Germany, Hungary, Italy, Japan, New Zealand, Norway, Poland, South Africa, South Korea, Switzerland, Taiwan, United Arab Emirates, the United Kingdom and the United States. On July 14, 2004, the Indonesian tourism ministry granted permission for more countries to be included on the VOA list, including Iran, Saudi Arabia, Kuwait, Belgium, Spain, Portugal, Russia, Egypt, Austria, Ireland, Qatar and Luxembourg. These visas were not valid for extension of conversion into any other kind of visa and the visa holder was required to leave the Photo: www.wikimedia.org

The citizens of 17 countries need to obtain an approval from the immigration services head office the Direktorat Jenderal Imigrasi in Jakarta. The 17 countries are: Afghanistan, Israel, Albania, North Korea, Angola, Nigeria, Bangladesh, Pakistan, Cameroon, Somalia, Cuba, Sri Lanka, Ethiopia, Tanzania, Ghana, Tonga and Iraq. Those effected must have a sponsor in Indonesia, either a person or a company; the sponsor must go in person to the Immigration Head Office in South Jakarta and must produce a photocopy of applicant’s passport, a supporting letter and the applicant’s photograph. When it is approved, the Immigration Head Office will send a copy of approval letter to the applicant. Visitors to Indonesia are required to be in possession of valid passport with minimum of 6 months validity and a return or an onwards journey ticket at the time of arrival.

BELOW: Prambanan complex in Central Java. A Hindu temple built during the second Mataram dynasty, which along with Borobudur Temple have been included in the UNESCO World Heritage list since 1991.

The President Post

C4 November 12, 2010

www.thepresidentpost.com

Tourism Governor Fauzi Bowo Announces Winners of Jakarta Tourism Awards The evaluation was based on parameters covering consumer satisfaction in the last six months, consumer satisfaction based on comparison between reality and consumer expectations.

“

A

nugerah Adikarya Wisata 2010 or the Jakarta Tourism Award is the highest citation for tourism industry-related companies in DKI Jakarta that have contributed positively to the progress and development of tourism in the capital city Jakarta. “Standards of tourism continue to rise every year and there is competition from other countries,” said Fauzi Bowo, the Governor of DKI Jakarta, when awarding Adikarya Tourism Awards 2010 at the Ritz Carlton Hotel Ball Room, Kuningan, South Jakarta. “All of this is the effort to support Jakarta as a world-class travel destination in order to compete with other big cities in the world,” said the Governor. Fauzi said that the DKI Jakarta government is not only rewarding, but is also seeking to motivate and encourage the tourism industry to be more active and improve its performance. “I appeal to all relevant players to cooperate with the provincial government in order to improve the quality and promotion of tourism,” he said. There were 88 business entities that became nominees in two sectors of industries. First, superior tourism business operations, which is the evaluation of

DKI Jakarta government is not only rewarding, but is also seeking to motivate and encourage the tourism industry to be more active and improve its performance. Fauzi Bowo Governor of DKI Jakarta

business performance on tourism industry with categories: accommodation (non-star hotel to 5-star hotels), restaurants (national and international culinary), travel agencies, MICE (Meetings, Incentives, Conventions and Exhibitions), impresarios, and entertainment industry (club & discotheques, spa, massage house, golf, etc). Second, contribution on tourism, which includes the evaluation on the contribution of the

supporting industries to Jakarta’s tourism development with categories in transportation (national & international airlines, taxi companies, and tour bus operators), tourism education and training centers, malls/shopping centres, PCO/PEO (Professional Congress Organizers/ Professional Event Organizers) and mass media. There were no winners in four sub-categories as no nominees

met the specified requirements. The four sub-categories are 1 and 2 stars accommodation, MICE, PEO/PCO, and electronic media. The judges were experts, professionals and business players of high credibility, such as Budhi M. Suyitno, Hermawan Kartajaya, Bambang Setiadi, Herna P. Danuningrat, Kemal Effendi Gani, Tity Koesoemo, Eddy Kuntadi, Vindex Tengker, Hendra Rahtomo, Prof.Dr. Wagiono,

and others. The evaluation was based on parameters covering consumer satisfaction in the last six months, consumer satisfaction based on comparison between reality and consumer expectations. Respondents were asked to appraise five aspects demanded by consumers in each industry. The survey was done on 6.421 respondents from July to November 2009, which showed a consumer confidence rate of 95%. Saripan Pacific achieved the award for 3- and 4-star hotel category while Shangri-la took first place in the 5- star hotel category. For restaurant category with national sub-category, Babah Elite Kitchen took first place as

well as Sushi Tei in the international category. Entertainment and recreation category winners were X2 for clubs and discotheques, Taman Sari Royal Heritage Spa for spa, and Pondok Indah Golf for golf category. Panorama Tour took first place in Travel Agency category, while Java Festival Production won in Impresario category. The Mall category prize was taken by Plaza Indonesia Shopping Mall. Garuda Indonesia took the national airline award and Singapore Airlines the international airline award. Hiba won the tour bus category and Express in the the taxi category. Sekolah Tinggi Pariwisata Sahid received an award for tourism education and training category, while the mass media category with sub-category print media award was taken by Seputar Indonesia. Head of Tourism Department DKI Jakarta, Arie Budhiman, said the government would continue to improve the quality of Adikarya Tourism in order to be the platform of competition and change management for tourism in Jakarta. “The awards are expected to be the new culture of tourism industry development in Jakarta in a systemic and sustainable manner.”

The President Post

www.thepresidentpost.com

November 12, 2010 C5

Pictorial Events The Indonesian Council on World Affairs (ICWA)

Investor Summit 2010

Text & Photos by Nandi Nanti

The Indonesian Council on World Affairs (ICWA) held an event at the Financial Club Jakarta with the theme “Indonesian Government – Private Sector Strategic Partnership”. Keynote speakers were Prof. Armida S. Alisjahbana (Minister of State for National Development Planning) and Suryo B. Sulisto (Chairman of the Indonesian Chamber of Commerce and Industry). The event was attended by, among others, the Ambassador of Brazil Manuel Innocencio Santos, former government senior officials Makarim Wibisono and Joop Ave, and businessmen and professionals.

Minister of Finance Agus Martowardojo, Vice Minister of Finance Anny Ratnawati, President Director of Indonesia Stock Exchange Ito Warsito, Head of Bapepam-LK Fuad Rahmany, and Directors of KPEI and KSEI opened the Investor Summit and Capital Market Expo 2010 at Jakarta. The event’s theme this year is “Capital Markets: Gateway to A Better Future.” 28 companies participated on the event and presented their long-term business plans.

Forbes Indonesia Launching Text & Photos by Nandi Nanti

Forbes Indonesia launching night was attended by the magazine’s CEO Forbes Steve Forbes, Minister of Telecommunication and Information RI Tifatul Sembiring, CEOs, Editor-in chiefs from various media and prominent figures Chairul Tanjung, Sandiaga Uno, Anies Baswedan, Rizal Ramli, Christianto Wibisono, Agus Parengkuan, Darwin Silalahi, and others.

Ernst & Young Award 2010 Text & Photos by Nandi Nanti

IIFEA Seminar Text & Photos by Nandi Nanti

Here are the winners of the Ernst & Young Award 2010: Edwin Soeryadjaya, Chairman of Saratoga Group, as Indonesian Entrepreneur of The Year 2010; Rawono Sosrodimulyo (PT Aditec Cakrawiyasa) won the Manufacture Innovation Award; Tan Eng Liang (SOHO Group) won the Health Product Innovation Award, and Santoso (KBR68H) won the Social Entrepreneur Award. The event was opened by CEO Ernst & Young Giuseppe Nicolosi and attended by the nominees, businessmen, and professionals.

President University Foundation Press Conference Text & Photos by Nandi Nanti

A press conference on Juwono Sudarsono’s appointment as the head of President University Foundation was held with speakers comprising CEO of PT Jababeka S.D. Darmono, Rector of PU Ermaya Suradinata, and the Director General of Higher Education.

The “Portrait of Indonesia’s Economic Development: Are we in the right direction?” seminar was recently held with Anthony Budiawan, Executive director IIFEA, Prof. Dr. Hendrawan Supratikno (DPR RI), Dr Max Pohan (Deputy Minister of BAPPENAS) Dr. Arianto A. Panturu (Director of LPEM FEUI) as panelists.

The Indonesia Health Map Towards MDGs Seminar Text & Photos by Nandi Nanti

The Indonesia Health Map Towards Millenium Development Goals (MDGs) seminar was opened by CEO of PT Jababeka S.D. Darmono. It was held at President Lounge, Menara Batavia. The speakers were Director General of Medical Service Ministry of Health RI, Head of IDI Prijo Sidipratomo, and a representative from PT Kimia Farma.

The President Post

C6 November 12, 2010

www.thepresidentpost.com

Living

15 Bose QuietComfort 15 Acoustic Noise Cancelling Headphones Block all airplane annoyances – including the ungodly roar of engines, young children and yappy pilots – with the latest soundblocking headphones from Bose – US$299.95. Subscription to ‘The Economist’ Instead of paying the outrageous newstand price multiple times a year at airports, save your loved ones a ton of money by having this airplane reading staple -arguably the best magazine in the world right now – delivered to their door. Or e-reader. Subscriptions to “The Economist” start at US$67.25 for 25 issues. Linda Farrow Luxe Oversized Square-frame Acetate Sunglasses If the price tag doesn’t seem worth a little vanity, consider that these shades also come with polished “stingray embellishment”

Great Travel Gift Ideas for Christmas o n the

arms, a leather case and designer display b o x . If you don’t feel like a celeb yet, you never will. – US$690. Leica D-LUX 5 Digital Camera Yes, it’ll satisfy the nostalgic gadget-loving uncle in your life. But the new generation of cameras from the name behind 1960s photojournalism legends isn’t any old throwback. The D-Lux 5 has a super-fast lens (up to 12,800 ISO) and delivers pictures in 1:1, 4:3, 3:2 and 16:9 (widescreen) formats – US$799.00 from B&H or Leica. Globe Trotter Suitcase The only

downside to having a gorgeous case from the handsome Globe Trotter Orient range? The pain of seeing it tossed about on the baggage belt. No worries, the envy of fellow passengers will make up for a few nicks and scratches – from US$894. Native Union Moshi Moshi 04 The Moshi Moshi 04 is a multi-purpose mobile phone handset that can be converted into a conference call unit and iPod speaker. It supports Bluetooth 2.1 multipoint technology, which allows users to pair and answer calls on two Bluetooth devices – US$179.99. Diesel Time Zone Watch Even if you don’t actually need to track four time zones at once, you might want to with this snazzy

wristwatch. With stainless steel, leather and mineral crystal elements, you never looked more stylish – US$295. Smythson Travel Case This plumhuedcrocodileprint calfskin wallet from Smythson has slots for tickets, documents, currency and boarding passes. It also comes with a removable passport cover – HK$4,240. L.B. Evans Men’s Lariat Travel Scuff With a supple leather exterior and memory-foam insole, these aristocratic foldable leather travel slippers will have air passengers taking off their shoes and feeling better about economy class in no time – US$84.95.

Callpod Chargepod With six docks compatible with more than 3,000 devices including smartphones, cellphones, portable gaming systems and digital cameras, the Chargepod will end all adaptor and charger needs – US$39.99. Acne Shearling Aviator Hat The look says, “I’m on speaking terms with Amelia Earhart.” The rugged sheepskin shell and plush shearling earflaps let people know you’re not joking around in extreme climes – US$450. KARVT Wooden MacBook Skins KARVT Wooden MacBook Skins are handmade of 100 percent cedar wood.

to keep toys and snacks from falling off, and two side pockets to store more toys – US$19.95 KARVT also sells wooden iPhone and iPad cases – US$39. Heys xScale The makers of this digital luggage scale claim it’s the smallest such scale in the world. It can weigh up to 50 kg (110 pounds) and comes in a range of juicy colors – US$30

Lonely Planet Phrasebook iPhone App Each Lonely Planet audio phrasebook contains 630 commonly used phrases in the world’s most spoken languages. It’s a great (virtual) stocking filler, and your lucky recipient will never be lost in translation again – US$5.99 per phrasebook.

StarKids Snack and Play Travel Tray These lightweight, foldable trays will be a godsend for parents of kids with short attention spans and the tendency to wail on planes. The travel tray has a padded rim

Photo: www.craftzine.com

Why the Office is the Worst Place to Work When you’re in the office you’re lucky to have 30 minutes to yourself. Usually you get in, there’s a meeting, then there’s a call, then someone calls you over to their desk, or your manager comes over to see what you’re doing.

C

ompanies spend billions on rent, offices, and office equipment so their employees will have a great place to work. However, when you ask people where they go when they really need to get something done, you’ll rarely hear them say it’s the office. If you ask, you’ll usually get one of three kinds of responses: A place, a moving object, or a time. They’ll say their house, their back porch, an extra bedroom they’ve converted into a home office, a library, the coffee shop down the street, the basement. Or they’ll say their car, or a train, or a plane – basically, during their commute. Or they’ll say really early in the morning, really late at night, or on the weekend. In other words, when no one else

is around to bother them. I don’t blame people for not wanting to be at the office. I blame the office. The modern office has become an interruption factory. When you’re in the office you’re lucky to have 30 minutes to yourself. Usually you get in, there’s a meeting, then there’s a call, then someone calls you over to their desk, or your manager comes over to see what you’re doing. These interruptions chunk your day into smaller and smaller bits. Fifteen minutes here, 30 minutes there, another 15 minutes before lunch, then an afternoon meeting, etc. When are you supposed to get work done if you don’t have any time to work? When’s the last time you had three or four hours to yourself to get work done? It probably wasn’t

at the office. A phone call, a coworker tapping on your shoulder or knocking on your door, a required meeting – all the things prevent you from having long uninterrupted stretches of time to get things done. Good work requires thinking, and thinking requires time. I believe sleep and work have a lot in common. I don’t mean that you can sleep at work or you can work in your sleep. I mean sleep and work are phase-based activities. You don’t just go to sleep or go to work – you go towards sleep and towards work. You aren’t sleeping when your head hits the pillow. You start the sleep process. You have to go through phases to get to the really beneficial sleep. And if you’re interrupted before you get there, you have to start over. The same is true for work. You

don’t just sit down at your desk and begin working effectively. You have to get into a groove. You go towards good work. It takes some time to settle in, clear your head, and focus on what you need to do. So how about some solutions? OK, I can do that. There are a lot of things you can do to discourage interruption at work and give people longer stretches of uninterrupted time to get things done. • Instead of casual Fridays, how about no-talk Thursdays? Try it. You won’t believe how effective it is. On Thursdays – and you can just try this once a month if you want – no one in the office can talk to each other. • Use passive instead of active communication tools. When someone calls your name,

You don’t just sit down at your desk and begin working effectively. You have to get into a groove. You go towards good work. It takes some time to settle in, clear your head, and focus on what you need to do. knocks on your door, or stops you in the hallway, you can’t avoid them. Even if you try, you’re already distracted. So, instead of relying on so much face-to-face communication and collaboration – what I like to call “active” communication – try more passive methods of communication. Use e-mail.

Use instant messaging. Use collaboration software. • Cancel your next meeting. Or just don’t attend it. I’m not suggesting you boycott all meetings – just the next one. Life will go on. And all that stuff you thought you had to talk about with eight other people around a table will get worked

out some other way. Work can happen without that next meeting. Once you recognize that meetings aren’t as necessary as you thought, they’ll become a last resort instead of a first resort. Sorry to bother you. Now get back to work. (CNN)

The President Post

www.thepresidentpost.com

November 12, 2010 C7

Living How to Pick the Perfect

Point-and-Shoot Camera Photo: www.news.idealo.co.uk

Keep an eye out for lens quality. There aren’t many good ways to spot this when shopping, but higher priced cameras tend to have better lenses.

Size Generally speaking, there’s no good reason not to get the smallest camera that has the features you are looking for. However, size will often limit the zoom range that can practically fit inside the body. On the other hand, larger cameras can pack more lens inside. Also, they can house a larger sensor, which typically performs better in low light and captures better color in bright light. As another rule of thumb, the higher number of features that are packed into a smaller package, the more expensive the camera will be. If two models have the same specs and size isn’t the most important factor, you can usually save a bit by choosing the slightly larger of the two.

F

irst things first – do not get wrapped up in the number of megapixels. Many point-and-shoot cameras have 12 megapixels or more, which exceeds the number of pixels that many professional cameras could capture just five years ago. Increased megapixel counts on the tiny sensors used in most compact cameras just means more noise, not necessarily sharper images. Instead, there are a few characteristics to focus on: lens focal range and quality, size, ruggedness, and ergonomics. Depending on the person you’re shopping for, one or more of these criteria will narrow down the options quite a bit. Lens The first thing I look for in a compact camera is a good lens. The lens is what forms an image for the sensor to capture, so even if the camera has 12MP, a crappy lens will just give you 12MP worth of crap. Most point-and-shoots have a zoom lens that starts at around 35mm equivalent – decent, but might be tricky in tight quarters. Many newer cameras offer a wider angle of view at the short end, usually 28mm equivalent. If you’re buying for someone that likes landscapes or architecture, look for something that can go

wider – some cameras have a lens as wide as 24mm equivalent. On the long end, something in the 100-150mm equivalent range is pretty standard. That’s good for head-and-shoulder portraits, but it won’t get you close enough for things like sports or nature photography. Some cameras offer ranges up to 200mm, but most manufacturers offer some-

Generally speaking, there’s no good reason not to get the smallest camera that has the features you are looking for. However, size will often limit the zoom range that can practically fit inside the body.

Photo: www.digitalcamera-memorycard.com

Social Networks Steer China Web Evolution Facebook and Twitter are blocked in China. But local rivals have seen a surge in the use of their services over the past two years. Nobody looking at Tencent’s financial statements – with its continued double-digit revenue growth and 68 per cent gross margin – would come to the conclusion that the company needs to change its business model. Third-quarter revenue at the Chinese internet company grew 55.1 per cent to RMB5.2bn ($780m), compared with the same period last year. And yet, the world’s third-largest internet company by market capitalisation is working on changes that will turn its traditional strategy upside down. Tencent’s biggest asset is the huge user base served by QQ, its instant messaging tool – which had 638m active accounts at the latest count. In the past the company focused on making sure that if these people spent money online, they would spend it on Tencent products. It has made efforts to provide its users with a variety of services including online games, news and social networking, making them less likely to leave the Tencent platform. Now it is throwing open the door and inviting others into the party: Other companies can offer their games on Tencent sites, and third-party websites can push their feeds on to the Tencent platform. The about-turn recognises the fact that social networking sites are changing the monetisation models in the internet industry in China, the country with the world’s largest internet population at 420m.

Sina, the company that runs the country’s largest online news portal and leading microblog, last month teamed up with MSN China, opening its microblog and Microsoft’s instant messaging tool in China to each other. Renren, a Chinese Facebook clone, is also aggressively expanding its open platform to include new third-party-developed products and new ways of linking to third-party sites.

China’s internet market now sees most of its revenues coming from users – through online games and similar services, while in the US advertising and e-commerce dominate as revenue sources. The new initiatives mean different companies are sharing revenue streams. Sina, for example, has said it will give 70 per cent of revenues generated on its site from outside applications to the third party developers. The reason the companies are willing to team up is the immense draw of social networking services.

Facebook and Twitter are blocked in China. But local rivals have seen a surge in the use of their services over the past two years. Sina said its microblog reached 50m users in October, barely a year after its start, and continues to grow rapidly. In the US, the growth of social media has contributed to the development of online advertising, such as targeted ads on Facebook. In China, that has yet to happen. “In the US, if your site generates a certain traffic you will actually be guaranteed an amount of money based on advertising, but in China [traffic] may not translate into revenue immediately,” Martin Lau, Tencent president, told the Financial Times. “That’s why a lot of companies go into gaming, go into value-added services so that you can charge the users.” Currently, advertising accounts for just 7.3 per cent of Tencent’s revenues – the rest comes from value-added services, mostly games. But executives across the Chinese internet industry are convinced that change is afoot. China’s internet market now sees most of its revenues coming from users – through online games and similar services, while in the US advertising and e-commerce dominate as revenue sources. However, as the appearance of games on social networking sites is pushing US internet companies towards user-paid models, China is set to see a movement in the opposite direction. (FT)

thing along the lines of a “super-zoom” – cameras with zooms that range up to 400mm equivalent or more. Finally, keep an eye out for lens quality. There aren’t many good ways to spot this when shopping, but higher priced cameras tend to have better lenses. These lenses also tend to have larger maximum apertures, which are good for capturing better pictures in low light. Look for “f-stop” ratings better than f/2.8 (the smaller the number the better). Also, the more glass you can see, the greater the likelihood of a higher quality lens.

Unfortunately, there aren’t many “simple” digital cameras – the ease of adding features via software and fierce competition among an array of manufacturers has lead to an explosion of complexity. Still, some cameras offer switches or buttons that throw everything into fully automatic mode if tweaking settings gets out of hand. There’s no easy choice to make among the dozens of current camera models out there at any given time, but these tips should make it easier to break the choice down to a few models. (ARSTECHNICA.COM)

Does Living in the City Age Your Brain? Spending a few minutes a day in a park gives you time to reduce your cognitive efforts and relieve mental exhaustion. There is a reason more than half the world’s population lives in cities, with the number expected to grow. Cities have a lot to offer. Residents can walk to nearby shops and enjoy cultural attractions not available to those in more rural areas. Also, living in a city may make your commute to work much shorter. Unfortunately, according to health officials from the World Health Organization, that convenience may come with a price -- higher levels of stress and a measurable impact on your brain. The problem seems to be “attention,” or more specifically, the lack of it. With so many different distractions -- from a flashing neon sign, to the cell phone conversation of a nearby passenger on a bus, a city dweller starts to practice something known as “controlled perception.” That toggling back and forth between competing stimuli can be mentally exhausting. In fact, according to a recent study from the University of Michigan in Ann Arbor, just living in an urban environment makes it more difficult for an individual to hold things in memory. In the same study, researchers split undergraduate students into two groups. One spent the day in a suburban neighborhood, the other group in a busy city. Overall, those in the city scored lower on attention tests and had a worse mood comparatively. Some of this may be no surprise, especially if you live in a city yourself. The good news, however, is a solution may be relatively easy. Recent studies have shown just getting glimpses of green areas can improve brain performance. While it would be great to get completely “unplugged” for long periods of time -- spending a few minutes a day in a park gives you time to reduce your cognitive efforts and relieve mental exhaustion. So, a key for urban city planners is to maintain and enhance natural green settings as much as possible, and for individuals to take brief respites to enjoy them. (CNN)

The President Post

C8 November 12, 2010

www.thepresidentpost.com

Health A Closer Look:

Prostate Cancer Stage May Not Matter when Tumor is Localized

A New Blood Thinner Option

Prostate cancer is often discovered when the tumor is localized -- meaning it has not spread beyond the site of the original cancer. Still, men with localized prostate cancer are given a “stage” of T1 or T2 to reflect the size of the tumor and other characteristics that involve the chances that the cancer will recur. Cancer staging can also help doctors and patients decide on treatments after surgery. However, a new study confirms what many cancer doctors have felt about localized prostate cancer staging: It just doesn’t appear to matter after surgery.

The Food and Drug Administration last month approved dabigatran (sold under the brand name Pradaxa) based on clinical trial data showing that it’s at least as effective as the old standby.

T

he new drug offers practical advantages for patients, namely avoiding the frequent blood tests and dose adjustments required with warfarin (also known by its brand name, Coumadin). “It’s a potential game-changer,” says Dr. Mintu Turakhia, a cardiologist at the Palo Alto VA Hospital and Stanford University. The clinical trial was huge, comparing two doses of dabigatran with warfarin treatment in 18,113 patients across the globe and following them for two years. The rate of stroke was 34% lower in the high-dose group — 150 milligrams, which was the dose approved by the FDA — than in the warfarin group. Actual rates per year were 1.1% (11 in 1,000) for the group on 150 mg of dabigatran and 1.7% (17 in 1,000) for warfarin The study was published last year in the New England Journal of Medicine. Here’s a closer look at stroke prevention treatment for highrisk patients. How can people reduce their risk of stroke? Risks include age, family history and personal history of stroke or heart attack. Of treatable risk factors, high blood pressure and atrial fibrillation rank as the big

two. Others include heart failure and diabetes. Atrial fibrillation is an abnormal heart rhythm, specifically a too-fast beating of the smaller chambers of the heart called the atria. Also called A-fib, the condition increases a person’s stroke risk by a factor of five. The link between atrial fibrillation and stroke was established by the Framingham Heart Study about 30 years ago, Boyle says. In the late 1980s and early 1990s, several large clinical trials showed that the blood thinner warfarin — referred to by many patients as “rat poison” because it was first marketed as a pesticide — reduced the risk of stroke by about 66% compared with placebo in patients with A-fib, he says. How do the treatment drugs work? Clotting factors in the blood depend on the presence of vitamin K. By blocking the site where vitamin K usually acts, warfarin inhibits clotting. However, patients taking warfarin must have their blood checked periodically because its effect on blood can be modified by foods and other drugs. For instance, when people eat foods rich in vitamin K — such as leafy greens, broccoli and Brussels sprouts — the extra vitamin

Researchers at UC San Francisco, assessed the records of 3,875 men in a national database. The men had undergone prostate cancer surgery for localized tumors. The study showed that the stage was incorrectly assessed a whopping 35.4% of the time. An inappropriately low clinical stage was assigned in 55.1% of these cases and 44.9% of the errors consisted of an inappropriately high stage. Nevertheless, the errors didn’t seem to matter, the authors found. Even after the errors were corrected, staging did not predict the chances of the disease recurring. “Our findings question the utility of our current staging system for localized prostate cancer,” the lead author of the study, Adam C. Reese, said in a news release. LA Times

K competes with warfarin and the blood’s clotting activity can increase to unhealthy levels. In addition, many other drugs — including aspirin, Cymbalta, Flomax, Lipitor and Plavix — interact with warfarin, changing its effectiveness. “Because of these interactions, the safest way to manage warfarin treatment is by monitoring blood,” Turakhia says. Monitoring can be as frequent as every other day or as infrequent as once a month. Often, blood testing shows that the warfarin dose must be adjusted. Too much inhibition of clotting could cause bleeding problems; not enough inhibition means less protection against stroke. Dabigatran is a direct thrombin inhibitor and acts at a different step in the coagulation process. Normally, thrombin promotes clotting by making blood platelets clump and by prompting tiny fibers to grow and catch the sticky clumps. Dabigatran is not sensitive to diet or drug interactions, so patients don’t need blood testing and can take the same dose every day. This practical benefit can be huge to patients, because it reduces the burden of getting blood tests and then waiting for a provider to call back with a dose adjustment.

Plavix and Aspirin Together can Increase Hemorrhage Risk

Photo: www.multivu.prnewswire.com

What are their potential side effects? Thinning of the blood increases the risk that bleeding will get out of control, and the most concerning side effect of warfarin is bleeding in the brain. The risk of intracranial bleeding is so low that it’s hard to measure, but when it happens, the result can be as devastating as a stroke. Some experts estimate that there are fewer than five events per year for every 1,000 patients on warfarin, but the risk may increase with age and in people at greater

risk of suffering falls — and thus, blows to the head. The dabigatran trial found rates of bleeding problems were similar for both the 150 mg dose of dabigatran and warfarin — about 3% per year. But the rates of brain hemorrhage were lower for those taking dabigatran. In a subgroup of 3,623 patients who had a history of stroke, 30 people on warfarin had brain bleeding, compared with 13 in the dabigatran group. That study was published online last week in the journal Lancet Neurology.

Plavix and aspirin are sometimes prescribed together to prevent blood clots because the most popular alternative, warfarin, can lead to uncontrolled bleeding in some patients. But a new study has found the combination treatment can also cause serious hemorrhages. Researchers at the Centers for Disease Control and Prevention examined emergency room cases of bleeding related to taking drugs that prevent clotting (also called antiplatelet therapy). They found that warfarin led to more cases of bleeding, including minor bleeding from nosebleeds and minor cuts. However, the risk of a life-threatening hemorrhage was not significantly different between the patients taking Plavix and aspirin compared with those taking warfarin. Hemorrhages that occur with warfarin can be managed, but the authors said, “there remain few similar interventions” for stopping bleeding from the combination antiplatelet therapy. Doctors have long hoped for an alternative treatment for preventing blood clots, and now they have one. The medication Pradaxa, known generically as dabigatran, was approved earlier this month by the Food and Drug Administration. Other antiplatelet therapies are under investigation. LA Times

A Visit to Taipei Medical University Hospital

For more info, please contact: Sahid Sahirman Memorial Hospital Jl. Jenderal Sudirman No.86 Jakarta 10220 call centre: (021) 578 53 911 /578 53 934-39 UGD: (021) 578 53 940 SMS: 0817 01 01 911

On Head and Spine Injury By Jeannifer Filly Sumayku

and grooming. They also train people in how to use assistive equipment and braces. Social workers help in finding resources to pay for equipment, home modifications, and attendant care. Family members also receive education in assisting the injured person.

Head and spine injuries make up a small percentage of all injuries, but account for more than half of all injuryrelated deaths. From left to right: Mr. Eric Chen (from Second Secretary on Home Assignment, Department of East Asian & Pacific Affairs), Mr. Ching Hua Su, Mr. S.D. Darmono, and Suteja Sidarta.

Medical City seeks to learn and adopt the advances made by TMUH to further enhance its own medical innovations. In the future, the relationship is expected to develop into a bigger scope of co-operation that may involve the exchanges of student, expertise, knowledge, and medical staff. Jababeka Medical City plans to enlarge its network and cooperation with hospitals abroad. The Chairman of Jababeka Medical City, S.D. Darmono recently visited the Taipei Medical University Hospital (TMUH) to discuss possible cooperation with Jababeka Medical City. Jababeka Medical City will start by sending patients to

TMUH as TMUH is very competitive and offered very high quality services that of an American standard. Looking at TMUH, TMUH’s hospital is located in the middle of the Taipei City with fabulous view towards Taipei 101. It has various medical departments within the building. It is almost comprehensive that all its facilities are very modern and up to date. TMUH was founded in 1976. With extreme efforts from hospital members led by the Chairman, President and Superintendent, this hospital has expanded tremendously during the past 33 years. Currently, TMH has 3 medical buildings equipped with today’s most advanced medical technology and machinery. Medical Integration-Technology integrated medical care TMUH stresses on the holistic approach in servicing the patients’ physical, psychological, and social well being with the role of interdisciplinary medical provider. Taipei Medical University Hospital was not only built

to serve patients, it also had another calling; one that included a mission to teach and perform research. Patient centered medical service is the core value for all of our hospital staffs. In services provided to patients, the hospital will continue to recruit outstanding doctors and other medical staffs; modify working environments accordingly in order to provide all services in an efficient and convenient manner. In order to improve medical quality and provide patient safety, protocols were established through international medical service survey and ISO protocols. All of these criterions will allow Taipei Medical University Hospital to become a friendlier and convenient place for patients to relieve their pain. Having said above about TMUH advances, Medical City seeks to learn and adopt the advances made by TMUH to further enhance its own medical innovations. In the future, the relationship is expected to develop into a bigger scope of cooperation that may involve the exchanges of student, expertise, knowledge, and medical staff.

There are many types of injuries, ranging from the minor (a paper cut, for example), to the major, such as a head or spine injury. Head and spine injuries make up a small percentage of all injuries, but account for more than half of all injuryrelated deaths. “The fact is 10% of spinal injury can be accompanied with head injury. Moreover, 20-57% of spinal injury can cause injury to other organs,” said Prof. Dr. dr. Satyanegara, MD, Sp.BS on a Symposium on Sahid Sahirman Memorial Hospital (SSMH). The human spine is a flexible column composed of 33 small circular bones, called vertebrae. Flat, round disks of cartilage, called intervertebral disks, separate each vertebra. Running through the center of the vertebrae is the spinal cord. The spinal cord descends from the brain, and is the central branching point for nerves originating in the brain. Injuries to the spinal cord can cause paralysis. The ex-

tent of the paralysis depends on the location of the injury. For example, a spinal cord injury occurring in the lower back area may cause paralysis below the waist, if only the nerves affecting the lower body are damaged. However, an injury to the spinal cord at the level of the neck may cause paralysis of the entire body, or even death (if the nerves that control breathing are damaged or destroyed). A head injury is any trauma that leads to injury of the scalp, skull, or brain. The injuries can range from a minor bump on the skull to serious brain injury. Head injuries can be very serious due to the relative thinness of the skull, and the resulting risk of brain injury. Even if the skull is not noticeably damaged, a head injury can cause bleeding within the skull, or swelling of the brain. The increased pressure due to bleeding or swelling can lead to brain damage. Treatment of head and spinal injury is often done by 3 methods, namely Non-operative, Operative (Laminectomy and Spinal decompression), increasing the size of the spinal canal, relieve pressure, giving more room for the spinal cord or nerve roots), and Hospital Rehabilitations.

The symposium discussed the advanced development of science and medical techniques by introducing Minimal Invasive Neuron Surgery that is suitable for handling head and spinal injury cases. On the latest method, damage to cells that can lead to injury can be improved by using Stem Cell Therapy and IPS (Induced Pluripotent Stemcell). Rehabilitation hospitals provide several different types of specialists to help in the recovery process. Physicians who specialize in physical and rehabilitation medicine (called physiatrists) usually supervise the rehabilitation program. Physical therapists plan therapy to strengthen muscles in parts of the body that still function. Occupational therapists specialize in training individuals who have lost muscle strength or coordination to relearn the tasks of daily living, such as eating, dressing,

The symposium discussed the advanced development of science and medical techniques by introducing Minimal Invasive Neuron Surgery that is suitable for handling head and spinal injury cases. On general, the symposium was aimed to improve the quality of health services and as a breakthrough to anticipate the competitors by establishing a partnership. The specific objectives of the symposium are: • As a refreshment to doctors and participants on the handling of recent neurosurgery cases, since the treatment of head and spinal injuries require competent personnel, eligible diagnostic tools, and rapid and precise handling. • As a contribution from SSMH on technology development and transfer of knowledge. SSMH keeps spreading knowledge and information that supported by great doctors, and advanced technology. Contact Persons: 1. Drg. Yusrahma Nurina,MARS Direktur Oprasional & Marketing Phone: 021-57853911, Ext 3107 Mobile: +6287884222307 Email: yusrahma.nurina@ssmh. co.id 2. Vibriani Damaris Marketing Promotion Mobile: 087 888 01 777 5 Email: [email protected]