February 9th , 2009 - IFCCI -

The World Needs to update the way it thinks about Indonesia

Source: Newsweek Jan 19th, 2009

Public markets to have new regulations

JAKARTA- With the new bylaw on private markets soon to be implemented, many things need to be put on hold, says an official with the city agency for small and medium enterprise, and trade.

"The bylaw is still being discussed by all the stakeholders, and I hope it will be ready this month," said the agency's head, Ade Soeharsana, on Friday."The regulation will give everyone fair opportunity."We have restraint permits for new convenience stores or foreign franchises planning to enter the city," Ade said."Four hundred of them have been waiting in line since 2006."

This is in accordance with the 2006 Jakarta Governor Instruction on convenience store permits.

Rudy Sumampouw, general secretary of the Indonesian Association of Retailers (Aprindo), said, "We hope the regulation will accommodate everyone's needs - big retailers as well as small ones."

Retail stores are mushrooming in Jakarta with 126 retail franchises and 149 convenience store chains, not including franchises.

North Jakarta has 9 different convenience store chains, West Jakarta has 58, Central Jakarta 23, East Jakarta 34, and South Jakarta 25, the agency said.

Karen, first woman to run state-owned Pertamina

Karen Agustiawan has become the first woman to step into the position of president director of state oil and gas company PT Pertamina.

The country now waits for her strong leadership to turn Pertamina into a world-class company.

The 50-year-old woman believes Pertamina has the potential to grow to be a world-class oil and gas company, once its employees think globally and company is free from intervention. She said she would “reject it at any cost” if there was any intervention that would harm either Pertamina or the country. When asked what it was like to be the first female top executive, she said, “It was just ordinary, nothing too special or overwhelming.”

In fact, being the first woman to hold a high organizational position is not something new for Karen. The public came to know her in March 2008 when she was appointed the position of Pertamina’s upstream director. Her first encounter with the oil and gas industry was 1984, right after she graduated from the Bandung Institute Technology (ITB), majoring in engineering of physics.

Karen has experience working in big oil and gas companies, including giant oil producer Mobil Oil, now ExxonMobil, and the world’s second largest oil field services provider, Halliburton Co.

She was the first Indonesian woman hired by Mobil Oil, where she worked for 14 years. During her time at Mobil, Karen held several positions including system analysts and programmer to develop reserve calculation, seismic processor and quality controller systems for several seismic projects. She was also project leader of the exploration computing department.

In 2002, she became the first Indonesian women hired as a commercial manager by Halliburton’s Indonesia unit. “In international oil companies, having women as their top executives is a very common practice,” Karen said.

In leading Pertamina, Karen will share responsibility for the company with Omar Sjawaldy Anwar, the  newly appointed vice president director. Omar was appointed CEO of mining giant Rio Tinto in August last year. “I accepted the offer [of vice president director] because it was an order from the country and I wanted to serve my country,” he said.

The government appointed Omar because his experiences in business and finances were expected to complement Karen’s expertise in technical matters. “We expect Pertamina to lead both the international and domestic markets. We will evaluate the strength and the weaknesses of the company,” Omar said. Before joining Rio Tinto, Omar was state-run Bank Mandiri’s director of consumer finance.

Shell may manage Natuna block with conditions: BKPM

Chairman of the Investment Coordinating Board (BKPM) Muhammad Lutfi said Saturday the Dutch oil company Shell might up their chances at managing the exploration of Natuna D Alpha block should they decide to shift their fuel refining from Singapore to Indonesia.

"If Shell were to accept our proposal that they move their fuel refinery operation from Singapore to Indonesia, I guarantee Shell would have greater bargaining power visà-vis other [companies]," Lutfi said, as quoted by Antara news agency Sunday.

Lutfi, who is on an official visit to the Netherlands with Vice President Jusuf Kalla, added that Dutch Prime Minister Jan Peter Balkenende had previously expressed interest in Natuna D Alpha's exploration on behalf of Shell.

Located in the Riau Islands, the Natuna D-Alpha block is estimated to contain 46 trillion cubic feet of gas, making it the biggest reserve in Asia. However, the block also sequesters a large portion of carbon dioxide, making exploration challenging unless it is handled by energy companies with advance technology.

Four international oil companies were reported to have expressed interest in developing the Natuna D Alpha gas project in partnership with state-owned oil and gas company Pertamina, including a Chinese and a European company.

The government has yet to decide on Natuna's new patron, Lutfi added. Lutfi noted that the requested refinery shift would create 930,000 new jobs for Indonesia. 

Vice President Jusuf Kalla said the Dutch government has asked Indonesia to help maintain relations between Western and Muslim countries.

"Dutch Prime Minister Jan Peter Balkenende said Indonesia can play an important role in maintaining ties between western and Muslim countries," the Vice President said after a meeting with Balkenende on Saturday, as reported by Antara on Sunday.

"The Dutch prime minister may have asked Indonesia to become a bridge. But I also asked that they [the West] should adopt a fair attitude," Kalla said. He added that apart from Balkenende, US Vice President Joe Biden and the Belgian deputy prime minister had also asked Indonesia to step in as an intermediary and mend relations.

Government issues regulation on campaigns through SMS

Surabaya, East Java - Minister of Communications and Information Mohammad Nuh said here on Sunday that he had introduced a regulation on campaigning by short message services. "I did not remember it contents, but it was already in place and effective as of this week," he told ANTARA after dedicating an Al Azhar international elementary school.

The minister said the regulation would enliven political campaigning for the legislative election on April 9 and presidential election later in July. "We will help exploit information technology for the legislative as well as presidential election campaigns," he said. He said the regulation had already been introduced to political parties, the General Elections Commission, telecommunications operators and the mass media. "The use of the messaging service in campaigning will reduce threats of rioting, anarchy or violences as campaign messages are through various telecommunication service providers and thus reducing mass mobilizaton," he said.

The minister`s special staff, Sukemi, meanwhile said that basically the regulation prohibited attacks and therefore required registration of people who wished to receive campaign messages from political parties or legislative candidates and it also banned fund-raising through the service.

"So, political parties, legislative candidates or presidential or vice presidential candidates cannot just conduct short messaging because they could be sued later as their message could be categorized as a spam. They are only allowed to send messages upon requests from the people," he said.

He said the information and communications technology could not only be exploited for short messaging but also for multimedia messaging service, premium message service, ring tone and ringback tone services and telephone/multimedia value added services. "All the facilities could be used right now except during a cooling-down period later," he said.

He said political parties or legislative candidates who were interested for the service could apply to content providers by submitting special codes for access by clients. He said clients had a right to cancel their registration although they had already registered for the service, adding campaign messaging services by outsiders were not covered.

US secretary of state Hillary to visit Jakarta

Jakarta - US Secretary of State Hillary Rodham Clinton will visit Jakarta on her working visit to some Asian countries in a bid to strengthen US relations.

In her first foreign visit after her appointment as the US Secretary of State, Clinton will leave Washington DC for Asia on February 15, 2009, a release from the US Embassy office said here on Friday.

First country Hillary will visit is Japan (on Feb 16-17) followed by Indonesia (on Feb 18-19), South Korea (on Feb 19-20) and China (on Feb 20-22).

In the capitals of those Asian countries, Hillary will discuss some general approaches on various challenges faced by international community such as the issue on capital market, humanitarian issue, security and climate change. "Hillary`s visit at the beginning of Obama`s government shows how important Indonesia to the United States is," US Ambassador to Indonesia Cameron R Hume said. "She will exchange ideas on US-Indonesia relations which continue to develop including cooperation in various field like education, regional security, environment, trade and health," he said.

Hume said that Hillary hoped to directly see how Indonesia has changed into a stable, moderate and democratic country in ASEAN region. Hillary will also have consultations with some of Indonesian power elites to discuss close partnership with this world largest archipelagic country and perspectives on a joint interest in Southeast Asia.

This US Secretary of State will have to end her tour by visiting China in which she has been scheduled to meet with some high ranking officials in Beijung to improve cooperations of the two countries.

BI to reduce CAR for establishing Shariah commercial banks

Jakarta - Bank Indonesia plans to reduce the capital adequacy ratio (CAR) for conventional banks wishing to set up a shariah commercial bank through a spin-off from Rp1 trillion to Rp500 billion as of March, the director of the central bank`s directorate, Ramzi A Zuhdi, said here on Sunday.

"According to the current Bank Indonesia Regulation (PBI) the CAR for establishing a shariah commercial bank is Rp1 trillion but later we will reduce it to Rp500 billion for shariah commercial banks established through a spin-off," he said. He said the regulation was now being finalized. "It is expected to be completed next month at the latest," he said. He said it was hoped the new regulation would be able to promote growth of shariah bank assets currently standing at 2.1 percent of those of conventional banks.

Shariah economic observer Gunawan Yasni hailed the central bank`s decision. "In order to promote the growth of shariah banks an incentive is indeed needed," he said. He said besides reducing the capital requirement Bank Indonesia could also give an incentive. "In Malaysia an incentive in the form of a tax exemption for several years will be given to those wishing to set up shariah banks or insurance companies. In Indonesia it will be difficult to do it because it requires discussions by the government and the House of Representatives. However BI could give an incentive by reducing the risk weighted assets (ATMR) for shariah banks," he said referring among others to an ATMR for products such as shariah housing credits.

He said a shariah housing credit was repaid in fixed instalments without interest making its risk more manageable than that of the conventional bank product. "So, the ATMR in shariah banks must be reduced for example 25 percent as the ATMR for conventional banks whose risk is up and down is valued at 50 percent," he said. He said if incentives like them could be implemented conventional banks that had shariah units could be able to promote their shariah financing. "And this could spur spin-offs after the reduction of the capital requirement," he said.

The president director of BNI, Gatot M Suwondo, meanwhile said his bank was expecting the new BI regulation for the establishment of a shariah bank. He said his bank would immediately spin off its shariah unit as soon as the regulation was issued. He said BNI was currently processing the establishment of a general shariah bank in cooperation with the Islamic Corporation for the Development of the Private Sector (ICD).

The two had signed a memorandum of understanding for it. Gatot said the spin-off was part of the bank`s plan for the establishment of shariah banks in cooperation with the ICD.

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