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A4 October 12, 2011 The President Post www.thepresidentpost.com The Economy ECONOMIC UPDATES Govt to Offer Retail Bonds The government is planning to offer retail state bonds series ORI008 on October 7-21, 2011 to meet part of financing target in the revised 2011 state budget. The three-year bonds due on October 15, 2014 will be issued at a coupon of 7.30% per year, Director General of Debt Management at the Finance Ministry Rahmat Waluyanto said in a statement on Thursday. The allotment date of the bonds will be October 24, 2011 and the settlement date on October 26, 2011. Subscription to the state bonds is set at a minimum of Rp5 million and a maximum of Rp3 billion with coupon payments on every 15th of the month. "Coupon payments will for the first time be made on December 15, 2011. The coupon will be profitable because it is higher than the average deposit rate of state banks. In addition, ORI will be profitable because it can be traded," he said. He said the aim of issuing ORI008 was to meet part of the financing target in the revised state budget as well as to develop the domestic market of state debt securities by diversifying financing source instruments and expanding investor`s bases. Govt Set to Take Over Inalum The government is determined to take over the management of PT Indonesia Asahan Aluminium (Inalum) in 2013, Industry Minister MS Hidayat said here last week. "With this decision, North Sumatra will be able to become the biggest aluminum cluster," he said. He made the statement in reply to MS Hidayat a question from a Regional Representatives Council (DPD) member from North Sumatra regarding the government`s stance on the issue as the plant had been managed by Japan for the past 30 years. The minister admitted that Japan still wished and had made a relevant proposal to continue operating and managing the aluminium plant. "The government is determined to take over Inalum in connection with the ban on export of raw materials to be issued by the government in 2014," he said. He said there would be a negotiating team to discuss the matter with the Japanese. The minister however could not yet disclose more details on the government`s preparations for the planned takeover, especially with regard to the new management system or the company that would eventually run the enterprise. "I cannot yet give more details on the planned Inalum takeover but I can assure you that the government will take it over," he said. He said the country, including North Sumatra province where the aluminium production facilities were located, would obtain more benefit from their existence if they were taken over by the government. RI Exports in August Reach $18.81 billion Oil and gas exports in August reached $4.09 billion while non-oil and gas exports were recorded at $14.72 billion. IIndonesia's total exports reached US$18.81 billion in August 2011, up by 8% from the previous month. Head of Distribution and Service Statistics of the National Statistics Agency (BPS), Djamal, said here on Monday total exports in August were also up by 37% from the same period last year. Oil and gas exports in August reached $4.09 billion while nonoil and gas exports were recorded at $14.72 billion. "Oil and gas exports rose 7.59% while non-oil and gas exports 8.12% from the previous month," he said. Djamal said most of the country`s exports in August went to China worth $1.92 billion, followed by Japan ($1.53 billion) and India ($1.39 billion). "Exports to the three countries comprised 32.89%," he said. Cumulatively the value of exports from January to August 2011 reached $134.85 billion or rose 36.58% compared to the same period last year. In the period the value of non-oil and gas exports reached $107.37 billion with mineral fuels, fat and oil contributing the largest respectively at $16.97 billion and $13.96 billion. Exports of oil and gas in the period were recorded at $27.47 billion with gas and crude oil exports contributing the biggest respectively at $15.36 billion and $8.76 billion. Djamal said Indonesia`s imports in August were recorded at $15.05 billion, down 7.12% from the previous month. Nonoil and gas imports dropped by 9.37% to 11.25%. The biggest non-oil and gas imports consisted of electronic goods worth $2.09 billion. Although imports were lower their value was still higher that the previous month`s. Cumulatively imports from January to August 2011 rose 30.90% to $114.84 billion from those of the same period last year. Non-oil and gas imports in the first six month period of 2011 were also up 25.18% from those of the same period last year to $87.99 billion. China was the biggest supplier if non-oil and gas imports comprising 18.61% of the market share worth $16.37 billion. Japan followed in the second place with exports worth $12.10 billion and Singapore in the third place with exports worth $7.07 billion. RI's Economic Growth to Reach 6.6% in Q3: Minister The Indonesian economy during the third quarter of 2011 is believed to have reached a growth rate of 6.6%, Finance Minister Agus Martowardojo said. Speaking at the Asian Roundtable on Corporate Governance here on Monday he said the projection was based on growth in the investment and consumption sectors which had been the biggest contributors to economic growth for some time. "I think if growth in the investment and other sectors in Indonesia are maintained at the rates we have seen lately it is likely that Indonesia`s economic growth may reach 6.5 to 6.6% in Q3," he said. In annual terms however the The House of Representatives (DPR) has approved the government-proposed budget allocations of Rp45 trillion for electricity subsidy in 2012. All factions in the House Commission VII expressed their approval of the proposal at a working meeting with Energy and Mineral Resources Minister Darwin Saleh here last week. However, the House Commission gave notes to the government`s proposal to raise basic electricity tariff by 10% effective April 1, 2012. The House asked the proposal for electricity tariff hike to be re- Finance Minister Agus Martowardojo minister still holds to the revised budget assumption of 6.5% in view of the unpredictable impact of the current European economic crisis. "We are indeed concerned over current global economy whose growth has been revised from 4.4% to 4.0%," he said. The minister also warned of a global economic slowdown that House Sets Electricity Subsidy At Rp45 trillion for 2012 viewed. The government proposed an electricity subsidy of Rp45 on assumption that basic electricity tariff would increase by 10% effective April 1, 2012. However, the policy did not apply to incapable customers with 450 VA. With the 10% increase, the electricity tariff would go up to Rp796 from Rp726 per kWh. The electricity subsidy of Rp45 trillion would consist of Rp40.5 trillion from subsidy in the current year, a shortage of Rp4.5 trillion based on the results of audit by the State Audit Board, and Rp4.5 trillion from the transfer of subsidy from 2012 to 2013. could continue until 2012 to make the growth to reach only 3.0%. "We know that a lot of banks in Europe especially are facing liquidity and confidence problems, having portfolio in Asia including Indonesia and so we must prepare ourselves well," he said. In view of that the minister said he could not as yet confirm whether or not the 6.7% growth assumption for the 2012 draft budget would be changed. He said however if global conditions remained uncertain and affected badly on the country`s economy the government would consider proposing a change in the growth assumption in the budget ahead of schedule. The assumed subsidy was among others based on the rupiah`s exchange rate of Rp8,800 per dollar, oil price of $90 per barrel, and electricity sales of Rp172.8 trillion. Achmad Riyaldi of the House Commission from the Justice and Prosperous Party (PKS) said the budget allocation of Rp45 trillion accorded with the spirit of lowering power subsidy in stages. Electricity subsidy is expected to reach Rp65.5 trillion for 2011. "We have agreed on the budget allocation of Rp45 trillion but not the increase in electricity tariff because we still have another alternative," he said.
www.thepresidentpost.com The President Post October 12, 2011 A5 The Economy Economist: RI Needs to Grow By at Least 9% To achieve a 9% growth infrastructure had to be improved. AAn economist said Indonesia needs to grow minimally 9% percent in 2015. A growth of 6.5% would not as yet guarantee a better life for the Indonesian people, the observer, M. Chatib Basri from state University of Indonesia, said in a CIMB Niaga Economic Outlook Conference here on Wednesday. He said Indonesia needs to grow minimally 9% in 2015 considering global volatility and future challenges. "A target of 6-7% growth I am convinced we could realize without government intervention. The problem is the target is not sufficient. We need growth at nine percent levels," he said. M. Chatib Basri He said if Indonesia could grow at only 6-7% people would be trapped into a potential poverty because it would not be able to catch up with the emerging markets. He said because of the large population in the working force category it would be easy for Indonesia to grow by 7% because domestic consumption rate is high, he said. "That is why companies like Astra or Unilever can grow well in the middle of current crisis. So without government efforts we could grow," he said. To achieve a 9% growth Chatib said infrastructure had to be improved. With the settlement of infrastructure problems logistic obstacles that have so far hindered domestic trade would be overcome, he said. "Why doesn’t Astra want to build a plant here? It is because the logistics cost between regions is far higher than the cost of imports. So, if the problem could be overcome I believe a 9% growth is not impossible to achieve," he said. FISH LANDING BASE: The government wants to build a Fish Landing Base (PPI – Pangkalan Pendaratan Ikan) at Muara Angke and Muara Baru, North Jakarta in 2013. PPI is expected to be the same as those in Japan: a nice fish base that is large, clean and hygienic. The President Post/Nandi Nanti Govt Targets 5% Growth in Annual Rice Production The government is targeting an annual 5% growth in rice production to achieve a surplus of 10 million tons in 2014-2015, a minister said. "A road map was discussed just now to achieve the production growth with each region setting an average annual 5% growth," chief economic minister Hatta Rajasa said after a coordination meeting on food here on Thursday. www.beritabatavia.com North Maluku (Malut) Governor Thaib Armayin said the province is expected to become a nickel industry center as two nickel plants worth Rp84 trillion would be built in Halmahera island. "The two nickel industries will be built by consortium PT Aneka Tambang and PT Weda Bya Nike," the governor said North Maluku to Become Nickel Industry Center in his address on the occasion of North Maluku province`s 12th anniversary here on Wednesday. The governor said that the two nickel industries which were expected to be operational before 2020 would provide a big contribution to the regional original income (PAD) in the form of royalty and other form of receipts. Thaib said that the nickel industry will also provide jobs for locals and boost the growth of other business sector in the region such as transportation and trade. He said that the province also plans to build a big fish processing industry with an investment of Rp32 trillion. The fish industry is located in Pulau Morotai district and is built through a `mina politan` (urban- based fish cultivation) program from the Ministry of Maritime and Fisheries Affairs. "If the nickel and fish industries are already in operations, Malut will become one of the economic growth centers in Indonesia whose contribution would be enjoyed not only by the people of Malut but also of other provinces," the governor said. Hatta confirmed the government had prepared an investment plan to open new agricultural lands and build dams as an irrigation facility involving state enterprises. "We will ensure the availability of the funds and create synergy among state enterprises that are already working now. Efforts to increase food production with the synergy of state enterprises are already underway. The forestry minister has prepared the land and in the future two million hectares more will be made available," he said. Chief Economic Minister Hatta Rajasa "A road map was discussed just now to achieve the production growth with each region setting an average annual 5% growth." Regarding present food supplies, Hatta said the national rice and food stocks were sufficient cuasing inflation in September to remain low at only 0.27% and 2.69% annually. "Our food stocks are sufficient to meet the need of all regions. There is no shortage. Stocks controlled by the National Logistics Agency (Bulog) are also sufficient. As you know, these conditions have kept the inflation rate low," he said. Hatta said the government had taken anticipatory measures to meet the upcoming dry season by preparing food resilience and food stabilization funds. Until now, Hatta said, the government had already used Rp1.3 trillion of the food stabilization funds totaling Rp3 trillion to safeguard food resilience. "We have used just Rp1 trillion for rice for the poor program and Rp300 billion for anticipatory measures against harvest failures. So we still have enough funds to overcome problems caused by production disruptions," he said.
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