Mari Pangestu: The Champion of Free Trade - The President Post

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July 12, 2010
The President Post
www.thepresidentpost.com
The Economy
BI predicts forex reserves to reach US$81 billion
Darmin Nasution
ECONOMIC UPDATES
“Bank Indonesia predicts the foreign
exchange reserves would reach US$81
billion by the end of this year following
continued improvement in the country`s
economic growth,” says the central bank`s
governor Darmin Nasution last month.
Darmin said until May Indonesia`s
foreign exchange reserves reached US$74
billion and is predicted to continue to rise
following the country`s good economic
fundamentals compared to those of other
countries.
President Says No to Nuke Energy,
New Budgeting System
Developing
nuclear energy
needs thorough
considerations and
proper locations.
Photo: www.presidenri.go.id
Bank credits up 18.6 pct in June
Bank credits during June 2010
reached a total of Rp1,531.5
trillion which represented an
increase of 18.68 percent or
Rp241 trillion from the figure in
the same month last year, said
Director of Economic Research
and Monetary Policy (DKM) of
Bank Indonesia, Perry Warjiyo,
here last month.
He said loans extended in the
period January-June 2010 (year-on-year) had increased by Rp101.3 trillion or
grew 7.1 percent compared to the end of December 2009 when the figure was
Rp1,437.930 trillion.
Trade Minister:
RI may take advantage of ACFTA
Minister of Trade Mari
Elka Pangestu said Indonesia
is currently in a very good
condition to take advantage
of the implementation of
the ASEAN-China Free Trade
Agreement (ACFTA).
“I believe we will be able
to make adjustments and
maked gains,” she said during a
Mari Elka Pangestu
discussion on entrepreneurship
and ACFTA in Jakarta last
month.
She said Indonesia`s imports from China had increased from 10 percent to 17
percent in the last five years, mostly capital goods and intermediate products.
Indonesia, she added, also has a productive work force and creative
workers in a big amount with a low movable level which is attractive to foreign
investors.
President Susilo
Bambang
Yud hoyono
said the government
still
had no plan
at least in the next five years
to develop nuclear energy as
an alternative to fossil fuel to
generate electricity.
“Under the government`s
basic energy policy, we are
striving for mixed energy,
namely the combination of
fossil fuel and renewable energy,
such as geothermal,
wind, and solar energy,” he
said at a meeting with journalists
at the Cipanas presidential
palace in West Java
last month.
“Developing nuclear energy
needs thorough considerations
and proper locations.
I say nuclear power plants
are neither banned nor tabooed
but on the other hand
we still have to resolve a lot
of problems,” he said.
No to new budgeting
system
President Yudhoyono also
said there was no need to
create a new mechanism for
development budgeting as
the government already had
one.
“If House of Representatives
(DPR) members wish
a certain project should be
carried out in a region, they
can propose it. So it is the
idea that will be accommodated.
It will be complicat-
President SBY at a meeting with journalists at the Cipanas presidential palace in West Java last month.
ed if a new system is used while
the old one is still in place. Members
of the Regional Representatives
Council (DPD) can do the
same,” he told newsmen.
He made the statement in response
to a question over the socalled
aspiration funds proposal
whereby funds would be allocated
to DPR members to finance
development projects in remote
areas.
He said the government was
applying two systems with regard
to development budgeting,
adding that the budget for sectoral
development was prepared
by ministers or government institutions
while that for regional development
was drawn up by the
regions concerned.
Budget planning was done
through a number of processes
to formulate a definitive plan
for discussion by the government
and the DPR in drawing up a definitive
state budget, he said.
Yudhoyono said the aspiration
funds proposal would only dis-
rupt the existing budget making
mechanism.
Coordinating Minister for
Economic Affairs Hatta Radjasa
earlier said that if DPR members
wish to emphasize the importance
of channeling funds to
remote areas, quick funds needed
to be made available and for
that there would be discussions
in House Commissions and the
House Budget Committee.
“So it is not a problem for a
DPR member to fight for funds
for remote areas in the commissions
and the Budget Committee.
It has worked so far. In the
commissions DPR members can
also see the problems more clearly,”
he said.
The Golkar Party recently proposed
the allocation of “aspiration
funds” amounting to Rp15
billion to each DPR member to
be used for development projects
in their respective electoral regions.
The idea has drawn strong
criticism from various quarters.
Capital inflow reaches Rp2.36 trillion
Deputy Finance Minister Anny Ratnawati said that net capital inflows into
the capital market until June 2010 reached Rp2.36 trillion.
She said that besides the capital inflow, capital outflow also occurred (net
capital outflow) through the capital market, which until May 2010 had reached
Rp1.65 trillion.
State income from excises reaches
Rp26.36 trillion
State income from excises up to May 31, 2010 reached a total of Rp26.36
trillion, or 46.01 percent of the target in the 2010 State Budget.
The 2010 State Budget had set a target of an excise revenue amounting to
Rp57.29 trillion.
Compared to the excise tax revenue until May 19, 2010, there is an increase of
Rp2.66 trillion. Realization of customs tax revenues until May 19, 2010 reached
Rp23.70 trillion, or 41.38 percent of the target in the 2010 state budget.
The House of Representatives
(DPR) and the government
have agreed to revise
Law No. 22 / 2001 on Natural
Oil and Gas because a
number of clauses in the law
are considered no longer relevant.
Chairman of the House
Commission VI for investment,
trade and industry affairs
Airlangga Hartarto said
here last month that one of
the clauses no longer relevant
stipulates the obligation
to supply 25 percent domestic
needs with oil and gas.
House, Govt Agree to Revise Oil, Gas Law
But Yet to Discuss Inalum
“Hartarto said, “a special meeting
of the special inquiry committee,
committee members discussed
the adjustment between
supply and domestic demand
which was seen as no longer relevant.
Hartarto said that in the revision
of Law 22/2001, priority
would be given to national interest
and the refund of cost recovery
Ṫhe revision, he said, also concerned
efforts to reinforce the
Upstream and Down Stream Oil
and Gas Regulating Agency (BP
Migas and BPH Migas), as well
the involvement of the House in
the approval of oil and gas work
contracts, infrastructure availability
and the fixing of oil and
gas prices.
House, govt yet to discuss
Inalum
The House and government
have yet to discuss the continuation
of its almost 30-year cooperation
with Japan regarding PT
Inalum which is to end in 2013, a
legislator said.
“In the near future we will
summon the government to discuss
it,” Satya W. Yudha of the
Golkar faction in the House said
last month.
Satya said the cooperation between
the Indonesian government
and Nippon Asahan Aluminium
(NAA) of Japan should
be discussed soon, as the first 30-
year cooperation would end in
2013.
He said that there was a strong
desire from the public and the regions
that the cooperation with
Japan be terminated.
Last week, Industry Minister
MS Hidayat said the government
may offer two options to Japan.
Firstly, Indonesia will take full
control after 2013, secondly the
contract will be extended with
some renewed business schemes
siding more on Indonesia`s interest
Ḣe said that the government
had basically decided to take over
the Asahan-Inalum project in
North Sumatra, an Indonesia-Japan
joint venture.
“The Japanese has made a
business proposal for the extension
of the project, and Indonesia
will make a counter proposal because
our wish is to take over, and
the negotiating team will join the
negotiations,” said Hidayat.
Photo: The President Post/Nandi Nanti
FINANCE MINISTER:
First Semester Growth is Good
New Cargo Facility
PT Angkasa Pura II, which manages Soekarno-Hatta Airport, plans to build a new special cargo terminal with a capacity of 300,000 tons per year
at an area covering 70 hectares, making it an international air cargo airport.
Finance Minister Agus Martowardojo
said the national economy
was showing steady growth
in the first semester this year,
strengthening confidence the annual
growth target of 6.1 to 6.4
percent will be achieved.
“The picture looks good. So
there is a shared view that we can
grow between 6.1 and 6.4 percent.
So what we have achieved
so far is quite good,” he said after
attending a plenary meeting
of the House of Representatives
here last month.
He said as a member of the
G-20 Group Indonesia needs to
keep its economy sustainable,
strong and balanced in which the
ratio between debt and budget
deficit must be kept at a sound
level.
Apart from that Indonesia also
needs to build trust in connection
with issues such as how to
increase trade and investment, to
meet the Millennium Development
Goals and reduce subsidy
in the energy sector.
Photo: www.matanews.com
Finance Minister Agus Martowardojo
“The picture looks
good. So there is a
shared view that we can
grow between 6.1 and
6.4 percent. So what we
have achieved so far is
quite good.”
“We could conduct it during
the G-20 meeting, as Indonesia
hopes G-20 countries will
not limit inappropriately development
of trade and investment,”
he said.
On the national budget, Agus
said in terms of state revenue it
grew by more than two percent
over the same period last year but
he admitted that state spending
and expenditure had not been
done maximally.
“It terms of spending it is a bit
worse compared with the same
period last year. We are questioning
why spending is slower this
year than last year,” he said.
“We will start identifying the
problems. As the cabinet is still
new, programs of budget use
might change. The budget authorities
have changed. Perhaps
there have also been efforts to put
ministries in order down to regional
offices. We also think perhaps
there will be new policies
with regard to procurement or realization,”
he said.