Friday, November 15, 2013


Tuesday, October 22, 2013
Survey reveals most complain about SBY’s work in economy, law
The Jakarta Post, Jakarta | National | Sun, October 20 2013, 6:42 PM
A national survey found that 51.2 percent said that they are unsatisfied with President Susilo Bambang Yudhoyono and Vice President Boediono’s job performance.
The survey conducted by the Pol-Tracking Institute found that most of the respondents were unhappy with the SBY cabinet’s work in the economy.Pol-Tracking Institute executive director Hanta Yuda said 71 percent of the Indonesian people are dissatisfied with the government’s performance in the economy.
Their dissatisfaction in the field of the economy had been clearly reflected in their perspective on the basic commodity prices that had skyrocketed over the last several months,” said Hanta in a press conference on SBY-Boediono’s job evaluation survey in Jakarta on Sunday as quoted by from the economy, Hanta added, the majority of the respondents in the survey were also dissatisfied with the government’s job in the field of law. 58 percent of respondents complained that they were not satisfied with the outcome of law enforcement in Indonesia.
According to Hanta, such judgment emerged as the National Police, the Attorney General’s Office (AGO) and the Corruption Eradication Commission (KPK) were unable to show a synergy in completing investigations on big graft scandals.
A growing number of public officials that had been arrested for their alleged involvement in graft cases had created a certain public perception on the governments job in the field of law,” he went on.The survey further revealed that 46 percent of respondents are dissatisfied with the law enforcer’s work on maintaining security.
Hanta said recent shootings of police officers had left people worrying about the nation’s security. “It is important because it seems that police, the symbol of security in this country, had been paralyzed. Moreover, people feel that criminality levels in certain areas are still high,” he said.
Based on the survey, the SBY-Boediono administration is appreciated in two fields: education and health. (ebf)

Mulyani :
Sound Economic Legacy Priority for 2014 Transition:

The Jakarta Post | Discourse | Mon, August 26 2013, 9:42 AM
Former finance minister Sri Mulyani Indrawati, who has since 2010 served as World Bank managing director, has left an exceptional legacy of keeping the economy relatively unscathed from the severe impact of the 2008 US-triggered global financial meltdown. The Jakarta Post’s Rendi A. Witular and Tassia Sipatuhar recently talked with the reform icon on how policymakers should respond to the current economic turmoil. Here are excerpts of the interview:

Question: Do you think the policy settings to respond the current economic turmoil are on the right track?
Answer: The impact from the slowing growth in China has significantly affected Indonesia’s economy and the rest of the world. We are impacted by the slowing demand from China, particularly on our exports of raw materials.

Indonesia has actually felt the pinch of exports slowdown during the global crisis in 2008, but then we could quickly change our growth model to rely on domestic demand that turned out to grow faster than the available supplies.
If we see the macro side today, there are pressures toward our balance of payment as imports have outpaced exports due to our growing consumption. The country booked a record current-account deficit that is very high, particularly in the second quarter.

In the last year, the government has responded from the fiscal and monetary settings by trying to stimulate domestic demand, keeping inflation low and stabilizing the exchange rate.
But the level of their response needs to be enlarged. The deteriorating external factor is faster than our response. If we want to ensure stability, weakening growth will be inevitable in the short term. The World Bank has revised its growth forecast to 5.9 percent from the 6.2 percent.

Pressures from inflation and the exchange rate will rest on the state of our current account. This has created a challenge on the macro-policy side.
This may be the first time in several years that Indonesia will have macroeconomic issues as its dominant concern. For the last three years, Indonesia has enjoyed a stable and sound macroeconomic environment that enabled policy makers to focus on accelerating growth through infrastructure and aggressive fiscal spending.

But now, the administration only has around one year left, which should be spent focusing on leaving a sound economic legacy. This will obviously require more ambitious anticipative policies as the situation worsened.
Policy coordination between the central bank, the finance ministry and the Financial Service Authority (OJK) will be the most important in the next 12 to 18 months.

The policies should also respond to anticipation of the changes in administration (in 2014).
So policymakers seem to be unable to respond precisely to the pressures?
The level and the speed of the policies need to be improved. When we anticipate the impact of the fuel price increase, there should have been an immediate change in policies. At the time there was also an external factor at play over the US quantitative easing. Have the policymakers responded to such challenges timely and at a level deemed precise?

Maybe policies that raise the interest rates and intervening in the currency market are on the right track. But the question is whether the level of the policy is sufficient and at the exact time to address the magnitude of the problem.
Thus, there should also be policies from the fiscal side. But the impacts of fiscal settings are too slow because the capacity to spend (the state budget) will require some time.

Pressures from the inflation due to food prices are actually unnecessary. The prices could actually be eased through export and import policies.
Imports of food should have been accelerated to ease the prices given several impediments that could be counted ahead, such as the seasonal Idul Fitri holiday festivities and anxiety over exchange rates.

In anticipation of future pressures, we should observe the cycle of demand. The growth in demand from our middle class is extremely fast and consistent compared to 10 years ago. Now, consumption of the middle class has become a real pressure for our balance of payment as more imports have to be made due to the soaring demand.

Consumption of our middle class is not in line with the increase in domestic productivity. What kind of policies suit best to address this problem?

First, there is a policy that creates the perception of stronger purchasing power through fiscal settings in the form of wage rise for civil servants This also includes huge spending for teachers. Like it or not, this has added to the purchasing power of the people. The impact is massive throughout Indonesia. Second, an easing in quantitative monetary policies has created a condition of liquidity availability. This has rendered people to gain easier access to credit.
There is indeed a structural problem in our productivity. There are many worrying indicators over the competitiveness of Indonesia’s labor-intensive manufacturing sector.

Indonesia is in a difficult position to compete. When China changed its policy toward consumption-driven economy by raising its wages, thus eroding its competitiveness, many foreign direct investment shied away from China and flowed into the region.
But Indonesia is not in a better position to tap the opportunities. In comparison with Malaysia and Thailand, Indonesia fares worst as it has not upgraded its value added in the supply chain. The two countries have stronger supporting factors that include education, technology and a global network.

With all such shortages, Indonesia does not deserve the level of wage earned by workers in Thailand and Malaysia. There are suggestions that we should tap the basic labor-intensive manufacturing. But in this segment we are confronted with Vietnam, Bangladesh, Cambodia and Nepal that have competitive edge in labor wages than us. The homework that we are facing is very structural from the issues of labor policy, education, skill and the composition of our economy that heavily leaned on services and construction.

What are the policies best taken until the changes in administration in 2014?

The policy that is available for the current administration in the fiscal side has already been outlined by the President and is already included in the state budget. The concern is more policy issues stemming from an uncontrollable situation. This includes fuel subsidy and spending for the interest rates of government bonds.

In terms of our bonds, we have seen the yields soaring that will lead to problems in terms of higher costs of bonds. These costs are higher compared to those for education, health and infrastructure.
For the fiscal side, the best thing for this administration before ending its tenure is to execute fiscal policy in a timely way. We could not change the structure. We could revise the budget, but sometimes it would result in governance problems.

For the monetary side, the best way is to focus on returning the expectation of inflation to its lowest point. Now core inflation has already exceeded the central bank’s expectation. If we could bring it down to below 5 percent, excluding the seasonal high inflation, it will require a very tight monetary policy.
We just have to accept that the economy will not grow as high as three years ago. If we talk about growth below 6 percent then the question will be on how
low could it go.

More homework that should be done is structural reform that includes improvement in investment climate and trade policies. This will accelerate improvements in the macroeconomic side and could also smooth out transition to the next administration.
Indonesia is actually fare better compared to others (emerging economies). Brazil, for example, is struggling hard to grow by 2 percent. If Indonesia could grow below 6 percent, I think we should not be devastated. The quality of growth should be improved. That should be the legacy of the current administration.

In Indonesia, public opinion can condemn you to death

Endy Bayuni, The Jakarta Post, Jakarta | Commentary | Sat, October 12 2013,
Death to judge Akil Mochtar!
The former Constitutional Court chief isn’t going to be condemned to death after he was caught red-handed taking bribe money at his house in Jakarta this month. But public rage, steered by both his predecessors in the court, Jimly Asshiddiqie and Mahfud MD, called for his blood.
Since the Corruption Law prescribes life imprisonment as the maximum punishment, the judge can rest in peace that even if the court should find him guilty he would be spared from the gallows, notwithstanding public opinion.

But no such luck for a number of drug offenders and premeditated murders on Indonesia’s death row. Their fate to a large extent depends on public opinion.
Four people have been executed this year and six more will follow before the year ends, according to Imparsial, an NGO on the frontline fighting to abolish capital punishment.
Indonesia in March resumed sending people to the firing squads. Five years ago, it executed 10 people, including terrorists, serial killers and drug traffickers, before joining dozens of other countries to observe a moratorium on executions.

The five-year gap is no coincidence.
Both 2008 and 2013 are years before the country’s general election.
The government is coming under strong pressure from public opinion to execute some of the more than 120 people who have been sentenced to death. Questions keep surfacing about why the government is holding back even for those who have exhausted all legal means of reprieve.

With the public angry by the endless news of massive drug trafficking and horrifying stories of serial murders, opinion is very much on the side of meeting more death sentences and their executions.
The movement to abolish capital punishment in Indonesia faces an uphill battle against public opinion.

On Thursday, a handful of people in this country observed the 11th European and World Day against the Death Penalty. Most people were unaware, or even cared about the cause. International Batik Day on Oct. 2 attracted much better awareness.
The Italian Cultural Institute and the European Union (EU) office in Jakarta organized a discussion, attended by no more than 30 people, on Thursday. There should have been more, but a busload of law students from the University of Indonesia (UI) got held up by traffic and arrived late.

Italy’s role in the international campaign is based on history.
The state of Tuscany became the first political entity in the world that abolished the death penalty in 1786 after jurist and philosopher Cesare Beccaria wrote a book showing there was no correlation between the death penalty and criminality.
The absence of a deterrence effect remains the chief argument used today for abolishing capital punishment. The other is the finality of the sentence, with no possibility of redress if there is a miscarriage of justice.

Europe is leading the global campaign. With the exception of Belarus, all European countries have removed the death penalty from their books. The EU each year presents a resolution at the UN General Assembly calling for the abolition of the death penalty or its moratorium as part of its human rights policy.

Indonesia, which retains the death penalty along with more than 60 other countries including the United States, abstained on the resolution in 2012. It had fully observed the moratorium call since 2008, but all that changed this year.

A window of opportunity has presented itself for the small band of anti-capital punishment campaigners with more Indonesians being executed for crimes abroad like Malaysia and Saudi Arabia with large concentrations of Indonesian migrant workers. They have been convicted either for murder or drug trafficking. According to Imparsial, there are more than 420 Indonesians lingering on death row abroad.
A campaign is underway to save 21-year-old Wilfrida Soik, who is on trial for the murder of her Malaysian employer and who could possibly be sentenced to death. The Malaysian court last week agreed to extend the trial after intervention from the Indonesian government, politicians and advocacy groups.

Indonesian diplomats who have to make the plea for stay of executions of Indonesians said Jakarta’s policy of carrying out the executions was not making their job easy. They could only plea on humanitarian grounds, but they can’t expect sympathy from foreign governments if Indonesia fails to show compassion for its own criminals.

Imparsial said Indonesia was close to abolishing the death penalty when the Constitutional Court voted on the issue in 2008.
The vote was 5-4 in favor of retention, but before the final vote, the position was 4-5. One of the judges changed position at the last minute, knowing that abolishing capital punishment would not have gone down well with the public then, and probably now.

Judges, like religious leaders and politicians, tend to go along with public opinion. Hardly anyone who really matters in this country is speaking against the death penalty or wants to take the lead in the campaign.
The way the public conducts the debate, the death penalty is an emotional issue in Indonesia as it is in many parts of the world that have abolished it.

In secular Europe, it is driven by the passion to save lives. In the supposedly more religious Indonesia, it is driven by the spirit of vengeance, and not by compassion which all major faiths teach.

China’s GDP Rebound Good News for Indonesia
Satria Sambijantoro, The Jakarta Post, Jakarta | Headlines | Sat, October 19 2013, 11:22 AM
Surprisingly China powered ahead and recorded gross domestic product (GDP) growth in the third quarter (Q3) this year in an announcement that could be a positive catalyst for Indonesia’s languid exports and bolster its decelerating economy.
China announced on Friday that its economy expanded by 7.8 percent in Q3, the fastest pace this year, something Indonesia would welcome as it exports billions of dollars of goods there, mainly commodities such as palm oil and coal.

“A slowdown in China is a major worry for many emerging market economies,” Finance Minister Chatib Basri said, noting that deceleration would result in lowered demand for energy and commodities: Affecting prices and hurting commodity-exporting countries such as Indonesia.
“The fact that China grew by 7.8 percent — well above the forecast of 7 percent — will improve our exports and have a positive spillover on our current account,” the minister explained.

China had enjoyed double digit growth — growing by 10.4 percent just three years ago — but its economy was hit by an overreliance on exports and investments.

The world’s second-largest economy only grew by 7.5 percent in the second quarter this year, the slowest pace since the 2009 global recession.
During the Asia-Pacific Economic Cooperation (APEC) Summit in Bali this month, China President Xi Jinping calmed concerns over the slowdown. The president said that he was “fully confident about the future of China’s economy, saying the country was merely undergoing a ‘profound transformation of growth model and structural adjustment’”.

Xi said that the prosperity of APEC members depended on China, adding that both his country and its neighbors in the Pacific region could not grow in isolation.
China is the number one destination for Indonesia’s exports, accounting for US$13.3 billion, or 13.5 percent, of total shipped goods from the archipelago in the January-August period this year, data from the Central Statistics Agency (BPS) shows.The strong economic linkage between the two countries means that a 1 percent deduction of economic growth in China could slow Indonesia’s economy by up to half a percent, according to the International Monetary Fund (IMF).

Indonesia expanded by only 5.8 percent in the second quarter, its slowest pace in more than two years, this sluggish economic performance was attributed to the country’s languid exports due to the weak global demand.
Bank Indonesia (BI) Governor Agus Martowardojo warned over more severe threats of capital outflows if emerging countries such as Indonesia, China and India continued to see sharp growth slowdowns.
“The fact that emerging countries are experiencing a slowdown while developed countries are recovering, reverses the direction of global capital flows, eventually exerting pressure on currencies, notably the rupiah,” the central bank
governor said.

Economists, however, were skeptical that the rebound in the Chinese economy would significantly boost Indonesia’s exports and, consequently, its economic growth.
Official data shows that Indonesia’s exports actually grew in terms of quantity, but the low commodity prices meant that export value remained low, consequently putting pressure on the earnings of local exporters.
“The negative impact of lower commodity prices cannot be offset by the growth in volume of exports to China,” Fauzi Ichsan, a Jakarta-based economist with Standard Chartered, said on Friday, adding that there were no signs of recovery for global commodity prices in the short run.

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China emphasizes the significance of RI ties
The Jakarta Post | Discourse | Wed, October 02 2013, 10:17 AM
China’s President Xi Jinping, arriving today in Jakarta for a two-day state-visit, has chosen Indonesia as the first country to visit in ASEAN, highlighting the symbolic importance of the relationship that has existed between the two countries since diplomatic relations were established more than 63 years ago. Below are some excerpts from an interview with President Xi with selected media, including The Jakarta Post’s Yohanna Ririhena, on the bilateral ties and ASEAN-China relations.

Question: Indonesia is the first stop on your first visit to Southeast Asia as Chinese President. What are your expectations for the visit?

Answer: Indonesia is a beautiful country, known as the ‘Emerald of the Equator’. Indonesian folksongs such as ‘Ayo Mama’ and ‘Sing Sing So’ are very popular in China. I was in Indonesia some 20 years ago, and was deeply impressed by the dynamic growth of this country, which was called one of the four
‘little tigers’ in Asia.

Since the end of the 20th century, Indonesia has worked hard to recover from the impact of the Asian financial crisis and ride the international economic crisis, and has turned itself into a remarkable emerging market economy with political stability, economic growth, social progress and ethnic harmony.

It has been 63 years since China and Indonesia established diplomatic relations. Our bilateral ties have traversed an extraordinary course. Since the start of the 21st century, particularly since the establishment of the strategic partnership between the two countries in 2005, our dialogue and cooperation across the board have embarked on a new journey of comprehensive and rapid development. Between 2005 and 2012, the two countries put in place multi-tiered and multi-field cooperation mechanisms, including deputy prime-ministerial dialogues, defense consultations and maritime cooperation.

Two-way trade grew by four times to US$66.2 billion, while China’s direct investment in Indonesia increased 10 times to $2 billion; and personnel exchanges between the two countries increased three times to 1.33 million people. Our two countries have also worked closely on regional and international affairs, effectively safeguarding the common interests of developing countries.

Both China and Indonesia are major developing countries in the region, and their strategic cooperation carries great significance and boasts broad prospects. The purpose of my state visit to Indonesia is to carry forward our traditional friendship and plan for our future collaborations. I look forward to an in-depth exchange of views with President Susilo Bambang Yudho-yono on ways to advance our friendship and cooperation on all fronts and bring China-Indonesia relations to a new high.

How do you see China–ASEAN relations developing over the next 10 years, including the handling of the South China Sea issue?

China and ASEAN countries are linked by the same mountains and rivers and live alongside each other like members in one big family. The friendly exchanges between the two parties date back many years. This year marks the 10th anniversary of the China-ASEAN strategic partnership. The relationship has already gone beyond a bilateral scope and, as the bedrock for a prosperous and stable East Asia, taken on important regional and global significance.

Pursuing a foreign policy of fostering friendship and partnership with its neighbors, China is committed to providing more benefits to surrounding areas via its own development. We will unswervingly make ASEAN a priority in our neighborhood diplomacy, deepen our strategic partnership with ASEAN, and work with ASEAN to safeguard peace and stability in this region, including in the South China Sea. As for the differences and disputes between countries, China has always stood for proper resolution through friendly negotiations and dialogue, and we will work unremittingly to this end. China will continue to support ASEAN’s development, its community building and its centrality in East Asian cooperation.

I suggest that the two sides need to work on the following in the immediate future: First, maintain high-level exchanges, enhance strategic communication and promote mutual trust. Second, elevate the level of the China–ASEAN Free Trade Area by opening up our markets. Third, promote connectivity, establish an investment and financing platform for infrastructure development in Asia and resolve the bottlenecks in this area. Fourth, give a greater role to the China–ASEAN Maritime Cooperation Fund and carry out results-oriented maritime cooperation. Fifth, deepen defense and security cooperation, improve the mechanism for meetings between defense ministers of China and ASEAN countries, and actively promote exchanges and cooperation between law enforcement and security authorities. Sixth, step up people-to-people exchanges at various levels. Seventh, step up coordination in international and regional affairs.

ASEAN countries share the hope that China will stick to the path of peaceful development and that the Chinese dream and the dreams of other countries are realized. What are your thoughts on this?

The Chinese nation over the past millennia has formed such values as universal love, non-aggression, amity with neighbors, peace as the most precious commodity and harmony without uniformity. China has pursued a foreign policy of developing friendships and partnerships with its neighbors, which has contributed significantly to Asia’s stability and prosperity. In today’s world, economic globalization and regional economic integration are gaining momentum and Asia has become an important engine driving world economic growth. Maintaining stability and development in Asia serves the interests of all Asian countries,
China included.

The Chinese people are striving to realize the Chinese dream of achieving the great renewal of the Chinese nation. Our goal is to complete the building of a moderately prosperous society in all respects by the centennial of the Communist Party of China, and to turn China into a modern socialist country that is prosperous, strong, democratic, culturally advanced and harmonious by the centennial of the People’s Republic of China. To attain this goal, we need a peaceful and stable neighboring environment. For us, pursuing the path of peaceful development is an inexorable choice toward ensuring the fundamental and long-term interests of the Chinese nation.

The national soccer teams of China and Indonesia will compete in the 2015 Asian Cup qualification in Jakarta in mid-October. I hear that you are a soccer fan. What is your forecast for the result of the match?

It is a team sport that calls for good coordination. Important as individual skills are, however, teamwork holds the key to the result of the match. That’s one of the reasons why I like soccer. The charm of the game also lies in its unpredictability, as the situation on the ground may change every minute it lasts. I hope that the national teams of China and Indonesia present an enjoyable, friendly and spectacular match. I also hope the two teams will make it to the World Cup finals in the not-too-distant future.

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