*IBRAHIM ISAS – SELECTED NEWS AND VIEWS *
*FOCUS: SBY AND THE INDONESIAN ECKONOMY TODAY*
*---------------------------------------------*
*--- Cluttered development concepts*
*--- SBY lists 5 obstacles in development programs*
*--- More tax, the greater the development . . .Yudhoyono*
*--- SBY holds to speed development in three provinces*
*--- RI tough conditions for resending workers to Malaysia*
*--- Analysis: BBM price hike is cheap political fuel *
*----------------------------------------------------------*
CLUTTERED DEVELOPMENT CONCEPTS
The Jakarta Post Editorial:
President Susilo Bambang Yudhoyono last week expressed his frustration
over the failure, and, sometimes even the refusal of regional leaders
and lower-ranking officials to implement decisions or programs adopted
at his Cabinet meetings.
The problems, we think, can be blamed partly on the excesses of regional
autonomy, bureaucratic incompetence, negative inertia and Yudhoyono
himself, who has been notorious for his weak leadership.
But the President also is well-advised to reflect on whether the
development programs decided on by his Cabinet could be easily
understood by regional administrations.
For example, many may have been confused by development concept jargons
so often propagated by the government these days.
Try to digest these: Economic corridors, integrated economic development
zones, special economic zones, free trade zones and industry clusters.
During the national working conference with his ministers and regional
leaders in Bogor on Tuesday the President launched economic corridor
programs which will develop industry clusters and business centers to
support local economies along the coastlines of Java, Sumatra,
Kalimantan, Sulawesi and Papua.
The corridors, he said, would serve as development highways to connect
new growth centers on the five major islands.
One day later, on Wednesday Investment Coordinating Board chief Gita
Wirjawan talked about another issue. He told a hearing with the House of
Representatives that of the 14 integrated economic development zones
launched on the five major islands in 2005, only three had been realized
and able to attract private investors.
The other 11 have remained undeveloped and unable to attract private
investments due to acute lack of infrastructure, licensing red tape,
inadequate fiscal incentives and overlapping authorities.
As part of the action programs during the first 100 days of YudhoyonoÂ's
second-term, Coordinating Minister for the Economy Hatta Rajasa and
several other economic ministers launched the development of clusters of
resource-based industries in several provinces in January 2010.
In February last year, Hatta promoted another concept of special
economic zones (SEZs) for development of three agriculture-based SEZs.
Two SEZs in Medan (North Sumatra) and Dumai (Riau) would focus on palm
oil-based industries while the third in Merauke (Papua) would focus on
food crops, notably rice.
We find it difficult to understand why the government uses so many
seemingly different and confusing concepts when what it really means is
simply the development of SEZs based on the SEZ law enacted in September
2009.
SEZs essentially call for the development of special regions with
streamlined procedures for business licensing and the hiring of
expatriates, flexible labor regulations, tax breaks, customs duty
exemptions and good infrastructure to woo investors in export-oriented
industries.
In essence, the economic corridors, integrated economic development
zones, industry clusters, free trade zones and export-processing zones
are actually almost identical to the SEZ development concept that has
been successfully implemented in China, India, Malaysia and Vietnam.
Natural resource-based industry clusters can generate localized
economies arising from specialization and integration of manufacturing
operations, reduce transportation costs and significantly improve supply
chain management.
SEZs are also capable of enhancing development of economic corridors,
which in turn will help form development highways through economic
linkages between one SEZ to another.
But then, at the end of the day, whatever the name of the concept may
be, nothing will happen without adequate infrastructure.
*SBY LISTS 5 OBSTACLES IN DEVELOPMENT PROGRESS
*
The Jakarta Post
President Susilo Bambang Yudhoyono in a working meeting Monday listed
five factors hindering the countryÂ's development.
The first is the bureaucracy lag, especially in the central government,
in implementing plans that have been agreed upon.
Â"We make a decision in the Cabinet session. The respective minister
understands it, but [the execution] in the ministry is delayed, they say
it needs to undergo more talksÂ…Â" Yudhoyono said Monday as quoted by
antara.com.
The second hindering factor is regional governments having their own
interests, which become obstacles in carrying out agreed development plans.
The third is investors failing to fulfill their promises, thus halting
development programs.
Â"The fourth [factor] is when one knows that a regulation is hindering
[the process], and that it can be improved, and yet it is not. The fifth
is an unhealthy political process at central and regional [levels]. Let
us think clearly,Â" Yudhoyono said.
He added that Indonesians needed to know why a plan was not carried out.
Â"In the era of democracy and transparency, once a master plan is agreed
upon, do admit if there is an obstacle. The people need to know who is
hindering it, who is irresponsible and who is failing to keep promises,
and finally, who caused the failure. LetÂ's find solutions,Â" Yudhoyono
said. — JP
THE MORE TAX, THE GREATER THE DEVELOPMENT, SBY
Rangga D. Fadillah, The Jakarta Post, Jakarta | Tue, 03/20/2012
President Susilo Bambang Yudhoyono and other top officials submitted
their annual tax forms (SPT) in drop boxes provided at the Finance
Ministry in Jakarta on Monday.
Together with Yudhoyono, PeopleÂ's Consultative Assembly (MPR) chairman
Taufik Kiemas, Finance Minister Agus Martowardojo, Bank Indonesia
Governor Darmin Nasution and Constitutional Court chairman Mahfud M.D.
also dropped off their forms, followed by all ministers in the second
United Indonesia Cabinet.
Â"Paying taxes is very important for the country. The government has the
duty to develop the country and provide welfare for the people. To do
that, we need a lot of money and the highest revenue for the government
comes from the taxation sector,Â" Yudhoyono said.
Â"The more discipline the people have in paying their taxes, the more
development and welfare we can provide,Â" he said.
Lastly, Yudhoyono requested that all tax officers provide the best
services to tax payers and avoid any misconduct that might lead to legal
problems like corruption.
Â"Tax officers must do their jobs within legal procedures. There must be
no illicit practices or corruption,Â" he said.
Agus said in a speech that the Tax Directorate had made strides in
bureaucratic reform over the past several years.
Â"That achievement is reflected through a public survey conducted by the
Corruption Eradication Commission [KPK]. We got 7.65 out of 10, above
the minimum standard set by the commission of 6,Â" he said.
Last year, the office also received a good mark, 3.79 out of 4, in the
tax payersÂ' satisfaction survey conducted by the Bogor Agricultural
Institute (IPB).
Agus said the Tax Directorate was committed to increasing the stateÂ's
revenue from taxes. In 2011, the government received Rp 872.6 trillion
(US$95.11 billion) in taxes, or 99.3 percent of the governmentÂ's target.
This year, the directorate is aiming to boost its collected taxes to Rp
1,032 trillion, or 78 percent of the nationÂ's total revenues.
Agus claimed that the tax office was committed to increasing tax
revenue. In 2011, total tax revenue reached Rp 872.6 trillion, or 99.3
percent of the target set by the government.
To secure this yearÂ's tax revenues, the tax office has launched several
strategic programs, including the National Tax Survey (SPN), exploring
potential revenues from certain sectors, improving administration for
businesspeople and educating small- and medium-size enterprises.
Â"The coming of the President and other top officials today to submit
their tax forms is a show of the state institutionsÂ' obedience to their
tax obligations. I hope this can set a good example for all citizens,Â"
Agus said.
To make the form submission easier and simpler, the tax office has
provided drop boxes in strategic locations across the country and
utilized post offices to facilitate the submission. The office has also
introduced electronic filing, which can be done on the officeÂ's
official website.
He said he agreed with Yudhoyono that tax officers should operate within
the law to ensure the public did not doubt the success of bureaucratic
reform at the tax office.
SBY HOLDS MEETING TO SPEED DEVELOPMENT IN THREEE PROVINCES
Nani Afrida, The Jakarta Post,
President Susilo Bambang Yudhoyono held a meeting Thursday to accelerate
development in three provinces; Papua, West Papua and Sulawesi Tenggara.
Vice President Boediono and ministers from the Indonesian United Cabinet
(KIB) II attended the meeting to hear presentations from the three
governors.
"We must direct more attention to provinces that require more resources
and budget to speed development," Yudhoyono said before the meeting.
Yudhoyono said successful development in the province was not only about
development itself, but about management, collaboration, and concepts
and synergy, between the central and local government.
"This is what we will do in the future," he said.
Yudhoyono added that over the past two years the government had
allocated a huge budget amount to Papua, for example.
In 2009, Papua received Rp 16 trillion (US$1.76 billion), and Rp 19.8
trillion in 2010.
This year, Yudhoyono said, the government had allocated Rp 20 trillion
to Papua.
"I just want to show that the budget amount allocated to the province
has increased significantly," he said, adding that the government would
make sure the development in the province would be a success.
*
RI APPLIES TOUGH CONDITIONS FOR RESENDING WORKERS TO MALAYSIA
*
Ridwan Max Sijabat, The Jakarta Post, Jakarta | Tue, 03/20/2012
Indonesia will resume sending its migrant workers to Malaysia in April
if both countries agree on standards of competence and monthly payments.
Â"We will resume the labor supply after we receive assurances from
Malaysia on several crucial issues, such as monthly payments, cost
structures and standards of competence. Both sides will have to monitor
one another to ensure the protection of migrant workers,Â" Manpower and
Transmigration Minister Muhaimin Iskandar said in Jakarta on Friday.
Indonesia announced a moratorium on June 26, 2009, following an
increasing number of abuses against its workers in the neighboring country.
A joint task force from both countries met on Thursday and agreed on a
200-hour competence training program as required by Malaysia, and a
demand by Indonesia to set the monthly minimum wage between 600 and 800
Malaysian ringgit (US$197 and $262), a significant increase from the
rate of 400 ringgit prior to the suspension.
The Malaysian delegation, led by Dato Sheikh Yahya Mohamed, demanded all
workers undergo a 200-hour training program prior to starting their
contracts in four core jobs: housemaids, cooks, babysitters and carers
for the elderly.
The Indonesian Manpower and Transmigration MinistryÂ's director general
for overseas labor placement, Reyna Usman, said Indonesian workers would
enjoy one day off every week and a maximum of 12 working hours per day.
They would also earn 108 ringgit per dayÂ's overtime if they worked on
their day off, she added.
Indonesia lifted the moratorium on labor to Malaysia in November 2011,
after both governments signed a new labor agreement on Indonesian
workersÂ' rights in Malaysia.
However, Malaysian newspaper The Star reported on Sunday that the Â"one
maid, one taskÂ" ruling had caused an uproar in Malaysia, with the
associations for both agents and employers now wanting to know whether
the Malaysian officials had agreed to it, and if so, why.
Â"Reyna made the announcement and the meeting then moved on to other
matters,Â" The Star quoted an Indonesian participant, who asked not to
be identified.
The Association of Foreign Maid AgenciesÂ' (Papa) acting president,
Jeffrey Foo, said Malaysian officials should explain what transpired at
the meeting. Â"If our officials agreed to it, they should explain it
to us.Â"
Malaysian Maid EmployersÂ' Association (Mama) president Engku Ahmad
Fauzi Engku Muhsein concurred, saying: Â"There are many doubts that need
to be cleared up. We want to know what really happened at the meeting.Â"
Malaysian Prime Minister Datuk Seri Najib Tun Razak expressed his
surprise over the new conditions for sending maids to Malaysia.
Najib said, as quoted by The Star, that what was announced by
IndonesiaÂ's Labor Placement Development director-general Dr. Reyna
Usman, was Â"not reasonable at allÂ".
Â"We hope on their side, they will revert to the agreement reached
between myself and the Indonesian President, Susilo Bambang Yudhoyono
[on this issue],Â" he said.
Late last week, Malaysian Human Resources Minister S. Subramaniam said
IndonesiaÂ's latest statement was not in line with the understanding
reached by the two nations.
Commenting on a report from Jakarta, which said that maids would only
perform one type of work, Subramaniam said that representatives from
both countries would meet in Jakarta to resolve the matter.
Analysis: BBM PRICE HIKE IS CHEAP POLITICAL FUEL
Debnath Guharoy, Roy Morgan | Tue, 03/20/2012
Perhaps more than anything else, it is the price of fuel that influences
the cost of almost everything, touching the lives of just about
everybody in the country. Ever since the decision was floated as a trial
balloon in February, the rumor mill has been working overtime. WeÂ've
heard just about everything. Dark plots of a military coup right through
to large-scale rioting that will set the country ablaze are among the
stories that have done the rounds. The Blackberry Messenger, or BBM as
it is popularly known, has been one of the instruments to engage in the
ongoing and all-embracing debate on the other BBM, also the acronym for
Bahan Bakar Minyak.
The impact on the KADIN-Roy Morgan Consumer Confidence index was
immediate and punishing. The rating shed over 10 points in a single
month, bringing back memories of a similar plunge the last time a raise
was introduced. Commenting on the February results, Suryo Sulisto,
chairman of KADIN, said, Â"This had to happen, it was inevitable. This
is a good time for the fuel price hike to be introduced. Consumer
confidence has been riding sky-high for a very long time, despite the
gloom worldwide. It was time to burst the bubble. The increase will
bring fuel prices closer to realistic levels. The subsidies have been
too much for too long. Hopefully, some much-needed attention will
finally be paid to the development of infrastructure and essential
services.Â"
The Bank Indonesia monthly rating also dived, shedding six points. No
surprise. But the difference between the two ratings made one noticeable
difference crystal clear. The prospect of the hike is being received
with even greater trepidation outside of the selected cities surveyed by
the central bank each month. A look at the details will reveal the
extent of the shock. Consumer confidence is down 10.2 points in
February, the lowest since September 2010, when it stood at 132.3. Now
it is two points lower than the 138.8 registered exactly a year ago in
February of 2011.
The monthÂ's big fall was driven by decreasing confidence across all
components of the survey. In terms of personal finances 37 percent, down
four points, say their family is Â'better offÂ' financially than a year
ago. This continues to compare favorably with the 18 percent, up six
points, who say their family is Â'worse offÂ' financially than a year
ago. But the good news is that 54 percent of Indonesians still expect
their family to be Â'better offÂ' financially this time next year.
Remaining in the majority, the drop from the high of January was a mere
five percentage points. I say a mere five points because the drop is
relatively small in comparison with the overall crash of the index by 10
points. Similarly, the number of people who expect to be Â'worse offÂ'
financially went up to just seven percent, up by only four points. Under
the circumstances, these drops arenÂ't as severe as I would have expected.
In terms of the economy, 74 percent of Indonesians continue to believe
that the nation will enjoy Â'good timesÂ' financially during the next
twelve months. In contrast, 26 percent, up six, say weÂ'll have Â'bad
timesÂ' financially. An overwhelming majority of 82 percent, down five,
remain convinced that Indonesia will have Â'good timesÂ' economically
over the next five years. The people who expect Â'bad timesÂ'
economically went up by five points, to a relatively small 17 percent of
the population.
A slight majority of Indonesians, 51 percent down five, continue to
say Â'now is a good time to buyÂ' major household items. This is now
closer to the 46 percent, up six points, who believe Â'now is a bad
time to buyÂ' something like a refrigerator or TV set. Remarkably
robust, under the circumstances.
To put this all in perspective, itÂ's an appropriate time to make a
comparison with our wealthy neighbours down under. IndonesiaÂ's score of
136.8 in these troubled times, is still higher than AustraliaÂ's
best-ever of 133.2 in January 2005. These are the ratings from the same
questions being asked for 40 years in Australia and seven in Indonesia,
by the same institution in both countries, Roy Morgan Research. Even if
we were to accept the usual stereo-typing of Â'optimistic
IndonesiansÂ' and Â'realistic AustraliansÂ', the confidence in both
today and tomorrow expressed across the archipelago augurs well.
The prognosis is visible in the recent pages of IndonesiaÂ's
eco-political history. I expect confidence levels to drop some more in
March and April. IÂ'm not a fortune-teller but if the past is anything
to go by, expect a plateau by June and the climb back upwards again,
commencing July.
Is this why a beguilingly confident President Yudhoyono is off to China
this week, ahead of the much-touted demonstrations starting today?
Strange timing. And how much of the savings in subsidies will go to the
common good and how much to the countryÂ's Gayuses and Nazaruddins? Two
questions I thought that were worth asking. Go figure.
The monthly rating is based on 2,106 face-to-face interviews conducted
throughout Indonesia, not just a handful of cities. Men and women aged
14 and over were randomly selected during the month of February 2012.
/The writer can be contacted at/ debnath.guharoy@roymorgan.com
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