SlashAsia » Indonesia

Investors look to Indonesia as slowdown bottoms out

Alexandra Stevenson — Mon, 01 Jun 2009 00:32:26 +0000

With inflation decreasing and a key interest rate cut expected next week, Asia’s strongest economic performer next to China and India may be a new hot spot for foreign investment, according to the Financial Times. This coming week the central bank is expected to cut the interest rate 25 basis points to seven percent and Indonesian GDP growth, less dependent on exports, is doing well next to neighboring countries like Singapore and Malaysia . Upcoming elections look set to keep President Susilo Bambang Yudhoyono in the leader’s spot, which is seen as a good thing by investors, because of his success with implementing stable economic reform. Some analysts speculate Indonesia’s economic slowdown may be bottoming out, and suggest high returns on investments in mineral and coal sectors.

Indonesia a hot spot for investors, Financial Times

Indonesia’s central bank sees scope for rate cuts, Alibaba News Channel

Guest Post: Indonesia - a must own emerging market, Forex Hound

Indonesia great potential for green energy

enrico — Sun, 19 Apr 2009 20:55:48 +0000

As the world’s largest crude oil producer and fourth biggest rice producer, Indonesia has great potential for green energy. This is according to World Bank’s International Finance Corporation. IFC has helped to set up the Indonesian Sustainable Energy Finance Project, and has offered to help companies through technical expertise and arranging domestic project funding. IFC claims palm oil and rice waste are both greener and cheaper options; the cost of generating electricity through such biomass waste could cost US 5 cents per kilowatt hours, as opposed to state electricity selling price of US 6 cents per KWH.

Palm oil, rice waste potential for generating electricity, Jakarta Post

Indonesian rights groups call election a sham

enrico — Sun, 19 Apr 2009 20:41:02 +0000

President Susilo Bambang Yudhoyono’s Democratic Party begins coalition building after a narrow win, while rights groups claim millions were unable to vote. Two civil rights groups filed law suits against the Election Commission for its failure to give every Indonesian to ability to vote. So, while foreign media focuse on Indonesia’s success as a fledgling democracy, and it’s decline of religious paries (polls results suggest religious parties did worse this year than last), some Indonesian-based analysts question whether the winning party and it’s coalition will be able to bypass growing number of claims of an illegitimate election. What’s more, ordinary Indonesians are questioning the coalition building taking place, where, as the Jakarta Post puts it, “the enemies of one’s enemies are one’s friends.”

Pressure mounts on Indonesia’s election commission over fraud allegations, Channel News Asia
Beware who your friends are, Asia Sentinel
Army generals close ranks, Jakarta Post

Indonesia’s election closes, questions about legitimacy

enrico — Sun, 12 Apr 2009 18:07:28 +0000

Early election results reveal Sunday the Democrat Party has won 20 percent of the vote, which means reelection for President Susilo Bambang Yudhoyono. Results will be confirmed in two weeks. The world’s largest Muslim population has seen strong economic growth and stability under Yudhoyono’s last term. This is the third election since the fall the Suharto dictatorship in 1998 as democracy takes root. But some questions have arisen about the legitimacy of the votes. According to Indonesian media, tens of thousands of citizens have reported campaign violations, and the Election Supervisory Board has reported 400 official reports. More surprising is the clamp down on two whistle blowers, arrested after reporting cash handouts for votes of Yudhoyono’s son. Western media sources like the Economist applaud a new democracy, but sentiment within begs to differ. Tthe Jakarta Post says, “it seems that we may live in a democracy, but one that is dangerously going to be governed like a police state.”

Indonesia’s gentle general eyes second term, Antara
Indonesia ruling part leads poll, BBC
Indonesia, a democracy teetering towards a police state, Jakarta Post

Asia: Markets rally, currencies at 2009 high

Alexandra Stevenson — Mon, 16 Mar 2009 00:01:56 +0000

Asian currencies strengthened this week following an announcement that American banks could stand without government buyout, and optimism about new Chinese and Japanese stimulus packages. Japan’s Nikkei rose 5.15%, South Korea’s Kospi 6.7%, while Singapore’s Strait Times Index rose 5.6%. The Malaysian ringgit increased by 0.3% after the government announced a US $16 billion stimulus plan. The Taiwan dollar rose 0.8%, and the Thai baht 0.4%. Despite a regional rally, the Philippines peso and Vietnam dong were unaffected, and China’s Shanghai Composite actually dropped by 0.2%, after Wen Jiabao expressed concern about the stability of US Treasuries.

The Bank of America Corp., JP Morgan Chase & Co. and Citigroup Inc. announced this week that they do not need government support and may even see profits this year, boosting confidence in the Asia region as well as Europe. While analysts say this is just a temporary respite, things may be looking up in Southeast Asia. Citigroup has indicated it’s confidence that Southeast Asian countries will come out of the crisis soon, announcing plans to start equity brokerage business in Malaysia, Vietnam and Indonesia

Links and sources:

Citigroup to boost Asian equity trade , Gulf Daily News

Nikkei surges 5% as US bank hopes lift Asian markets , CNBC News

Asian stocks lifted , The Straits Times

Asian currencies best of week 2009, led by won, rupiah , Bloomberg

Indonesia: New regulation to protect domestic steel industry

Alexandra Stevenson — Sun, 22 Feb 2009 15:48:24 +0000

In a move stimulate more growth in its domestic steel sector, the Indonesian government has issued a regulation requiring steel manufacturers and importers to register with the Ministry of Industry of Trade. This is part of what could be a larger “Buy Indonesian” trend, after a recent government order required civil servants to buy local-made products. Officials deny the policy is protectionist, but director general of the steel sector at the industry ministry, Ansari Bukhari, has argued that an over-dependence on foreign imported raw materials has caused Indonesia’s steel industry to lag behind. According to reports, local property developers and other consumers said they prefered cheaper and better quality imported steel, a reality that has resulted in imported raw materials being purchased in U.S. dollars and later sold in Indonesian currency, the rupiah.

Imported steel products such as hot-rolled coil and plate, wire rod, cold-rolled coil and coated steel products will now be subject to new regulations.

“Buy Indonesian” policy, Straits Times

Indonesia clamps down on steel import to protect local market, Reuters/Forbes

New trade regulation on steel to protect RI steel, Jakarta Post

Asia: ASEAN countries to demonstrate self-sufficiency and open trade

Alexandra Stevenson — Sun, 22 Feb 2009 15:35:08 +0000

Finance ministers in the Asia region are holding bilateral talks in the lead up the 14th Association of South-east Asian Nations (Asean) summit, in a show of greater strategic cooperation to prevent trade protectionism. Malaysia held bilateral talks with Indonesian and Chinese finance ministers this weekend, to promote trade. Officials from Japan, China and Korea met Saturday afternoon to discuss counter-measures to economic slowdown. Finance chiefs from Asean countries and Japan, China and South Korea will gather at the summit on February 27 in Thailand to discuss concrete and collective response to financial woes.

Asean will speak out against using trade protectionism as a way to cope with the current financial crisis, Thai Prime Minister Abhisit Vejjajiva has said. Mr. Abhisit has encouraged Asean countries to seek aid from other regions, acknowledging that the IMF ” simply does not have the resources, money and time to look into the various problems in different regions.” The Asia Development Bank will participate in the summit as Asean members determine the details of a foreign reserve fund pool agreed upon last May. Contributing countries will discuss management and size of fund.

Links and sources:

Asean to resist protectionism, Straits Times

China, Indonesia and China trade talks, Malaysia Star

Asea foreign reserve pool, Xinhua

Asia: U.S. Secretary of State first trip abroad to Asia

Alexandra Stevenson — Sun, 15 Feb 2009 14:44:07 +0000

Hillary Clinton will travel to Asia on Sunday for her first trip abroad as U.S. Secretary of State, in a diplomatic gesture that shows a shift of priorities in American foreign policy. Speaking at the Asia Society in New York on Friday Clinton announced the Asian region would be a priority for the Obama administration and is “of vital importance” to the U.S. today and in the future. Her first stop will be Tokyo, where local media have claimed, but not verified, Clinton would meet with opposition Democratic Party of Japan leader amidst political tension. Clinton will then travel to Indonesia, South Korea and finally China, where she will push for more engagement and cooperation on economic policies and environmental issues. North Korea will also be a key topic of discussion, as Beijing plays a key role in slowing Pyongyang’s nuclear program.

Links and Sources:

Speech at the Asia Society - State.gov

Japanese papers report Clinton meeting with opposition leader:

Mainichi

Japan Today

Indonesia: Majority of Muslim clerics reject suicide, support democracy: poll

Alexandra Stevenson — Sun, 01 Feb 2009 14:56:29 +0000

Seventy-five percent of 250 senior clerics polled in Jakarta condemn the practice of suicide bombing in jihad or ‘holy war’. The survey, conducted by Jakarta’s Syarif Hidayatullah State Islamic University, also discovered 78 percent of these clerics believe democracy is the best form of government for Indonesia, which has the world’s largest Muslim majority. In addition, only 31 percent supported introducing sharia or Islamic law. Since the fall of dictator Suharto and his 32 year New Order regime the country has seen much volatility and religious extremism.

Source: Antara News Agency http://www.antara.co.id/en

Indonesia: Government to pay subsidies to biofuel manfacturers

Alexandra Stevenson — Sun, 01 Feb 2009 13:17:26 +0000

The Indonesian government has announced plans to promote biofuel as an alternative energy source, saying it will pay subsidies in an effort to boost this new industry. The government also plans to make biofuel mandatory over 2009. Crude oil prices are at a current low, making biofuel products significantly higher. Due to large government subsidies petrol diesel in Indonesia is among the cheapest in Asia, making it hard for palm biofuel and bioethanol to compete.

Source: The Business Times http://www.btimes.com.my