KUR Credit Jumps to Rp6.3 Trillion this April

KUR Credit Jumps to Rp6.3 Trillion this April, People’s Business Credit (KUR), a credit program run by several SOE and regional development banks, will increase its credit from Rp399 billion to Rp6.3 trillion early this month. So far, there are 449,712 debtors.

The ministry has targeted KUR realization by BRI to be Rp10 trillion, Bank Mandiri Rp 3 trillion, BNI Rp2.5 trillion, BTN Rp800 billion, Bank Bukopin Rp350 billion, BSM 600 billion and 13 BPD Rp2.75 trillion.

US$ 700 Million for Guarantee Fund

US$ 700 Million for Guarantee Fund, The ASEAN finance ministers’ meeting last week decided to establish an infrastructure fund managed to support infrastructure funding in the ASEAN region.

The US$ 485.2 million fund came from ASEAN members and the Asian Development Bank. This shows ASEAN’s strength and commitment to solidarity, as well as the consensus to maintain growth, facilitate connectivity and narrow the infrastructure development gap in ASEAN.

The meeting also discussed uniting ASEAN’s financial markets. In the regional bond market, the finance ministers hope to apply the loan guarantee facility and investments worth US$700 million for private companies issuing bonds this coming May 2011.

ASEAN to Establish A Financial Crisis Monitoring Body

ASEAN finance ministers have agreed to establish a new finance and macro economy monitoring body in the region. ASEAN country members, supported by Japan, China and South Korea, have formed the ASEAN Plus Three Macroeconomic Research Office (AMRO).

AMRO is projected to be the first line of defense for member countries against financial crises and a first step in independence from the International Monetary Fund (IMF). “They will operate on May 1st and be based in Singapore,” said the Head of Fiscal Policy at the Finance Ministry, Bambang P.S. Brodjonegoro, during the 15th ASEAN Finance Ministers Meeting in Nusa Dua, Bali, yesterday.

According to Bambang, AMRO is a monitoring body that will watch over the development of international finance, especially in ASEAN region. The organization has been tasked to provide early warning to countries needing additional foreign exchange reserve.

AMRO has collected US$ 120 billion for the initial phase of the funding. In the future, the funds will keep on increasing. AMRO is expected to be the mechanism for maintaining economic stability in South East Asia. “We hope that AMRO will become stronger,” said Bambang. China, Japan and South Korea will take turns leading the organisation.

Oil Production Target will not be Met

The Coordinating Minister for the Economy, Hatta Rajasa, warned that this year oil production might not reach the target of 970.000 barrels per day.

That is why the government will keep on monitoring the performance of the upstream oil and gas regulator, BP Migas. “But we must assume the 970.000 barrels target will not be achieved,” he said.

Hatta said however, the shortage will not be much. “About 1000 to 2000 barrels per day is still fine,” he said.

Kurtubi, director of the Center For Petroleum and Energy Economic Studies, said that the target could be achieved if the government optimized its production in Cepu Bloc, East Java.

Speaking at the DPR, he said he was concerned that after years of exploitation, the Cepu Bloc still underperformed. “There seems to be mismanagement there,” he said.

In the last 10 years, no new oil fields have been discovered, whereas the potential fossil fuels potential in the country amounted to 84.4 billion barrels, comparable to conditions in the Gulf of Mexico and Central Asia. But in reality, only 4 billion barrels found of oil reserves have been discovered.

The problem is reportedly caused by the bad oil and gas sector investment climate. Investors avoid this sector because of legal uncertainty, complicated bureaucracy and corruption.

ASEAN Stock Exchange Integration not Indonesia’s Priority

The Indonesian Stock Exchange (BEI) is still conducting an internal revamping before becoming part of the ASEAN stock market integration. BEI President Director, Ito Warsito, said that some changes needs to be made before entering the ASEAN economic community.

“We still have to improve our system and technology,” said Ito during the ASEAN Finance Minister's Meeting in Nusa Dua, Bali on Thursday (7/8).

BEI is currently focusing on the market system, applying single identity for investors and building warehouse data. “This must be completed before thinking about joining the ASEAN integrated stock exchange,” explained Ito. The warehouse data is predicted to be finished at the end of this year.

Basically, the goal of the integration is to promote ASEAN stock issuers to the global market. Such integration has only been conducted in four countries, Singapore, Malaysia, Thailand and Philippines. But their collaboration is also still in the development stage.

Savings Accounts to be given to 8,000 Jakarta Street Children

The Social Affairs Ministry is planning to give savings accounts to 8000 street children in Jakarta. “We have finished distributing them for 3500 kids this month,” said Social Affairs Minister Salim Segaf Al Jufri after a meeting at the Vice President’s Office onThursday, April 7, 2011.

According to Salim, the government will finish distributing the remaining 4.500 in the next eight months.

As part of the Free Street Children program, the government will distribute saving accounts of Rp1.4 million each to every street child, amounting to around 230.000 persons. The target is no more street kids by 2014. The initial stage of the program will be conducted in Jakarta, where around 8000 street children are found.

Salim said that the savings account will be held by their parents or the boarding homes. He warned that if the parents asked them to return to the street, the government will revoke the account. “The parents will think twice before doing it, because the amount is quite big,” he said.

Rp 16.8 Trillion of State Budget Saved

Presidential instruction No.7/2011 on non-priority budget savings has yielded results. Since it was issued on March 15, the government has succeeded in saving Rp 16.8 trillion of the National Budget.

The government will ask the House of Representatives’ (DPR) approval for the savings plan. “I really hope that the DPR will have share the government’s view in terms of efficiency and optimization,” said President Susilo Bambang Yudhoyono at a limited ministerial meeting at the Presidential office yesterday.

The president said that the money will be allocated for poverty eradication and as reserves to anticipate the rise of energy and global food prices. In the future, the government will also cut a bigger slice of the administration budget to be allocated for capital spending.

Yudhoyono regretted the lack of optimum administration, efficiency and budget management. For example, he was concerned about excess spending for official trips and seminars.

Another extravagance, said the President, was the procurement of officials vehicles. The president said that igf there was no need, there should be no buying. The same applies to office buildings and officials’ housing.

New DPR Building Project Continues

The construction plan for the new House of Representatives’ (DPR) building will go ahead. A consultation meeting between DPR leaders, factions, and the House Internal Affairs Committee (BURT) voted to continue with the Rp1.1 trillion project. “Most factions agreed to it,” DPR deputy chief Anis Matta said yesterday.

The factions that agreed to the plan include the Democratic Party, Golkar, the Indonesian Democratic Party of Struggle (PDI-P), the Prosperous Justice Party (PKS), the National Awakening Party (PKB), the United Development Party (PPP) and Hanura.

Anis said that most factions agreed because the plan referred to a meeting in October 2010. Nevertheless, the DPR will try to minimize costs. “The Public Works Ministry will determine the prices,” he said.

Two factions, the National Mandate Party (PAN) and Gerindra disagreed with the plan.

Gerindra faction’s secretary Edhy Prabowo, said the new building was not an urgent need. “We will gather moral movement to reject it,” he said.

PAN faction’s secretary, Teguh Juwarno, said the consultation meeting did not consider public needs. He also said the DPR did not consider President Susilo Bambang Yudhoyono’s comments, made earlier that day.

Yudhoyono said the construction should be postponed if it did not meet the standards. “It can even be canceled if it really is unnecessary,” he said, when officially closing the meeting.

Tegus said the decision would serve as a lesson that the government should take heed of public sentiment. “This is what we regret,” he said, adding that his faction suggested the decision be voted on at a plenary meeting. Anis said the decision would not be taken to the plenary. “The consultation meeting is enough to decide it,” he said.

Indonesia Corruption Watch expressed disappointment with the DPR’s decision. “That clearly opposed the President’s statement and the people’s aspiration,” said ICW deputy coordinator Emerson Yuntho.

Team Makes Limitation on Social Aid

Home Affairs Minister Gamawan Fauzi will set limitations on the regulation of social aid. The limitation will be set by a team, in collaboration with the Corruption Eradication Commission (KPK).

The team was formed following the KPK’s statement that corruption often accompanies financial aid. The team consists of the regional finance directorate general and the home affairs inspector general.

The team was formed after an alleged corruption case was revealed during a meeting between the KPK, the Home Affairs Ministry, and governors. The money was sent to a political party or politicians in the provinces. Yet, a fund for political parties had not been set.

Gamawan would not say more about the misuse of the budget. The KPK’s study showed that the corruption occurred because there was no clear regulation from the home affairs minister. Therefore, the regional government did not have a guideline to manage the social aid fund. “The governors want to be able to manage it,” he added.

Over the past three years, the government has allocated Rp300.94 trillion, consisting of Rp48.46 trillion for the provinces and Rp252.48 trillion for the central government. “Because of the proof that we found, corruption clearly occurs with the distribution of social aid,” said KPK deputy chief, M. Jasin, in a meeting with the home affairs minister and the youth and sports minister, as well as regional heads at the KPK building on April 5.

Indonesian Air Force Projects 10 Fighting Squadrons

The Indonesian Air Force is projecting to improve its military force by 2025, but the plan is hampered by budget issues. Although it has tried to improve the budget, the increase has not been significant.

Indonesian Air Force expert staffer Marshall Parulian Simamora, said the target was to have 10 fighting squadrons, 7 carrier squadrons, 1 VIP/VVIP squadron, 3 strategic spy squadrons, 6 helicopter squadrons, 4 training squadrons, 1 tanker squadron, and 1 PTTA squadron and military equipment by 2025.

In 2011, the Indonesian Armed Forces was given a Rp44 billion budget, while the Air Force was given Rp7.4 trillion, Rp4.2 trillion of which was used to improve existing military equipment.

Which such budget, the military hopes the national industry can maximize the development of the military and defense equipment industry. Indonesian Air Force chief of staff Marshall Imam Sufaat said a strong local defense industry could reduce dependency on foreign aid.

Imam said the local industry he referred to was not only the plane, rocket, satellite and air balloon manufacturing industry, but also the aviation system industry or airplane component industry. Besides the industry sector, air defense must also be supported by the aviation service, such as air transportation, telecommunication services, flight safety, and maintenance.

PT Dirgantara Indonesia’s Aerostructure director Andi Alisjahbana, said the need for fighting and defense equipment did not always rely on foreign producers. Maintenance and repairs are needed to generate the component industry.

Dirgantara has developed a specific helicopter for the past two years. This year, PT Dirgantara plans to send four helicopters to South Korea. The four helicopters, valued at US$100 million, were ordered by the Korean Coast Guard.

Immigration Law Ratified

Immigration Law Ratified - The House of Representatives (DPR) has ratified the revised Law no. 9/1992 on Immigration. All factions at the DPR agreed to ratify the law in a plenary meeting led by Deputy House Speaker Priyo Budi Santoso yesterday.

“In principle, once it is ratified by the DPR, it will be ratified by the President within 30 days and the law will immediately become effective,” said Justice and Human Rights Minister Patrialis Akbar after the meeting.

However, Patrialis said the regulation on the Immigration Director General’s autonomy, the use of the immigration management system to facilitate services, bureaucracy, supervision and visa regulation, remained unclear.

Permanent stay permits will be granted for an unlimited time period, but the applicant must report to the Immigration Office every five years. The application for the permit will be free of charge.

The Immigration Law also regulates investigation. Civil servant investigators at the Immigration Office will be authorized to investigate immigration crimes and immigration or other officials who abuse their authority and fail to carry out their duty according to procedure.